Acquisition of a commercial bank in Democratic Republic of Congo
January 5, 2007 11:31am CST
A private group wants to buy a commercial bank in Democratic Republic of Congo. The name, the assets and the price are requested. Location in Kinshassa, if possible.
5 Jan 07
1. The Democratic Republic of the Congo (DRC) is going through a critical period in its history, both politically and economically. On the political and institutional side, the new Transitional Constitution was enacted on April 4, 2003. His Excellency Major General Joseph Kabila was sworn in as President of the Republic on April 7, 2003 for a transitional period of two years, after which free and transparent elections are to be held. The four Vice-Presidents, Mr. Jean-Pierre Bemba (Mouvement de Libération du Congo), Mr. Azarias Ruberwa (Rassemblement Congolais pour la Démocratie-Goma), Mr. Yerodia Abdoulaye Ndombasi (Mouvance Présidentielle), and Mr. Zahidi Ngoma (unarmed political opposition), will be sworn in on July 14, 2003. The new Government of National Unity will take office on July 11, 2003 and the Council of Ministers will meet for the first time on July 15, 2003. On July16, 2003, the new government will formally and publicly state its intention to continue to implement the Government Economic Program (PEG) and its Interim Poverty Reduction Strategy Paper. It will also present this program to the new National Assembly and the Senate before end-July 2003. A new army of National Unity will be established. The country has now been reunified and peace has been restored, although tensions remain in some regions, particularly in the eastern part of the country. We call on the international community to continue to help us fill as soon as possible the security vacuum in some parts of our vast national territory. We welcome the decision of the United Nations (UN) to deploy an international force in Ituri to restore peace. Moreover, the third phase of operations of the United Nations Organization Mission (MONUC) in the DRC continues. We hope that the Multi-Country Demobilization and Reintegration Program (MDRP) for soldiers will be put into place as quickly as possible, with the assistance of the World Bank and the United Nations. We plan to take stock of the situation in all provinces as soon as possible, with the help of our international partners and especially the World Bank, so that we can better identify their needs and consolidate the reunification of the country without jeopardizing our macroeconomic stability. On this basis, and bearing in mind the objectives set out in our interim Poverty Reduction Strategy Paper (I-PRSP), we will be better able to prepare the government's pro-poor budget for 2004, which will cover the entire country for the first time since the restoration of peace. In the meantime, we will execute an amended 2003 budget, particularly to take account of expenditures relating to the installation of the Government of National Unity and the country's new institutions, as well as the revenue expected from the reunified provinces. Accordingly, a draft Supplementary Budget Law will be adopted by the government by end-June 2003 and submitted to the first session of Parliament in July 2003. II. PEG Implementation During the Period October 2002-March 2003 2. We are pleased to note that implementation of the government economic program (PEG) was broadly satisfactory during the period October 2002-March 2003, despite the need to better manage public expenditure and its composition, and some delays in implementing structural and sectoral reforms since the start of 2003. Taking into account the less favorable international situation and the impact of reunification, we believe that the overall objectives for end-2003 can still be met. We are aware, however, that one of the major challenges facing the new Government of National Unity will be to maintain interministerial coordination. To this end, we plan in particular to strengthen the two interministerial committees responsible for monitoring the implementation of the PEG and the poverty reduction strategy, respectively, and to take into account the new composition of the government. With the help of the international community, we will continue to strengthen the administrative capacity of the central government and, gradually, the provincial and local governments as well. 3. Our estimates confirm the resumption of economic growth in 2002, which amounted to about 3 percent, as programmed (Table 1). Preliminary estimates for 2003 confirm this trend. According to the new National Investment Promotion Agency (ANAPI), which was created to simplify administrative procedures, more than forty investment applications from the domestic and foreign private sector covering the period 2003-07 and amounting to some US$1.3 billion have been approved. End-of-period inflation was 16 percent at end-December 2002, compared with the originally programmed rate of about 13 percent for 2002, down sharply from 135 percent at end-2001. At end-May 2003, end-of-period inflation stood at 4.6 percent, owing to the rise in the