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INFO RUEHXR/RWANDA COLLECTIVE
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
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RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 08 KINSHASA 000413 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EMIN ELAB EAIR PGOV CG
SUBJECT: DRC APRIL ECONOMIC REVIEW 
 
¶1. (U) Summary 
 
Agriculture 
----------- 
 
-  New DRC Agricultural Code Presented to Traditional Chiefs 
- African Wildlife Foundation Assists Isolated Population 
- Orientale Province Poised to Renew Agricultural Activities 
 
Aviation 
-------- 
 
- CAA Suspends Flights, All Planes to South Africa for Check-Up 
- Hewa Bora Plane Added to EU Blacklist 
 
Banking Sector 
-------------- 
 
- Congolese Bank Improves on 2006 Performance 
- Seven New Banks Authorized to Operate in DRC 
 
Bilateral Cooperation 
--------------------- 
 
- The GDRC Attends Indian-Africa Summit 
- New Partnership between Uganda and DRC 
 
Cooperation 
----------- 
 
- New Start in GDRC - South Africa Relations 
 
Corruption 
---------- 
 
- Former Officials Misappropriate More than 30,000 Houses 
 
Environment 
----------- 
 
- Governors Meet to Address Increased Poaching in Salonga Park 
- REGIDESO Protests River Pollution 
 
Governance 
---------- 
 
- Congolese Consumer Group Demands Action against Food Price 
Increases 
- Smuggling Continues Near Shinkolobwe 
- Challenges for Congo's Poverty Reduction Strategy 
 
Health 
------ 
 
- Monkeypox Kills Two in Bokumu 
- Ministry of Health Sponsors Public Health Workshop 
- Drug Advertising Banned 
 
Infrastructure 
-------------- 
 
- Major Infrastructure Works Launched 
- Funding Available to Deepen Banana Port 
 
Labor 
----- 
 
- Doctors Strike in North Kivu 
- FEC Objects to USD 3 per Day Minimum Wage 
 
Microfinance 
------------ 
 
- DRC Micro-Finance Sector Examined 
 
Mining 
------ 
 
- Coltan Mining Continues in Northern Katanga 
- Germany Supports DRC Ore Certification and EITI 
- MIBA Takes Diamond Marketing Back From Partners 
- Freeport McMoRan Discusses Mining Contract Review with GDRC 
- Copper Belt Challenges 
 
Multilateral Cooperation 
------------------------ 
 
KINSHASA 00000413  002 OF 008 
 
 
 
- World Bank and IMF: Still More for the GDRC to Accomplish 
- AfDB Gives USD 60 Million Against Hunger 
- The WB Supports the DRC Decentralization Process 
- The WB Intervenes for Good Governance in DRC 
- The WB Grant to Empower DRC Private Sector 
- A UN Stabilization Strategy Signed 
- The GDRC Meets with Donors 
 
- South Kivu Province Population Feels Abandoned 
- AfDB Participates in Inga Dam Restoration 
- BCC Governor Attends G-24 Meeting 
 
Private Enterprises 
------------------- 
 
- British Oil Company Starts Activities in DRC 
 
Public Enterprises 
------------------ 
 
- Ministers Disagree Over Petroleum Revenues 
- Bas Congo Population Receives Funding from Oil Companies 
- Congo Oil Company Opens Shop in Kisangani 
- Cement Production Halted Temporarily 
- SONAS Seeks Revenue Increase with Insurance Scheme 
- Rail Traffic Resumes between Ubundu and Kindu 
- ONATRA Fights Smuggling, Increases Revenues 
- Public Enterprises under Scrutiny 
- IBM Contemplating Return to DRC 
 
Public Finance 
-------------- 
 
- COPIREP Seeks Means of Simplifying Taxation 
- Telecoms' Contribution to the Treasury 
- UNDP: Retrocession Process Faces Challenges 
- One Stop Shop for Customs Clearance 
- Misappropriation of Money at Kinshasa Provincial 
  Assembly 
- New Partnership among BIVAC, OCC and OFIDA 
- Inflationary Risks Remain 
- GDRC Budget May Improve with Donations 
 
Monthly Inflation and Exchange Rates 
------------------------------------ 
 
- Year-to-date Inflation Stands at 14 Percent 
- Congolese Franc Decreases by 0.54 Percent 
 
End Summary. 
 
