15 June 2007
Critics contend that even with the upcoming review of 60 mining contracts signed during the war and by the interim government, the Congolese stand to benefit little.
The head of the IMF's Africa Division, Cyrille Briançon, told Reuters that the Democratic Republic of Congo (DRC) would soon reap the benefit of increased private sector investment in the country's mineral sector. Briançon noted that mining investment has surged since Congo's civil war ended in 2003, especially in copper and cobalt extraction, and that many new and rehabilitated mines will begin production by next year.
It remains to be seen, however, who will actually benefit from the revenue earned from the country's lucrative mineral resources. Efforts by the World Bank to generate tax revenues for local and provincial governments through provisions in the new Mining Code have so far produced few results. While 40% of tax revenues earned from mining are supposed to be distributed back to producing region, government and civil society observers readily admit that little or no money leaves Kinshasa for the provinces. Critics have also argued that the tax rates set under the code are unduly favorable to mining companies, but the Mining Code, which was adopted in 2002 with World Bank support, is locked into law and cannot be revised for at least 10 years.
Persistent corruption in the country further dampens the prospect of widespread benefits from the mining industry. Transparency International ranks DRC as one of the world's most corrupt countries. To date, Congo's mineral wealth has brought little but misery to most Congolese; in the last decade, the struggle for control of mineral resources perpetuated and intensified the country's civil war in which 4 million people were killed.
The IMF's comments about the benefits of mining investments coincide with an announcement by the Congolese government that 60 mining contracts signed during the war and by the interim government will be subjected to review. The Financial Times reports that the government finally agreed to conduct the review after considerable pressure from civil society and donors, establishing an interministerial commission charged with “revisiting” the contracts over a period of three months. Although the announcement has been praised and raised hopes about increased transparency in Congo’s mining sector, most observers don't expect to see any substantial changes in the terms of the deals, nor any outright cancellations of contracts. Many consider the bulk of the mining concessions granted during the past decade to be manifestly unfair, particularly as deals were negotiated without any transparency or competition.
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