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Congo: currency, inflation add to political woes

Tuesday, August 08, 2017 - 01:58

The Democratic Republic of Congo's economic indicators are all blinking red as Africa's top copper producer struggles with a fast sinking currency and soaring inflation. David Pollard reports.

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Say the words 'foreign exchange' on the streets of Kinshasa and you're unlikely to make new friends. The Democratic Republic of Congo capital is currently home to the world's worst-performing currency. (SOUNDBITE) (Lingala) KINSHASA RESIDENT, CATHY SAYING: "Right now, I can't even pay my rent. The Congolese franc has lost value and the dollar is too expensive ... How can anyone buy dollars to pay for rent?" A franc that's slid 30 per cent this year is not the only scary statistic. Foreign reserves are down to three weeks of imports. Inflation is closing on a 45 per cent rate. As low commodity prices and high deficits deal a double blow to Africa's top copper producer ... And leave its central bank reeling. (SOUNDBITE) (French) CONGO'S CENTRAL BANK GOVERNOR, DEO GRACIAS MUTOMBO SAYING: "It's unacceptable that foreign revenues remain low, there has been no progress, because we have been living in a situation where we have a shortage of foreign exchange. We thought we'd have enough by the second half of the year, but that has not been the case." Here observers see another sign of desperation. A meeting between the prime minister and officials of Russia's VTB bank .... To discuss a possible Eurobond issue. With one major international snag: VTB is subject to US sanctions. Any deal could jeopardise any IMF moves to provide help. Though some think Congo would be better to help itself. (SOUNDBITE) (French) ECONOMIST, JEROME SEKANA SAYING: "We have over 80 million hectares of arable land, but only 10 percent is used. If we cultivated more, then we wouldn't need to import food that costs one billion dollars. That money could go towards running our economy." IMF assistance, it's warned, depends on political stability. But violent street protests against President Joseph Kabila are stoking fears of a return to the civil wars of the turn of the century. And the comeback of one other statistic: the thousands upon thousands that died in them. In the meantime, there are few winners - even among those who do have the cash to make an exchange.

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Congo: currency, inflation add to political woes

Tuesday, August 08, 2017 - 01:58