 
Agriculture 
----------- 
 
(U)  Minister of Agriculture Nzanga Mobutu (son of the late Mobutu 
Sese Seko) has submitted a draft agricultural code to the National 
Association of Traditional Chiefs as a first step before debate 
within the National Assembly. Traditional chiefs are seen as the 
principal landowners in the DRC, despite the fact that by law all 
land is owned by the state, and any land usage must be approved by 
the local customary chief.  With their approval, this agricultural 
code would likely have enough support to guarantee its passage and 
implementation countrywide. (OMUHONGYA) 
 
(U)  The African Wildlife Foundation, in partnership with the ICCN 
(Congolese Institute for Natural Conservation) launched a project 
called "BOAT" in the Maninga - Lopori - Wamba area that aims at 
providing the population with manufactured goods. Empowered by a 
community based conservation philosophy, the project is funded by 
the French Fund for the World Environment and executed by the 
African Women Network for Sustainable Development, the Nederland 
Agency for Development, and the International Center for Research in 
agri-forestry.  (OMUHONGYA) 
 
(U)  The International Fund for Agricultural Development (IFAD) has 
granted Orientale Province in northeast DRC the sum of USD 40 
million to relaunch agricultural activities. Following many years of 
war, Orientale Province, once a strong agricultural producer, seems 
poised to renew its agricultural sector.  (Note: Improvements in 
agricultural production in the DRC usually requires infrastructural 
improvement as well, since so much was destroyed during the wars and 
farmers often cannot get their crops to market or process/store them 
in any way.  End note.) (OMUHONGYA) 
 
 
KINSHASA 00000413  003 OF 008 
 
 
Aviation 
-------- 
 
(U)  Partly as a result of the crash of rival Hewa Bora's DC-9 in 
Goma on April 15, the African Aviation Company (CAA) airline has 
suspended its domestic flights until sometime in May. CAA assured 
its clients that this action was due to a decision to perform a 
complete maintenance check in South Africa on all of its aircraft. 
(OMUHONGYA) 
 
(U)  The EU has added the one Congolese aircraft previously allowed, 
the Hewa Bora Airways plane which flew once a week to Brussels from 
Kinshasa, to the list of aircraft banned from flying in the 
27-nation bloc due to safety concerns, said an EU official.  EU 
representatives will be in the DRC to discuss the ban with GDRC 
Civil Aviation Authority (AAC) May 14-16.  (OMUHONGYA) 
 
Banking Sector 
-------------- 
 
(U)  The new Congolese Bank has published its balance sheet for 
¶2007. It generated a net profit of USD four million for fiscal year 
2007 up from under USD three million for 2006.  The increase is 
thought to be due to the speed with which the Congolese Bank 
installed itself in the former Union of Congolese Banks 
infrastructure nationwide.  (OMUHONGYA) 
 
(U)  Seven new commercial banks have been authorized to operate in 
the DRC by presidential decree.  They are: Ecobank, Invest Bank 
Congo, Mining Bank of the Congo, First International Bank, Finca, La 
Cruche Banque, and Socit Financihre des Banques (SOFIBANQUE). 
Most of these banks have been waiting for the presidential decree 
for over two years.  (OMUHONGYA) 
 
 
Bilateral Cooperation 
--------------------- 
 
(U)  President Kabila attended the Africa-India summit in New Delhi, 
along with seven other African presidents. The DRC welcomed this 
summit as an opportunity to learn from Indian experience. Two 
documents were signed: the "Delhi Declaration" and the "Indo - 
African Cooperation Blueprint Agreement". The declaration covered 
various political issues while the blueprint agreement points out 
key sectors of cooperation: education, science and technology, 
agriculture and human resources development. President Kabila met 
with several Indian companies: Tata, Jindal Steel, Kirloskar group, 
and Sonalika.  (OMUHONGYA) 
 
