Committee for the Abolition of Illegitimate Debt

In a March 2017 press release the IMF IMF
International Monetary Fund Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org said the Congo’s government debt Government debt The total outstanding debt of the State, local authorities, publicly owned companies and organs of social security. was 77% of GDP GDP
Gross Domestic Product Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another. , though the institution’s actual review from the time has not been released. However, in September the IMF said there were hidden debts, and in October it reported that the debt is actually 110% of GDP ($9.1 billion). However, not enough information has been released by the IMF to know how much this increase in debt is due to falling GDP, more loans, or previously undisclosed debt.

Congo has been drastically hit by oil price falls, with government revenue falling from $6.3 billion in 2013 to $2.5 billion in 2016. Some of the debt is thought to be owed to commodity trading Market activities
trading Buying and selling of financial instruments such as shares, futures, derivatives, options, and warrants conducted in the hope of making a short-term profit. companies, who lent money to the government guaranteed by future oil revenues. Therefore, if Congo defaults on these debts, the companies will be able to claim this oil money, further decimating the government’s revenue.

In October 2017, Congo said it required a debt restructuring, though depending on how payments have been guaranteed by oil, it may be difficult to get some creditors to negotiate if they feel confident of being able to claim the oil anyway. Of the Congo’s $9 billion debt, only $478 million is owed as bonds, and these do not have a huge repayment burden as interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. is 2.5% ($12 million) and the bonds do not mature until 2029.

Congo qualified for debt relief through the Heavily Indebted Poor Countries Heavily Indebted Poor Countries
HIPC In 1996 the IMF and the World Bank launched an initiative aimed at reducing the debt burden for some 41 heavily indebted poor countries (HIPC), whose total debts amount to about 10% of the Third World Debt. The list includes 33 countries in Sub-Saharan Africa.

The idea at the back of the initiative is as follows: a country on the HIPC list can start an SAP programme of twice three years. At the end of the first stage (first three years) IMF experts assess the ’sustainability’ of the country’s debt (from medium term projections of the country’s balance of payments and of the net present value (NPV) of debt to exports ratio.
If the country’s debt is considered “unsustainable”, it is eligible for a second stage of reforms at the end of which its debt is made ’sustainable’ (that it it is given the financial means necessary to pay back the amounts due). Three years after the beginning of the initiative, only four countries had been deemed eligible for a very slight debt relief (Uganda, Bolivia, Burkina Faso, and Mozambique). Confronted with such poor results and with the Jubilee 2000 campaign (which brought in a petition with over 17 million signatures to the G7 meeting in Cologne in June 1999), the G7 (group of 7 most industrialised countries) and international financial institutions launched an enhanced initiative: “sustainability” criteria have been revised (for instance the value of the debt must only amount to 150% of export revenues instead of 200-250% as was the case before), the second stage in the reforms is not fixed any more: an assiduous pupil can anticipate and be granted debt relief earlier, and thirdly some interim relief can be granted after the first three years of reform.

Simultaneously the IMF and the World Bank change their vocabulary : their loans, which so far had been called, “enhanced structural adjustment facilities” (ESAF), are now called “Growth and Poverty Reduction Facilities” (GPRF) while “Structural Adjustment Policies” are now called “Poverty Reduction Strategy Paper”. This paper is drafted by the country requesting assistance with the help of the IMF and the World Bank and the participation of representatives from the civil society.
This enhanced initiative has been largely publicised: the international media announced a 90%, even a 100% cancellation after the Euro-African summit in Cairo (April 2000). Yet on closer examination the HIPC initiative turns out to be yet another delusive manoeuvre which suggests but in no way implements a cancellation of the debt.

List of the 42 Heavily Indebted Poor Countries: Angola, Benin, Bolivia, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Comoro Islands, Congo, Ivory Coast, Democratic Republic of Congo, Ethiopia, Gambia, Ghana, Guinea, Guinea-Bissau, Guyana, Honduras, Kenya, Laos, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Myanmar, Nicaragua, Niger, Rwanda, Sao Tome and Principe, Senegal, Sierra Leone, Somalia, Sudan, Tanzania, Togo, Uganda, Vietnam, Zambia. initiative in 2010. However, the government is still being sued in France by Congo-based construction company Commisimpex for $1 billion on debts dating back to before 1992. This debt claim is not included in the IMF’s $9.1 billion figure.

Chad similarly has debts guaranteed by oil, from loans from commodity trader Glencore, first given in 2013. In 2015, the debts were restructured to extend their maturity over 6 years rather than 4, but in such a way that the total payments over the 6 years (and net present value of the debt) actually increased.

Chad has gone into arrears on some of its payments to multilateral and bilateral creditors. In June 2017 the IMF agreed a $312 million loan programme with Chad over 3 years. This requires the external debt to commercial creditors, primarily Glencore, to be restructured, though the IMF has not indicated by how much.

Without any debt restructuring Chad’s external government debt payments are expected to average 36.7% of government revenue between 2017 and 2020. Chad is currently assessed as in debt distress by the IMF. For Chad to move to at moderate risk of debt distress would require debt payments to fall below 18% of government revenue, just over a 50% cut.

Source: http://jubileedebt.org.uk/blog/hidden-debts-contribute-crisis-congo