HomeBase MetalsDRC to receive US$195 million IMF loan

DRC to receive US$195 million IMF loan

David Hawley,
senior advisor,
external relations
department of the
Washington DC, USA — MININGREVIEW.COM — 13 March 2009 – The International Monetary Fund (IMF) has revealed that it is to give the Democratic Republic of Congo (DRC) US $195.5 million (R2 billion) in loans to help ease the impact of a slump in the country’s mining exports and foreign investment.

“The funds will be drawn from the Exogenous Shocks Facility, after the lender reduced restrictions to make it easier for poor nations to access funds quickly,” the Washington-based IMF revealed on its Website.

Bloomberg News reports that countries from Africa to Eastern Europe are turning to the IMF for loans to stabilise economies and banking systems ravaged by the global financial crisis. Zambia is currently in talks with the IMF for US$200 R2 billion in loans, according to Zambian central bank governor Caleb Fundanga, while Kenya may receive US$100 million (R1 billion) in loans, the IMF said this week.

“The global financial crisis and the economic slowdown induced sharp declines in the world prices of the Democratic Republic of the Congo’s key exports,” the IMF explained. “The loans will help to cushion the impact of the exogenous shocks on the economy, and facilitate the economy’s adjustment to the shocks.”

Several mining projects in the DRC – which holds a third of the world’s cobalt reserves and 4% of all copper – have been scaled down or put on hold, curbing economic growth. The IMF expects DRC’s economy to expand 4.4% this year, down from an estimated 8.2% in 2008.