(U)  Uganda and the DRC have agreed to create a commission for the 
management of water resources in Lakes Edward and Albert. This new 
commission will work under the auspices of the Nile Basin 
Initiative. The Nile Basin Initiative currently includes nine 
countries: Burundi, Egypt, Ethiopia, Kenya, Rwanda, Sudan, Tanzania, 
Uganda and the DRC. (OMUHONGYA) 
 
Cooperation 
----------- 
 
(U)  A group of thirty bilateral agreements to be reviewed by a 
mixed DRC - South Africa commission lack funding.  A recent Chinese 
investment in Standard Bank (STANBIC Bank in the DRC) purports to be 
among the three largest investments in the DRC.  Other investments 
include the rehabilitation of Congo's airports, construction of new 
railway lines, repairs to ports, immunization projects, and 
modernization of the Inga Hydroelectric Dam.  (OMUHONGYA) 
 
Corruption 
---------- 
 
(U)  More than 30,000 houses have been misappropriated by former 
GDRC officials countrywide, says a report by the Ministry of the 
Environment.  Most of the houses are in Kinshasa (3/4) but many are 
also in Katanga, Bas Congo and Sud Kivu.  Current "owners" have 
illegal certificates of registration to support their ownership. 
(OMUHONGYA) 
 
Environment 
----------- 
 
(U)  The Governors of Equateur, Bandundu, and Kasai Occidental 
provinces have met to set up strategies aimed at reducing an 
alarming increase in poaching activities in Salonga Park.  The park 
is located in the middle of the DRC and is home to endangered 
species, including the Bonobo Chimpanzee found only in the DRC.   It 
is one of the oldest parks in the country but is becoming the scene 
 
KINSHASA 00000413  004 OF 008 
 
 
of increased poaching as people move to nearby areas and as the 
local economy, especially agricultural production, 
worsens.(OMUHONGYA) 
 
(U)  The DRC National Water Company (REGIDESO) has filed protests 
against two companies for dumping organic and minerals pollutants 
into the Lukunga River in Bas Congo and Kinshasa.  REGIDESO claims 
that this pollution is raising the cost of water treatment of the 
Lukunga River water.  Minister of Environment Jose Endundo has 
demanded that both enterprises stop polluting the water and has 
provided a schedule to follow. The World Bank, meanwhile, has made 
future REGIDESO funding contingent upon improvement of the Lukunga 
River water quality. (OMUHONGYA) 
 
Governance 
----------- 
 
(U)  The Congolese Association for Consumers' Rights (ADCC) urged 
the GDRC to pay subsidies in order to reduce prices of petrol, 
cement, sugar, cassava flour and rice. According to the ADCC 
president, the prices of these basic items have risen precipitously 
lately and must be dealt with. (OMUHONGYA) 
 
(U)  DRC security forces seized 300 to 600 tons of copper and cobalt 
ore illegally mined near Shinkolobwe, a uranium site shut down since 
¶1960. Officially, uranium mining is banned by the GDRC, but checks 
of copper cargoes occasionally reveal high levels of radioactivity. 
It's said that lack of pay and poor working conditions for the 
guards at Shikolobwe encourages them to participate in smuggling. 
(OMUHONGYA) 
 
(U)  The Ministry of Plan has released the results of the 2008 Paris 
Statement survey The DRC Poverty Reduction Strategy Paper (PRSP) has 
been approved by the World Bank and IMF. Its implementation, 
however, is still a challenge because of the lack of sectorial 
policies; lack of a reliable system of evaluation and follow up; 
lack of statistics; and the risk of an uncontrolled 
decentralization. (OMUHONGYA) 
 
Health 
------ 
 
(U)  According to officials in Mbandaka, there have been 42 cases of 
monkeypox, which have resulted in two deaths.  Mbandaka health zone 
officials and a team from the World Health Organization are on the 
ground accessing the problem. 
 
