VZCZCXYZ0012
RR RUEHWEB

DE RUEHKI #0049/01 0181641
ZNR UUUUU ZZH
R 181641Z JAN 07
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 5423
INFO RUEHXR/RWANDA COLLECTIVE
RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RUEAIIA/CIA WASHDC

UNCLAS KINSHASA 000049 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EMIN ELAB EAIR PGOV CG
SUBJECT: DRC DECEMBER MONTHLY ECONOMIC REVIEW 
 
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Summary 
------- 
 
¶1. (U) 
- The Central Bank's foreign exchange reserves remain below target. 
 
- Several artisanal miners died after a clash with police in Katanga 
province. 
 
-  DRC's water authority terminated two managers for alleged 
corruption. 
 
- Spanish/Congolese airline Bravo Air Congo increased its domestic 
fleet by adding a DC-9. 
 
-  According to Post's market basket survey, December consumer 
prices decreased by over two percent compared to November, and the 
Congolese Franc (CF) appreciated against the USD. End summary. 
 
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Anti-Corruption 
--------------- 
 
¶2. (U) The management committee of REGIDESO (DRC's water authority) 
has terminated two supervisors on charges of falsifying bid tender 
documents in exchange for payments of approximately USD 53,000 each. 
 
 
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Aviation 
-------- 
 
¶3. (U) Spanish/Congolese-owned Bravo Air Congo, took delivery of 
another DC-9, adding to its domestic DRC service fleet. 
 
¶4. (U) Fourteen known plane crashes occurred in the DRC in 2006; 
fifteen occurred in 2005. 
 
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Energy 
------ 
 
¶5. (U) The Minister of Economy suspended preferential tariff rates 
that SNEL (DRC's electric power parastatal) had granted to several 
of its largest customers. These reductions totaled about USD 450,000 
according to SNEL officials.   (Comment: The customers who had 
received the reductions, however, are among the few who pay their 
electricity bills in the DRC. End comment.) 
 
----------------------- 
Finance/Development Aid 
----------------------- 
 
¶7. (U) The DRC's Central Bank Governor announced that the GDRC's 
foreign reserves are at two and a half weeks, well below the current 
target of about five weeks. 
 
¶8. (U) The banking sector has experienced growth in 2005, according 
to the Central Bank. The GDRC has licensed three new commercial 
banks, Invest Bank of Congo, Mining Bank of Congo and Sofibanque, 
bringing the total to 15.  The Central Bank Governor also announced: 
a 231 percent increase in deposit accounts, rising from USD 162 
million to USD 523 million; a 35 percent increase in credit 
extended, rising from USD 264 million to USD 365 million. 
 
¶9. (U) The Chinese press agency Xinhua reported that the Government 
of China is preparing to donate USD 2.5 million to the GDRC for 
unspecified reconstruction projects. 
 
---------------------------- 
Intellectual Property Rights 
---------------------------- 
 
¶10. (U) The DRC's Minister of Culture held a seminar with Congolese 
musicians to discuss the infringement of intellectual property 
rights.  Congolese musicians regularly complain that the GDRC fails 
to enforce music copyrights. 
 
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Labor 
----- 
 
¶11. (U) Employees of three of the GDRC's main revenue collection 
agencies went on strike for two days to demand payment of salary 
arrears and pay bonuses.  The striking employees work for DGI 
(income tax), DGDRD (administrative, real property and judicial 
payments) and OFIDA (customs).  Negotiations between the strikers' 
unions and the Minister of Finance ended the work stoppage. 
 
¶12. (U) Employees in the Orientale province governor's office are on 
strike, demanding payment of over one year of salary arrears. 
 
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Mining 
------ 
 
¶13. (U) The CEO of Nikanor, a London Alternative Investment 
Market-listed company closely associated with Israeli Dan Gertler, 
said the company is interested in buying assets of other 
copper/cobalt operations in the DRC or Zambia, although he announced 
no specific plans. Nikanor is developing three open-pit mines in the 
DRC, via a joint venture agreement with Gecamines (DRC's 
copper/cobalt mining parastatal). 
 
¶14. (U) As many as seven persons reportedly died December 28 in a 
clash with police near Lubumbashi, Katanga, when CHEMAF, an 
Indian-owned copper mining company, forcibly removed artisanal 
diggers from its property. 
 
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Transportation 
-------------- 
 
¶15. (U) The DRC's public maritime shipping company (CMDC) is trying 
to obtain two 15,000 ton ships; the acquisitions would be CMDC's 
first in a decade, which currently has no ships.  CMDC is reportedly 
working with ONATRA (DRC's port authority) to install an improved 
cargo handling system to meet its projected handling needs at the 
DRC's main maritime port, Matadi, in Bas Congo province. 
 
----------------------- 
Consumer Inflation Rate 
----------------------- 
 
¶16. (U) Post's market-basket survey indicates a 2.4 percent December 
consumer deflation rate and a year-to-date cumulative inflation of 
21 percent.  The IMF and Central Bank calculate annual inflation for 
2006 at 18.2 percent. (Comment: Differences between the estimated 
inflation rates are in part because the IMF and Central Bank 
includes higher cost items such as health care and leisure care 
costs, and also because Post calculates real, rather than official, 
transportation costs. End comment.) 
 
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Exchange Rate 
------------- 
 
¶17. (U) The Congolese Franc (CF) appreciated by five percent against 
the USD in December, according to the Congolese Central Bank's 
official exchange rate. 
 
Week ending  12/08 12/15 12/22  12/30 
 
Central Bank Rates: 529  519  512  503 
Parallel Rates 
Kinshasa   530  520  515  510 
Lubumbashi  525  530  520  515 
Mbuji-Mayi  530  530  520  510 
Bukavu/Goma  535  535  520  515 
Kisangani   530  535  525  525 
Matadi/Boma  530  530  530  530 
 
MEECE