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DRC: Glencore has been forced to cancel a « fictional » defense debt from KCC

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Glencore's CEO

[FLASH-BACK] – Glencore was forced by Gécamines to cancel a « fictional debt » defense of Kamoto Copper Company (KCC). Thus, the cancellation of 1.4 billion US dollars will not have been at all a gift to the Congolese government. It intervened following the signing of the transactional agreement on June 12, 2018. The latter put an end to the dispute between the two partners, namely: Gécamines (owner of 25% of the shares) and Katanga Mining, a subsidiary of Glencore in the DRC (owner of the 75% stake) in this joint venture.

The fact that Glencore’s CEO, Ivan Glasenberg, equates the cancellation of this « fictitious » debt with a « gift » to the Congolese state obscures a page of history and discredits the national executive. the DRC. Voices rise to denounce a real position of defense of this manager vis-à-vis its partners in the General Assembly.

If not, analyze some, he should show evidence that this money would have been used for the corruption of the Congolese authorities. At this sulphurous statement, Glencore, for its part, said that its activities were strictly above all advice and that it had taken measures to strengthen its corporate governance.

« The company claims that the cancellation of the debt by Katanga Mining was not a bribe. It was a debt reduction; no individual took advantage of it, it was transparent. And in all transparency, it has been approved by our listeners, « said a spokesman for Glencore.

Back to the origin of the cancellation
In fact, the over-indebtedness and the non-reconstitution of the capital of the joint venture were the two reasons for a deaf dialogue that had taken place between the two partners. This led Gecamines to solicit from the Commercial Court of Kolwezi, dated April 20, 2018, the dissolution of KCC.

Katanga Mining, a subsidiary of Glencore in the DRC, was criticized by Gécamines for having, through a series of intragroup financial and commercial agreements, implemented a policy that resulted in the cash and wealth being extracted for its sole profit. from KCC. And this, for more than ten years.

« Based solely on the last four fiscal years, the financial debt has increased from USD 3,233,736,880 to USD 4,572,497,908 and the commercial debt from USD 1,967,255,847 to USD 4,473,525,056. At the end of 2017, the company was indebted to the Glencore Group for 9 billion USD, all bearing annual interest rates of up to 14%, far from the conditions that the parent company borrows, and then lend to the joint venture. It is thus several hundreds of millions of dollars of interest which are each year due by KCC to the group of majority shareholders « , revealed the Gécamines in an official update.

READ (ALSO): Did Glencore really roll Gécamines?

Despite being surprised to see its minority partner launch legal proceedings unilaterally, the Glencore subsidiary considered this negative equity situation as an accounting problem that resulted from KCC’s historical losses following the rehabilitation of the old infrastructure that it had inherited. at the time of the acquisition of the Kolwezi mining complex.

« KCC and its shareholders in Katanga have made numerous attempts to engage in constructive negotiations with Gécamines to remedy this situation and will continue to attempt to engage in these negotiations. KCC and its shareholders in Katanga Mining will take all necessary measures to remedy this situation and ensure the consolidation and continuation of its operations, « said KCC in an official statement.

RE (READ OUT): settled KCC litigation, Gécamines and Katanga mining sign an agreement!

The adjournment of the 8 May 2018 hearing at the Kolwezi Commercial Court paved the way for an amicable settlement process that will end one month later, on June 12, 2018, with the signing of ‘an agreement at the end of which, Glencore has agreed the cancellation of its debt that Gécamines considered « fictitious ».

As a reminder, Gécamines is engaged in a process of legal and economic rebalancing of its partnerships with mining investors. Objective: to allow its Jointe Ventures to produce wealth not only for itself, but also for the state.

Eric TSHIKUMA

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DRC: the « education » project will be submitted to the WB Board of Directors in February 2020

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DRC: Education project to be submitted to World Bank Board in February 2020

The Government’s emergency project on free « Basic Education » will be submitted to the World Bank’s Executive Board in February 2020. According to the Vice President for Africa, Hafez Ghanem, preparations are being intensified to ensure that this deadline is met.

« We are working very quickly on this education project. And we plan to bring this project to our Council as early as February. Regarding the height of the amount, we are in the process of making evaluations. It’s going to be a big amount, around a billion US dollars, » he told reporters at the end of his meeting with the Congolese delegation led by Finance Minister José Sele Yalaghuli.

Indeed, this emergency project is part of World Bank support for the Government’s efforts to provide free basic education, the implementation of which began last September.

To relieve the pressure on public finances to allocate at least US$25-37 million each month, the World Bank has pledged to support the Congolese Government in this regard.

https://twitter.com/Zoom_eco/status/1184909044315758593?s=20In line with the commitment of the Head of State, Felix Antoine Tshisekedi, and the President of the World Bank, David Malpass, the Minister of Finance, José Sele Yalaghuli, has clearly indicated the Congolese Government’s firm desire to see the process speed up so that funds are released within an acceptable time frame.

« This is the right time for the partners of DR Congo to match the real political will of the Congolese national executive to meet one of the aspects of the World Bank’s mandate, namely: the fight against poverty, » he said at a previous meeting with the World Bank delegation led by Jean-Christophe Carret.