(U)  On April 7th the Ministry of Health sponsored a five-day 
workshop to review the 2007 Public Health Report, to address the 
state of public health in DRC, and to identify challenges and make 
recommendations for the 2009 health budget.  The workshop was also 
used as a tool to help prepare for decentralization of DRC's health 
sector.  (The 2006 Strategy for the Reinforcement of the Health 
System (SRSS) is integrated into the DRC Poverty Reduction Strategy 
document.)  The current health infrastructure is in a state of decay 
and diseases that were once controlled are now resurging.  The 
system also lacks services for victims of sexual violence. 
(DMMORTON) 
 
(U)  The Minister of Media and Communication has decided to ban 
advertisements related to pharmaceutical products made by 
traditional healers. Traditional healers are said to pose a public 
danger since they do not control dosages of their products. 
(OMUHONGYA) 
 
Infrastructure 
-------------- 
 
(U)  Major infrastructure projects have been launched by the 
Ministry of Infrastructure. Road, railway, hospital and school 
construction is being planned for the next three years. The total 
amount, including all stakeholders, is around USD 9 billion, with an 
initial tranche of USD 700 million. Of this, USD 350 million is 
already available. Work on the road between Kasumbalesa (on the 
border with Zambia) and Lubumbashi has already started. Kinshasa 
will benefit from 250 km (ca. 150 miles) of new city roads, 1,000 
houses and a new hospital.(Note: much of this construction is 
predicated on the USD 9 billion from the Chinese in return for 
mineral resources.  End note.)  (septel)  (OMUHONGYA) 
 
(U)  The Managing Director of the Organization for Equipping Banana 
- Kinshasa (OEBK) announced that the creation of the deep water 
Banana port would be funded by OEBK, with participation of the GDRC. 
(OMUHONGYA) 
 
Labor 
 
KINSHASA 00000413  005 OF 008 
 
 
----- 
 
(U)  Doctors in North Kivu, both public and private sector, went on 
strike for 48 hours recently by providing only emergency services. 
They are asking for a "risk bonus" and two months of unpaid salary 
arrears. (OMUHONGYA) 
 
(U)  The Congolese Chamber of Commerce (FEC) is against the minimum 
wage of USD 3 per day suggested by the Minister of Social Affairs. 
USD 3/day would make the lowest monthly salary USD 147 (including 
bonuses and benefits) and a high-end salary USD 1000. Operational 
costs would be three times higher and unaffordable for many 
companies, especially the public enterprises that are undergoing 
reforms. The FEC suggests a minimum salary of USD 2.5 a day to be 
implemented in two phases: July 2008 and then January 2009. FEC says 
that some companies would otherwise be forced to close and the 
informal sector would continue to grow. (OMUHONGYA) 
 
Microfinance 
------------ 
 
(U)  The Ministry of Small and Medium Enterprises held a national 
workshop to reflect on practical ways of supporting the DRC's 
national strategy on micro-finance. The UNDP's Financial Director 
said he expects a clear definition of priorities for the 
implementation of the existing national strategy. (OMUHONGYA) 
 
Mining 
------ 
 
(U)  A total of 218 metric tons of coltan has been extracted from 
Kisengo according to the DRC mining services of Tanganyika district, 
northern Katanga Province. This stock has been exported through the 
towns of Goma and Bukavu in the Kivu provinces. Coltan, once one of 
the leading money-earners in eastern Congo, has recently been mined 
much less due to lower world prices and adverse publicity associated 
with the armed forces and artisanal workers who were producing it in 
the past. (OMUHONGYA) 
 
(U)  The German Ambassador to the DRC says that the German 
Government will support the process of ore certification and tracing 
in the country. The objective would be to facilitate the 
commercialization of Congolese ore according to the DRC mining code 
and international standards. In addition, the German Technical 
Cooperation (GTZ) will increase its assistance to the Extractive 
Industry Transparency Initiative (EITI) in the DRC. (OMUHONGYA) 
 
(U)  The Congolese diamond mining parastatal, MIBA, will begin 
selling its own production on the open market. Previously, much of 
MIBA's much-reduced production was going directly to private joint 
venture partners, who were free to market the diamonds through their 
own channels.  It is hoped that this development will bring some 
transparency to an industry that has been somewhat secretive, 
despite the DRC's certification by the Kimberley Process. 
(OMUHONGYA) 
 
