Republic Of Congo's Debt A Third Higher Than IMF Estimate: NGO

The Republic of Congo's debts could be a third greater than was estimated last year when the IMF gave the country its fourth bailout, an anti-corruption group said Monday

Brazzaville, (APP - UrduPoint / Pakistan Point News - 27th Jan, 2020 ) :The Republic of Congo's debts could be a third greater than was estimated last year when the IMF gave the country its fourth bailout, an anti-corruption group said Monday.

Its public debts "could exceed $12.5 billion" (11.34 billion Euros) because of previously undisclosed liabilities by its national oil company, the SNPC, the Global Witness said.

The figures are potentially "catastrophic", it said.

SNPC -- the Societe Nationale des Petroles du Congo -- has at least $2.7 billion in previously undisclosed debts to oil majors, including Total, Chevron and Eni, it said after analysing a trove of documents.

"This represents a 50-percent increase since 2010. A further $606 million is owed to a consortium of banks led by the pan-African conglomerate Ecobank, secured against oil," Global Witness said.

Global Witness said the SNPC's debts could end up on the state's books.

If so public debt, which hit 119 percent of GDP in 2016 and then fell to 86 percent, would balloon to as much as 115 percent.

During the country's belt-tightening years from 2015-2018, public spending dropped by more than half, citizens went without pension payments and hospitals were chronically under-resourced.

The International Monetary Fund (IMF) last July granted Congo, a major oil exporter, a credit line of $448.6 million after its economy was battered by a years-long slump in the price of crude.

Congo has been unable to repay its creditors on agreed terms and timetables since 2015 at least.

The IMF postponed payment of a second tranche of $48 million in December.

"Our analysis raises serious questions about where Congo's oil money has gone," said Global Witness's Natasha White.

"It portrays an oil sector skewed in favour of foreign oil companies, including Total, Chevron and Eni, and reveals major red flags for corruption.

"This warrants close scrutiny -- particularly from the IMF." Global Witness said its analysis was based on SNPC accounts and oil contracts made public in 2018 and 2019 under the conditions of the IMF bailout.

The documents pointed to a range of anomalies, it said.

They include $156 million in SNPC dividends that should have gone to the Congolese state but went missing, Global Witness said.

There was also a writeoff by Eni, the Italian oil major, of more than $280 million amid a licence renewal process that is being probed in Italy for suspected corruption, it said.