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

UNCLAS SECTION 01 OF 02 KINSHASA 001562 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID ECIN ECON EFIN ELTN EMIN EPET EWWT PGOV PREL CG
SUBJECT: ECONOMIC REPORT - AUG 13 THROUGH AUG 20 
 
SUMMARY 
 
¶1. Food prices have decreased due to the reopening of 
the Mai-Ndombe bridge.  Exchange rates remain stable, 
but the FC is trading at a slightly higher value on the 
Kinshasa parallel market than official rates.  The 
DRC's National Assembly created a commission to 
investigate Gecamines' mining and contracting 
practices.  Cohydro opened a new gas station in 
Kinshasa.  Barge traffic resumed on a critical stretch 
of the Congo River between Ubundu and Kindu.  Contracts 
have been awarded for a World Bank IDA funded USD 100 
million project to repair National Routes No. 2 and No. 
¶4.  The Great Lakes States have signed an agreement 
laying the groundwork for a transit network linking the 
DRC, Kenya, Rwanda, Uganda, and Burundi.  MONUC plans 
to transport 1,000 tons of humanitarian assistance by 
rail between Ubundu and Kisangani over the next six 
months. 
 
MONETARY AND PRICE UPDATE 
 
¶2. Food prices dipped slightly due to the completion of 
repairs to the Mai-Ndombe bridge on National Route No. 
1 from Bandundu province to Kinshasa.  Overall, prices 
have decreased 0.8 percent this month. 
 
¶3. Exchange rates remain stable, but the FC is trading 
at a slightly higher value on the Kinshasa parallel 
market than official rates.  (Comment.  The difference 
between the parallel market and bank rate values is 
approximately FC 5.  This equates to only a few cents. 
Post does not believe the disparity to be significant, 
but will continue to monitor exchange rates closely. 
End Comment.)  Exchange rates in eastern DRC remain 
slightly elevated due to continuing tensions. 
 
MINING 
 
GDRC CREATES COMMISSION TO INVESTIGATE GECAMINES 
 
¶4. The National Assembly of the DRC has formed a 
commission to investigate the mining and contracting 
practices of state-owned Gecamines.  The commission was 
called for by MP Mayombe Mbuyoko, and is composed of 
nine MPs.  The commission's investigation will last 
fifteen days, after which a report will be produced. 
 
PETROLEUM 
 
¶5. Vice President Yerodia Ndombasi commemorated the 
opening of a new gas station in Kinsuka, Kinshasa.  The 
station was built by the parastatal Cohydro and has a 
50 cubic meter storage capacity. This most recent 
opening follows the inauguration of new Cohydro 
stations in Kisangani (Orientale province), Mbuji-Mayi 
(Kasai Oriental province), and Mbandaka (Equateur 
privince). 
 
TRANSPORTATION 
 
UBUNDU-KINDU RIVER TRAFFIC RESUMES 
 
¶6. Barge traffic on the Congo River between Ubundu, 
Orientale province, and Kindu, Maniema province, has 
resumed after six years of inactivity.  The 350km 
stretch of river had been a primary regional trade and 
transportation route, but was closed during the civil 
war.  Office des Routes has donated a small barge to a 
local NGO, Solidarite Ville-Campagne, for three months 
in the hope of rekindling river commerce between Ubundu 
and Kindu.  (Comment.  River commerce along this route 
is particularly important because it fills a gap in the 
SNCC rail line between Kisangani, Orientale province, 
and southern and eastern DRC.  End Comment.) 
 
USD 100 MILLION AWARDED FOR REPAIR OF ROADS 
 
¶7. BCECO Director-General Mr. Matata Ponyo announced 
that contracts worth USD 100 million have been awarded 
to four companies for the rehabilitation of National 
Routes No. 2 and No. 4.  The project was funded by the 
World Bank's IDA.  National Route No. 2 will be 
repaired between Mbuji-Mayi and Kasongo (524km) and 
between Bukavu and Kasongo (496km).  National Route No. 
4 will be repaired between Kisangani and Niania (341mk) 
and between Niania and Beni (410km).  BCECO estimates 
that the project will take two months to complete. 
(Comment.  Two months is optimistic at best. 
Logistical difficulties and continuing instability will 
likely cause serious delays.  End Comment.) 
 
GREAT LAKES STATES SIGN TRANSIT AGREEMENT 
 
¶8. International press reports that representatives 
from Kenya, Uganda, Rwanda, Burundi, and the DRC have 
signed the Northern Corridor Transit Agreement.  The 
agreement outlines plans to link the five states by 
rail and waterway from the Kenyan port of Mombassa to 
the western coast of the DRC.  The transit network will 
utilize existing rail routes in Kenya and Uganda, and 
will require the construction of a new line from 
Kasese, Uganda to Kisangani, DRC.  The signing of the 
agreement paves the way for feasibility and design 
studies. 
 
HEALTH 
 
RESURGENCE OF EPIDEMICS 
 
¶9. The WHO reported significant increases in 
communicable disease infection rates in several DRC 
provinces.  Nord-Kivu and Sud-Kivu provinces reported 
5,511 cases of cholera with 147 fatalities.  Kasai 
Oriental and Equateur provinces reported 11,000 cases 
of meningitis with 1,357 fatalities.  Ituri province 
reported 80 cases of plague with 4 fatalities.  Several 
cases of viral hemorrhagic fever were reported in Kasai 
Oriental, Bandundu, and Sud-Kivu provinces.  The WHO 
attributes the recent rise in infection to the lack of 
access to clean drinking water, food, shelter, and 
medical facilities prevailing in the conflict-prone 
eastern DRC. 
 
AID 
 
¶10. MONUC plans to transport approximately 1,000 tons 
of humanitarian assistance by rail between Kisangani 
and Ubundu, Orientale province, to support the local 
population and improve access to the province for 
various aid organizations.  The WFP, OCHA, and SNCC 
(DRC railroad parastatal) will participate in the six- 
month project. 
 
¶11. INFLATION BY CATEGORY  (IN PERCENT) 
 
WEEK ENDING            7/23    7/30    8/6     8/13 
FOOD                  -2       2      -1      -2 
BEVERAGE               0       0       0       0 
NON-FOOD               8       0       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      -0.6     0.9    -0.2    -0.6 
MONTHLY INFLATION      0.4     1.2    -0.2    -0.8 
 
¶12. EXCHANGE RATE DEVELOPMENTS 
 
                   7/23     7/30     8/6      8/13 
CENTRAL BANK RATE  388.1864 389.1094 389.1157 390.1757 
PARALLEL MARKET 
-KINSHASA          388-398  385-390  385-390  385-390 
-LUBUMBASHI        385-395  380-385  380-385  380-385 
-MBUJI MAYI        380-385  380-385  380-385  385-390 
-KISANGANI         400-410  400-410  375-385  375-385 
-GOMA              400-410  400-410  400-410  400-410 
-BUKAVU            400-410  400-410  400-410  400-410 
 
MEECE