(U)  Discussion is ongoing between Freeport McMoRan and the GDRC 
through the "cooperative" mining review process. The GDRC is asking 
to raise its shares of Tenke Fungurume Mining from 17.5 percent to 
45 percent. Freeport has stated that the GDRC share was negotiated 
fairly and legally. (OMUHONGYA) 
 
(U)  It is estimated that the DRC and Zambia together will 
eventually furnish 10 percent of world copper supplies, about 2 
million metric tons annually. Political problems, power and sulfuric 
acid shortages, and transport/infrastructure difficulties could 
impede the normal development of current projects. Some copper belt 
officials feel that only public private partnerships may solve some 
of these challenges. (OMUHONGYA) 
 
Multilateral Cooperation 
------------------------ 
 
(U)  The Congolese delegation to the spring World Bank (WB) meetings 
in Washington returned to the DRC with the possibility of a new 
formal International Monetary Fund (IMF) program, contingent upon an 
improvement of GDRC management of public finance. Despite a March 
monthly surplus of FC 29 billion (almost USD 60 million), the IMF 
still wants to see strict respect of the expenditure chain and the 
achievement of on-going reforms within the Central Bank. 
(OMUHONGYA) 
 
(U)  Mme El Bakri, Deputy President of the African Development Bank 
(AfDB) announced a USD 150 million grant to the DRC to support 
activities designed to reduce hunger and malnutrition.  (OMUHONGYA) 
 
 
KINSHASA 00000413  006 OF 008 
 
 
(U)  The WB has granted USD 50 million to support GDRC efforts to 
improve transparency and efficiency in central and provincial public 
finance and human resource management and to establish/consolidate 
an equitable sharing mechanism between the central and provincial 
governments. (OMUHONGYA) 
 
(U)  The WB has approved a total USD 160 million International 
Development Association grant to finance three projects in the DRC 
designed to support the "Governance Compact" adopted by the GDRC. 
The compact will help to lay the foundation for sustained growth and 
progress towards the Millennium Development Goals. (Note: The DRC is 
a Millennium Challenge Corporation "eligible" country, not yet a 
"candidate" country.  End note.) (OMUHONGYA) 
 
(U)  The WB has approved an IDA grant of USD 60 million that aims to 
increase the competitiveness of the Congolese economy, thereby 
contributing to economic growth through the improvement of the 
investment climate and support of public enterprise reforms in the 
DRC. (OMUHONGYA) 
 
(U)  Minister of Plan Olivier Kamitatu signed a United Nations 
Stabilization Strategy for USD 23 million. The main objective of 
this fund, provided by the Netherlands, is to improve security in 
eastern Congo. While enhancing peace in the Kivus, Orientale 
Province and northern Katanga Province, this strategy will 
reportedly attempt to promote local economies. (OMUHONGYA) 
 
(U)  GDRC Ministers met with DRC development partners to evaluate 
the management of their donations. Representatives from Belgium, 
France, European Union, UNDP, AfDB, IMF and the World Bank were 
present. Additional pledges of USD 4 million were made at this 
meeting. The partners agreed to conduct such evaluations more 
frequently. (OMUHONGYA) 
 
(U)  It has been reported that some International NGOs are shutting 
down activities in South Kivu because of rising insecurity. The 
local population feels doubly abandoned because they are victims of 
exactions by armed groups and now are experiencing disruption of 
outside assistance. (OMUHONGYA) 
 
(U)  The African Development Bank (AfDB) has loaned USD 58 million 
to the DRC to help rehabilitate 10 out of 14 Inga hydroelectric 
complex turbines and the construction of a high voltage transmission 
line from Inga to Kinshasa. This project will extend the Kinshasa 
and Bas Congo electricity network and will allow DRC to export 
electricity to other African countries. The World Bank is also a 
stakeholder in this project. (OMUHONGYA) 
 
