May 9, 2019 / 5:02 PM / a month ago

UPDATE 2-IMF provisionally agrees three-year loan deal with Congo Republic

(Recasts with agreement on lending programme, adds quote)

DAKAR, May 9 (Reuters) - An International Monetary Fund mission said on Thursday that it had agreed a three-year lending programme with Congo Republic subject to the government’s fulfilment of reforms and approval by the IMF’s executive board.

Negotiations over a bailout for the oil-dependant economy have dragged on since 2017, as Congolese authorities failed to convince the IMF they were doing enough to control the national debt or tackle corruption.

But Congo’s reduction of its debt load and an agreement struck last month to restructure some $2 billion in debt to China led the IMF mission to back a programme.

“Once the authorities have implemented the pending actions as agreed during the mission, the IMF team will submit a report in support of the Republic of Congo’s request for a three-year arrangement under the Extended Credit Facility,” the mission said in a statement after a week-long visit.

The agreed measures include submitting a report to parliament on notoriously opaque oil-backed loans that the state petroleum company has taken out with private lenders.

The mission also said that Congo’s economy is expected to grow more than 5 percent in 2019, up from less than 1 percent in 2018, mainly because of a rise in oil production and prices.

The economy was hurt by a sharp drop in oil prices in 2014, causing debt levels to balloon to 118 percent of GDP in 2017.

But global oil prices last month hit their highest level in five months, helping Congo cut debt levels to less than 85 percent of GDP. (Reporting by Aaron Ross; Writing by Juliette Jabkhiro; Editing by Catherine Evans)

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