With regard to the health coverage programme, Hafez Ghanem reiterated his institution’s commitment to continue working alongside the Democratic Republic of Congo, particularly in the fight against Ebola.

 

He added: « We will also work with the Government on a new health programme to strengthen basic health centres and improve access to health across the country. »

However, he gave no indication of the amount of funding for this health programme, especially since it is currently under study.

As a reminder, the delegations of DR Congo and the World Bank held a working meeting on Thursday 17 October 2019 in Washington DC. Experts from both sides, led by José Sele Yalaghuli and Hafez Ghanem respectively, reviewed ongoing projects within the World Bank portfolio and those under preparation.

In addition to education and health, projects related to infrastructure, connectivity (roads) and the digital economy were also discussed.

Eric TSHIKUMA, from Washington

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DRC: the three axes of the Accelerated Programme to Combat Poverty and Inequality

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DRC: the three axes of the Accelerated Programme to Combat Poverty and Inequality

The President of the Republic launched his Accelerated Programme to Combat Poverty and Inequality in Kinshasa on Wednesday 16 October at the site of my valley in the commune of Mongafula.

This Programme aims to ensure that twenty million Congolese living in rural and peri-urban areas in the 145 territories of our country leave poverty or extreme poverty within the next 5 years.

It has three components: improving rural and peri-urban populations’ access to basic socio-economic infrastructure and services; promoting rural and peri-urban economies; and building capacity in managing for development results at the national, provincial and local levels.

The first component aims to increase the population’s access to basic services such as housing, electricity through the promotion of micro hydroelectric power plants, drinking water, health and agricultural access roads. This list is not exhaustive.

The second component aims to ensure that people in villages and peri-urban neighbourhoods have improved and stable sources of income and that they consume at least one balanced meal per day. This component will place particular emphasis on promoting inclusive agricultural sectors.

The third component aims to develop a culture of autonomy, which will result in the appropriation of development by the beneficiary populations, the strengthening of self-esteem, meritocracy and a motivated attachment to their living environment.

Substantial resources for this ambitious program!

« The Programme, the main components of which I have just unveiled, requires ambitious funding over several years, » said Félix Tshisekedi, aware of these challenges. In the face of such an ambition, the Head of State asks the Government to spare no effort to explore all possible avenues likely to provide the means for this saving action for the people.

It is with this in mind that the last Council of Ministers adopted the hypothesis of a budget reaching the 10 billion mark.

In addition, Félix Tshisekedi intends to engage the country in far-reaching reforms ranging from the rebuilding of the state with justice as the epicentre to the sectors of national life.

This is how he makes his main focus the fight against anti-values, particularly corruption, embezzlement of public funds, tax fraud, smuggling and tribalism. And all means will be used to ensure that all State revenues are channelled into the Public Treasury.

Finally, to make this programme a success, the President of the Republic is counting on the involvement of all his compatriots, beyond the divisions.
political.

Harris Kasongo

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DRC: Economic and financial situation at the heart of a meeting at the World Bank

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DRC: Economic and financial situation at the heart of a meeting at the World Bank

The economic situation in DR Congo is the focus of a meeting on Thursday 17 October 2019 at the World Bank’s headquarters in Washington DC. The Minister of Finance, José Sele Yalaghuli, leads the delegation of Congolese experts.

In his presentation, the national silversmith described a macroeconomic framework for DR Congo that has remained stable.

Despite accumulated deficits of 420 billion Congolese francs at the end of September 2019, domestic prices and the exchange rate fluctuated slightly. And at this rate, the Government reports inflation of 4.2% at the end of December 2019, which is below the 7% end of period forecast level.

Referring to the strategic and political orientations of the Government of the Democratic Republic of Congo, Minister Sele Yalaghuli cited in particular the tightening of public spending in order to limit deficits and the subscription of treasury bonds with the ambition of mobilizing 150 billion CDF by the end of 2019 to fill the gaps.

The first results are promising, especially since a small monthly budget surplus was recorded at the end of September 2019.

Moreover, added Sele Yalaghuli, the third orientation concerns the Government’s firm commitment to pursue the implementation of reforms with the support of partners to remove obstacles sector by sector and to be able to remedy them.

With regard to cooperation between the Congo DR and the Bretton Woods institutions. After the break-up of the formal programme with the IMF in 2012, the ongoing recovery strategy of the current discussions is based on two options.

First, the interim program. Then, the formal program. If the first one will cover the preparation period of the second one, the conclusion of the formal programme could take place after the third quarter of 2020.

« This is the right time for the partners of DR Congo to match the real political will of the Congolese national executive to meet one of the aspects of the World Bank’s mandate, namely: the fight against poverty, » José Sele Yalaghuli said, addressing the World Bank delegation led by Jean-Christophe Carret.

With the World Bank, experts from DR Congo are working on preparations and options to initiate disbursement of funds for the Government’s priority sectors on are: basic education and universal health coverage.

This interaction with World Bank teams continued, with Hafez Ghanem, Vice President in charge of the Africa region, as the focus.

Eric TSHIKUMA, from Washington DC

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