(U)  The Governor of the Congolese Central Bank (BCC), Jean-Claude 
Masangu, participated in the 79th meeting of the G-24 countries in 
Washington, DC. Issues included the worldwide financial and economic 
situation, the reform of Bretton Woods institutions, climate change 
and development, and funding for development. The group urged the 
World Bank to increase its political and financial support and the 
IMF to alleviate balance of payment needs. The participants shared a 
common view of climate change risks. (OMUHONGYA) 
 
Private Enterprises 
------------------- 
 
(U)  British company Sneider Oil (SOCO) has launched activities in 
the Bas Congo Province at Kipholo Mvumbi, three kilometers from the 
Angolan border. SOCO plans to hire 700 local employees. (OMUHONGYA) 
 
Public Enterprises 
------------------ 
 
(U)  A dispute has arisen between Minister of Petroleum Mende and 
Minister of Portfolio Mabunda regarding the use of COHYDRO dividends 
for the rehabilitation of the road from Muanda to Boma in the Bas 
Congo Province. Minister Mabunda says her decision to force COHYDRO 
to fund this project is in accordance with GDRC guidelines, while 
Mende argues that COHYDRO needs this money for its own purposes. 
COHYDRO employees, who are demanding payment of USD 450,000 in back 
wages, are also upset with Mabunda's decision. (OMUHONGYA). 
 
(U)  Congolese National Petroleum Company (COHYDRO) and Surestream 
Company have reportedly given USD 600,000 to the population living 
around their facility for petroleum production near Muanda, Bas 
Congo Province. This fund is supposed to be used for education, 
health, microfinance and agriculture projects. (OMUHONGYA). 
 
(U)  Kisangani recently welcomed Congo Oil Company, a mixed capital 
business, after many years without new formal sector enterprises. 
Congo Oil aims to provide all of Orientale Province with petroleum 
products. This will be only the third company to provide new 
 
KINSHASA 00000413  007 OF 008 
 
 
employment in this formerly war-torn province, along with Congo Fina 
and Datco. (OMUHONGYA) 
 
(U)  The Congolese national cement plant (CINAT) has temporarily 
suspended production in order to perform maintenance on machines and 
wait for the arrival of raw materials especially paper used for 
sacks. CINAT has not been able to satisfy local demand for cement 
and hence the price has gone from USD 15/sack to USD 22/sack, 
despite GDRC efforts to fix an official price of USD 13/sack. 
(Note: Ongoing problems at the DRC port of Matadi may be the reason 
for lack of paper, but the chief financial officer of CINAT was 
recently arrested and charged with embezzling as much as USD one 
million.  End note.) (OMUHONGYA) 
 
(U)  In an effort to increase revenue, the Congolese National 
Insurance Company (SONAS) has launched a new car insurance 
certificate. Those with current policies will receive new 
certificates, while stricter controls and the use of the "Denver 
Boot" to discourage offenders will begin on May 15. (OMUHONGYA) 
 
(U)  Rail traffic has resumed between Ubundu (Orientale Province) 
and Kindu (Maniema Province). 300 tons of goods were transported 
from Kisangani to Kindu. The breakdown of a locomotive had caused a 
three-month interruption of service. Kisangani and Kindu are located 
far from international borders, on the Congo River, but now rely 
heavily on rail traffic. (OMUHONGYA) 
 
(U)  The Congolese river transport parastatal (ONATRA) raised 
revenues of FC 68 million (about USD 130,000) in February, up from 
FC 55 million (about USD 110,000) in January. This increase is 
likely due to the increase in travelers and transportation of goods. 
ONATRA is attempting to combat smuggling and the use of illegal 
private ports, both of which cause losses to the GDRC treasury. 
(OMUHONGYA) 
 
(U) Minister of Portfolio Jeannine Mabunda met with the managers of 
DRC public enterprises for a first evaluation. Technical forms have 
been distributed to managers to get at key information about 
finances. A corruption hotline has been created so that the public 
can denounce mismanagement. The minister says that corruption 
charges will be brought against anyone found to be engaged in 
illegal activity. (OMUHONGYA) 
 