prices of petroleum products by 9 percent on February 15 and 10 percent on March 17. The rate adjusted for these two price increases was around 2.5 percent, in line with the inflation rate of 6 percent projected for the end of the year. The exchange rate depreciated by 23 percent in 2002, but has remained stable at around CGF 415 per US$1 since the beginning of 2003. Fiscal policy 4. Through end-2002, fiscal performance was better than originally programmed and largely in line with the estimates made with Fund staff during the first program review. Revenue (excluding grants) was higher than expected thanks to oil revenue, while total expenditure was lower. However, current expenditure, particularly on goods and services, was higher than anticipated despite the measures adopted by year's end to freeze operating expenditure with the exception of certain minimum allocations (dotations minimales), while capital expenditure, particularly externally financed capital expenditure, was far lower than programmed, as project-related disbursements were much smaller than anticipated. As a result, the planned shift in the composition of expenditure in favor of social and infrastructure expenditure was not achieved. Expenditures of the Institutions politiques (including the Presidency) and on security and defense continued to rise, including during the last quarter, and amounted to 48 percent of primary expenditure for the year (3.3 percent of GDP). In addition, arrears estimated at 0.6 percent of GDP were accumulated on utility outlays. The domestic primary balance (cash basis) nonetheless showed a surplus representing 1.4 percent of annual GDP, compared with the 0.9 percent initially programmed, and the overall unconsolidated balance a surplus of 0.6 percent instead of the projected deficit of 0.3 percent of GDP (Table 2A). Despite the BCC's higher-than-anticipated cash deficit, the consolidated overall balance (cash basis) was balanced, compared with the programmed deficit of 0.4 percent. Taking account of net foreign disbursements, unadjusted net bank credit to the government was much lower than programmed. 5. The government's 2003 budget was adopted by Parliament on March 2, 2003, and follows the new functional, administrative and economic classification system. In addition, the budget provides for the elimination of 153 budgets annexes. The monthly cash-flow plan (cash basis) continues to be implemented. However, the BCC, in agreement with the Minister of Finance, but without the required documentation, has financed extrabudgetary expenditure in violation of the presidential decree of April 12, 2002. Consequently, the applicable continuous performance criterionperformance criterion—in effect since March 24, 2003—was missed byin effect since March 24, 2003—was missed by roughly US$1.2 million. During the first two months of the year, expenditure was executed by renewing the monthly appropriations for 2002. The budget execution instructions that are about to be published will initiate implementation of the new expenditure chain, from the commitment to the payment phase. 6. Although revenues were on track during the first three months of 2003, we realize that measures need to be taken to limit exemptions and to eliminate the offsetting of revenue. Total expenditure was 0.5 percent of GDP lower than projected, owing in particular to externally financed project expenditure and external debt service, which were lower than projected. Domestic primary expenditure, however, was 0.4 percent of GDP higher than programmed. Despite a larger than programmed increase in military and police salaries and the delay in eliminating "ghost workers" from the government payroll, wage expenditure was lower than expected, mainly as a result of the postponement of the planned increase in civil service wages. There were no wage arrears at end-March 2003. The census of civil servants, which was to have been conducted with assistance from Belgium and the UNDP, was delayed. Military and security expenditure, as well as expenditure by the Institutions politiques (including the Presidency), continued to rise, owing to the Intercongolese Dialogue and the security vacuum in some parts of the country. The domestic primary balance (cash basis) shows a surplus of 0.1 percent of GDP as opposed to the 0.5 percent programmed, the overall unconsolidated balance (on a cash basis) a surplus of 0.1 percent of GDP instead of a 0.1 percent deficit, and the consolidated balance a deficit of 0.1 percent of GDP instead of 0.2 percent. All certificates of deposit were paid off, as provided for in the program. Net bank credit to the government, before adjustment to account for net external disbursements, was much lower than expected. 7. Temporary cash-flow difficulties led the government to have recourse to interest-bearing advances from oil-producing companies in the amount of US$9.5 million in January and February 2003. However, these advances were fully repaid by end-March 2003, and the expenditure financed with these advances—which were included in the government cash–flow plan—were