This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 KINSHASA 001540 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAGR EAID EAIR ECON EFIN EIND ENRG EPET PGOV PREL CG
SUBJECT: ECONOMIC REPORT - AUG 05 THROUGH AUG 12 
 
SUMMARY 
 
¶1. Prices remain stable despite the collapse of the Mai- 
Ndombe bridge.  Exchange rates are very stable. 
COPIREP will pay out USD 11.5 million in severance 
packages to liquidate three Congolese banks.  The 
government of the People's Republic of China is funding 
construction of a 150 bed hospital in the N'Djili 
district of Kinshasa.  Unidentified thieves stole 3,000 
meters of electrical transmission cable from SNEL 
lines, disrupting power supply to Kisangani.  The 
African Development Fund will distribute USD 36.3 
million in loans and grants to aid agriculture in Bas- 
Congo and Bandundu provinces.  Norway agreed to forgive 
USD 700,000 of the DRC's debt.  A cholera epidemic has 
infected around 600 and killed 56 in Nord-Kivu 
province. 
 
MONETARY AND PRICE UPDATE 
 
¶2. Prices have only risen approximately 25 percent on 
certain food staples.  Completion of repairs on the Mai- 
Ndombe bridge will alleviated upward pressures. 
 
¶3. Exchange rates remain very stable.  Effects of the 
recent BCD liquidation appear to have run their course 
on the Kinshasa market.  Rates remain slightly higher 
in the east due to continuing tensions. 
 
BANKING 
 
COPIREP TO DISTRIBUTE USD 11.5 MILLION IN SEVERANCE PAY 
 
¶4. Le Comite de la Reforme des Enterprises Publique 
(COPIREP, a World Bank-funded corporation designed to 
reform the DRC's public enterprises) will pay out USD 
11.5 million in severance packages to workers of three 
banks ordered liquidated by the Banque Centrale du 
Congo (BCC).  The Nouvelle Banque de Kinshasa (NBK), 
Banque Congolaise du Commerce Exterieur (BCCE), and 
Banque de Credit Agricole (BCA) are being liquidated as 
part of the BCC's restructuring of the DRC's banking 
sector. 
 
INFRASTRUCTURE 
 
CHINESE FUND HOSPITAL IN N'DJILI 
 
¶5. The People's Republic of China has funded the 
construction of a 150 bed hospital in the N'Djili 
district of Kinshasa.  A Chinese engineering firm will 
build the hospital at a cost of USD 6 million. 
 
3,000 METERS OF ELECTRICAL CABLE STOLEN 
 
¶6. Local press reports that approximately 3,000 meters 
of low-voltage electrical transmission cable was 
unearthed, cut, and stolen near Kisangani, Orientale 
province.  La Societe National d'Electricite (SNEL) 
claims it is currently unable to replace the stolen 
cable, and says that Kisangani is at risk for power 
outages as a result of the theft. 
 
MBANDAKA AIRPORT REPAIRS COMPLETED 
 
¶7. Mbandaka airport commander Gedeon Mangolopa reported 
that Mbandaka airport, which was damaged during the 
civil war, has been restored and is now in conformity 
with Congolese air navigation safety standards. 
Repairs were financed from the airport's operating 
revenues.  Work consisted primarily of repairs to the 
communications system and control tower improvements. 
VHF and HF radios were installed for air traffic 
control and communication, and navigational beacons 
were replaced. 
 
AGRICULTURE 
 
SOUTH KIVU SUGAR MILL REOPENS 
 
¶8. The Kiliba sugar mill in South Kivu province has 
reopened with USD 25,000 in GDRC financial support 
after several years of inactivity.  The mill had closed 
due to regional insecurity and mismanagement of funds. 
Kiliba once employed some 3,500 workers, and will 
reopen with a staff of 147. 
 
PETROLEUM 
 
GASOLINE SHORTAGE IN KISANGANI 
 
¶9. Local press reports that Kisangani is experiencing a 
severe gasoline shortage due to transportation problems 
on the Congo River.  Low river water levels have 
prevented fuel barges from reaching the city.  Prices 
per liter of gasoline have already moved from FC 400 to 
FC 700, and will likely continue to rise. 
 
AID 
 
AFRICAN DEVELOPMENT FUND AIDS DRC AGRICULTURE 
 
¶10. The African Development Fund will provide USD 36.3 
million to support agricultural reform and expansion in 
the DRC.  USD 26.1 million in loans and 10.2 million in 
grants will be used to repair agricultural access 
routes, rehabilitate market infrastructure, and expand 
institutional capacities.  The Fund will also 
distribute seeds and provide training and rural 
planning assistance.  The aid is intended to ensure a 
stable food supply in the provinces of Bandundu and Bas- 
Congo. 
 
NORWAY FORGIVES USD 700,000 IN DEBT 
 
¶11. The Norwegian Ambassador and DRC Minister of 
Finance Andre-Phillipe Futa signed an agreement to 
annul some USD 700,000 of the DRC's debt to Norway in 
conformity with the DRC's HIPC program. 
 
HEALTH 
 
WORLD BANK ENVOY INSPECTS DRC HEALTH SECTOR 
 
¶12. Eva Jarawan, a World Bank public health specialist 
is in the DRC on a two-week mission to assess the state 
of the country's health care infrastructure.  The 
inspection mission is part of the World Bank's USD 45 
million Programme Multisectoriel de Rehabilitation et 
Reconstruction (PMURR). 
 
CHOLERA EPIDEMIC IN EASTERN DRC 
 
¶13. Local press reports that since June 2004, 
approximately 600 cases of cholera have been reported, 
with 56 fatalities, in the Bisiye mining district near 
Walikale, Nord-Kivu province.  Local health 
infrastructure is reportedly strained by the outbreak. 
Additional medical supplies and personnel have been 
requested from Goma.  Local authorities have launched a 
campaign to sensitize the local population to 
preventive hygiene measures. 
 
¶14. INFLATION BY CATEGORY  (IN PERCENT) 
 
WEEK ENDING            7/16    7/23    7/30    8/6 
FOOD                   2      -2       2      -1 
BEVERAGE               0       0       0       0 
NON-FOOD               1       8       0       0 
CLOTHING               0       0       0       0 
RENT                   0       0       0       0 
TRANSPORT              0       0       0       0 
SCHOOL COSTS           0       0       0       0 
UTILITIES              0       0       0       0 
COMBINED FIGURES 
WEEKLY INFLATION       0.9    -0.6     0.9    -0.2 
MONTHLY INFLATION      0.8     0.4     1.2    -0.2 
 
¶15. EXCHANGE RATE DEVELOPMENTS 
 
                   7/16     7/23     7/30     8/6 
 
CENTRAL BANK RATE  389.5709 388.1864 389.1094 389.1157 
PARALLEL MARKET 
-KINSHASA          390-395  388-398  385-390  385-390 
-LUBUMBASHI        380-390  385-395  380-385  380-385 
-MBUJI MAYI        380-385  380-385  380-385  380-385 
-KISANGANI         400-410  400-410  400-410  375-385 
-GOMA              400-410  400-410  400-410  400-410 
-BUKAVU            400-410  400-410  400-410  400-410 
 
MEECE