(U)  International Business Machines (IBM), which closed its DRC 
operation in 1980, announced possibly reopening in the DRC. 
IBM/France is still recognized as the source of most computer 
technology in the DRC. (OMUHONGYA) 
 
Public Finance 
-------------- 
 
(U)  In an effort to attract investors, the Pilot Committee for the 
Reform of Public Enterprises (COPIREP) has launched a study aimed at 
determining ways of reducing the tax burden. This process could 
hopefully result in a larger, more stable revenue flow, while 
simplifying and streamlining the tax collection system for 
businesses. (OMUHONGYA) 
 
(U)  The three largest telecommunication companies in the DRC 
(Vodacom, Celtel and Tigo) claim to account for as much as 30 
percent of the DRC budget revenues. Figures just released for 2007 
indicate that these companies paid USD 4 million in taxes on profits 
of USD 36.8 million for the year. According to industry 
spokespersons, despite this large contribution to the budget, the 
companies are still subject to GDRC harassment.  (OMUHONGYA) 
 
(U)  UNDP experts say that the constitutional principle of returning 
40 percent of provincial revenues to the provinces will be difficult 
in practice because it is sometimes difficult to determine the 
source of taxes. The experts reportedly suggest a reconsideration of 
the terms of this constitutional principle. (OMUHONGYA) 
 
(U)  The "guichet unique" (one stop window for customs clearance) 
system has finally been installed in Kasumbalesa, on the DRC-Zambia 
border south of Lubumbashi. (Note: this system was supposed to be in 
place originally by the end of 2006, and follows similar 
installations at N'djili Airport in Kinshasa and Ngobila Beach, the 
ferry crossing between Kinshasa and Brazzaville.  End note.)  The 
Congolese customs service hopes to increase its revenues with faster 
services to economic operators. (OMUHONGYA) 
 
(U)  A financial audit commissioned by the Provincial Assembly of 
Kinshasa accuses the speaker of the misappropriation of FC 
397,822,720 (over USD 700,000). This amount still cannot be 
accounted for by the Bureau of the Provincial Assembly. (OMUHONGYA) 
 
 
KINSHASA 00000413  008 OF 008 
 
 
 
(U)  A partnership was signed January 30 between expatriate customs 
inspection company BIVAC, the Congolese office of Control (OCC), and 
the Congolese Customs and Duties Agency (OFIDA) to maximize state 
revenues.  The Ministry of Portfolio has set up a Commission to 
evaluate this new system.  The Commission is primarily looking at 
ways to further enhance revenue.  Recently, the GDRC reduced the 
cost of OCC services from 3 percent to 1.5 percent of the value of 
the goods inspected.  (OMUHONGYA) 
 
(U)  A reported budget surplus of FC 29 billion (about USD 50,000) 
has had no effect on the current inflationary trend. Growing 
pressures to increase civil service wages - such as the minimum wage 
of USD 3/day suggested by the Ministry of Social Affairs - along 
with rising fuel costs pose a serious inflationary risk. These 
pressures could be lessened by expected seasonal increases of 
domestic food production. (OMUHONGYA) 
 
(U)  The launching of major infrastructural works may modify the 
configuration of the 2008 DRC Budget. According to the Minister of 
Plan, Chinese contributions from the announced USD 9 billion loan, 
as well as large South African and Indian disbursements could total 
in the hundreds of millions of dollars. (OMUHONGYA) 
 
Monthly Inflation and Exchange Rates 
------------------------------------ 
 
(U) The Inflation rate was 3.7 percent in April. The year-to-date 
inflation rate stands at 14 percent. Inflation is likely due to a 4 
percent increase in the cost of gasoline in western DRC. 
 
(U) Compared to the end of March, the Congolese Franc officially 
decreased by 0.54 percent 
 
      2/29/2008  3/28/2008  4/29/2008 
 
BCC   548   557   560 
 
Parallel market 
 
Kinshasa  570   570   570 
 
Lubumbashi 560   570   570 
 
Mbujimayi  570   570   580 
 
Kisangani  560   560   570 
 
Goma   570   570   580 
 
Bukavu  560   570   580 
 
 
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