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Cablegate: Drc February Economic Review

VZCZCXRO7455
RR RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMR RUEHRN
DE RUEHKI #0320/01 0751053
ZNR UUUUU ZZH
R 161053Z MAR 07
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 5799
INFO RUEHXR/RWANDA COLLECTIVE
RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEAIIA/CIA WASHDC
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/HQ USEUCOM VAIHINGEN GE

UNCLAS SECTION 01 OF 02 KINSHASA 000320

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON EFIN EINV ELAB ENRG PTER CG
SUBJECT: DRC FEBRUARY ECONOMIC REVIEW

REF: A. KINSHASA 177
B. KINSHASA 249
C. KINSHASA 178

1. (U) Summary.

- The World Bank will spend up to USD 180 million on
quick-impact reconstruction projects in the DRC.

- The IMF conducted a visit to the DRC to review the status
of its current program with the GDRC.

- The GDRC has not yet drafted a 2007 budget.

- Dredging work is underway to increase the productivity of
Inga Dam in Bas- Congo province.

- The US Coast Guard visited the DRC to evaluate the security
of its maritime ports. End summary.

DEVELOPMENT
-----------

2. (U) In advance of the March visit of World Bank President
Paul Wolfowitz, the WB unveiled plans to spend USD 140-180
million on immediate reconstruction projects in the DRC
(reftel A), including urban road repair and internal debt
repayment.

FINANCE AND INVESTMENT
----------------------

3. (U) A Washington-based IMF team began a two-week review of
the DRC's Staff-Monitored Program on February 24 (septel).
Among key issues it examined were the GDRC's overspending in
January and February (reftel B) and a concomitant rise in the
exchange rate.

4. (U) The GDRC has not yet prepared a draft 2007 budget for
parliamentary consideration.

5. (U) DRC institutions continue to argue over the fee that
OCC, the DRC's import-export authority, can impose. While
OCC increased the fee to three percent, the Minister of
Economy decreed the fee should be returned to 1.5 percent,
following lobbying by the Congolese Chamber of Commerce.

6. (U) Bralima, a Heineken-owned and operated brewery in the
DRC, opened its third bottling line at its Kinshasa plant as
part of a USD 60 million investment for 2007.

ELECTRICITY
-----------

7. (U) SNEL (the DRC's electricity parastatal) acquired new
equipment to remove silt at Inga Dam in an attempt to
increase electricity production.

LABOR
-----

8. (U) Employees of MIBA, the DRC's ailing diamond mining
parastatal, appealed to the new Governor of Eastern Kasai to
intervene in connection with their salary and food ration
arrears.

9. (U) Employees of DGRAD, the DRC's administrative tax
agency, threatened to strike in protest over the CEO's
alleged embezzlement of funds.

MINING
------

10. In preliminary hearings in the criminal case in Katanga
province involving Anvil Mining (reftel C), the high military
court's president in Kinshasa rejected a defense request that
a trial judge be recused on the grounds of bias, according to
local media.

MARITIME TRANSPORT
------------------

11. (U) In compliance with the U.S. Maritime Transportation
Safety Act, the US Coast Guard conducted its fourth
evaluation of the GDRC's compliance with International
Maritime Organization's International Ship and Port Security
Code (septel).

EXCHANGE RATE and CONSUMER INFLATION

KINSHASA 00000320 002 OF 002


------------------------------------

12. (U) February exchange rate figures and consumer inflation
will be reported septel. The Congolese Franc (CF) continued
to depreciate, with parallel market rates in Kinshasa as high
as 560 CF per USD by late February.

13. (U) Following the termination of the SNCC (railway
parastatal) strike, food and fuel prices that had in some
cases tripled have noticeably decreased in Katanga and the
two Kasai provinces. For example, gasoline dropped from 1,200
CF per liter to 600 CF per liter, and the price of a kilo of
maize meal declined from 1500 CF to 240 CF.
MEECE

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