The International Monetary Fund’s (IMF) executive board approved a bailout worth nearly $449 million for OPEC member, Congo Republic potentially setting a precedent for other countries struggling under the weight of large debts to China.
Congo’s economy suffered from a sharp drop in crude prices in 2014, and debt levels had ballooned to 118 per cent of GDP by 2017.
But even as its oil producing neighbours secured IMF programs, Congo’s negotiations for a bailout dragged on for two years.
The Fund demanded that Congo ensure the long-term sustainability of its debt as a pre-condition for a three-year extended credit facility programs.
Congo reached an agreement to restructure a portion of its Chinese debt in April.
“The recent agreement to restructure the Republic of Congo’s bilateral debt should be accompanied by continued good-faith efforts to restructure commercial debt,” said IMF Deputy Managing Director Mitsuhiro Furusawa.
Congo’s Chinese debt stood at nearly 1.48 trillion CFA francs at the end of March.