VZCZCXRO2179
RR RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMR RUEHRN
DE RUEHKI #0254/01 0551524
ZNR UUUUU ZZH
R 241523Z FEB 10
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 0277
INFO RWANDA COLLECTIVE
SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RHEFDHP/DIA DHP-1 WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS SECTION 01 OF 03 KINSHASA 000254 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EAID PGOV PREL
SUBJECT: Prime Minister Assures Donors of Progress and Commitment 
Towards HIPC Completion Point 
 
REF: 09KINSHASA1135; 09KINSHASA1112 
 
¶1.  (SBU) Summary:  Prime Minister Adolphe Muzito, accompanied by a 
team of key ministers, assured bilateral and multilateral donors on 
February 23 of the government of the DRC (GDRC)'s political 
commitment to and progress towards meeting the triggers required to 
reach Heavily Indebted Poor Countries (HIPC) Initiative completion 
point by June 2010.  Muzito thanked donors for providing financing 
assurances and support for the DRC's new IMF Poverty Reduction and 
Growth Facility (PRGF), approved in December 2009 (refs A and B), 
and acknowledged that the task ahead was both difficult and time 
was short.  Minister of Plan Kamitatu outlined government actions 
and progress in each of the seven HIPC completion point triggers, 
frequently noting work underway.  Donor interventions highlighted 
support for the GDRC's efforts to date, while acknowledging steps 
that remain.  A key outstanding concern for donors is the passage 
of the new procurement law, anticipated for March when Parliament 
resumes its next session. End Summary. 
 
 
 
¶2.  (U) Prime Minister Muzito was accompanied by the key ministers 
engaged in the work on the seven HIPC completion point triggers, 
including the Minister of Plan, the (newly named) Ministers of 
Finance and Budget, and several line Ministers.  Bilateral donor 
representatives included the Ambassadors of Spain (representing the 
EU Presidency), the EU, Switzerland, Japan, Canada and the United 
States.  Multilateral donor representatives included the IMF 
Resident Representative and the World Bank Country Director. 
 
 
 
Plan Minister Highlights Progress on Seven Triggers 
 
--------------------------------------------- ------ 
 
 
 
¶3.  (SBU) Following very brief introductory remarks to thank donors 
for their support and acknowledge both the progress to date and 
task ahead on the HIPC completion point triggers, Muzito turned to 
his Minister of Plan for a detailed progress report on each of the 
seven triggers.  While presenting  a highly positive report on 
progress to date and current efforts, he did acknowledge that each 
reform required both capacity and resources.  In particular, he 
noted the need for capacity building related to the sectoral 
strategies (trigger 6).  These include: 
 
 
 
Trigger 1-PRSP (Poverty Reduction Strategy Paper).  The GDRC is 
completing its first draft of the progress revenue of PRSP 
performance for 2008-2009; sectoral revenues and data collection 
are currently underway.  A stakeholders meeting will be held to 
discuss PRSP implementation on March 8 and 9.  The PRSP revenue 
document is on track for finalization by the end of March. 
 
 
 
Trigger 2- Macroeconomic stability.  Macroeconomic policy is being 
implemented in line with the DRC's PRGF.  Relevant GDRC ministries 
are currently compiling data to be reviewed during the upcoming IMF 
Staff Mission in early March; the GDRC is committed to ensuring a 
productive mission. 
 
 
 
Trigger 3- Use of Budgetary Savings.  Terms of Reference have been 
defined for and work is underway by an independent, international 
firm to conduct an audit of the national audit office and use of 
budgetary resources. 
 
 
 
Trigger 4- Public expenditure management.  The expenditures 
tracking system (chaine de depenses, in French) is fully 
operational; the GDRC is currently revising its procedural manual 
to address any weaknesses.  The GDRC is currently producing and 
reviewing the required budget execution reports. 
 
KINSHASA 00000254  002 OF 003 
 
 
Trigger 5- Governance and service delivery in key sectors. The GDRC 
is working in two principal areas: quality of services and quality 
of spending.  An evaluation of services is currently being drafted 
with international assistance in three provinces.  The new public 
procurement law (marche publique, in French) was passed by the 
National Assembly before the close of the Parliament's 
extraordinary session ending in mid-February, and has been referred 
to the Senate.  The Senate will review the procurement law as a 
priority item when Parliament reconvenes on March 15. The GDRC is 
working on drafting implementing regulations to ensure that the law 
can be enacted as quickly as possible following Parliamentary 
approval by the Parliament and the President's signature. 
 
 
 
Trigger 6- Social and rural sectors.  The GDRC has drafted 
strategies for the three priority sectors-health, education, and 
agricultural/rural development.  The strategies will be finalized 
and transmitted to the Council of Ministers by the end of 
March/early April. 
 
 
 
Trigger 7- Debt management.  Debt service information for the 
fourth quarter of 2009 is currently being drafted and will be 
completed shortly. 
 
 
 
 
 
IMF Reviews upcoming Staff Mission 
 
---------------------------------- 
 
 
 
¶4.  (SBU) The IMF Resident Representative noted that satisfactory 
performance under the PRGF is one of the triggers for HIPC 
completion point. The upcoming IMF Staff Mission, arriving the 
first week of March, which will review progress under the PRGF, 
both on macroeconomic stability and implementation of structural 
reforms through December 2009.  While reserving specific comments 
given the upcoming mission, the IMF Res Rep gave a generally 
positive assessment of developments including improved 
macroeconomic stability, appropriate policies, and realistic 
spending in line with revenues. 
 
 
 
 
 
Donors highlight support and need to maintain momentum 
 
--------------------------------------------- ---------- 
 
 
 
¶5.  (SBU) All participating bilateral ambassadors made brief 
statements.  The overall message from the donors was one of strong 
support for the efforts undertaken to date on the HIPC triggers and 
the need to maintain the current policies and commitment.  Donors 
offered support to assist the GDRC continue its work.  While the 
message was generally positive, concerns were noted over the 
limited time left to finalize and undertake remaining actions 
before June 2010.  Several donors also highlighted the adoption and 
implementation of the new procurement law as a key action that must 
still be completed.  The World Bank Country Director seconded 
bilateral donor comments on the importance of the procurement law 
and also noted the importance of resolution of London Club arrears. 
The World Bank has technical assistance to assist the GDRC in this 
area. 
 
 
 
¶6. (SBU) Comment:  Coming just days following the naming of a new 
cabinet, including new ministers of budget and finance, the GDRC's 
review of the HIPC triggers was a timely opportunity for the Prime 
Minister to reassure donors of continued political commitment, 
policies and progress toward the GDRC's goal of HIPC completion 
point by June 2010, the DRC's fiftieth anniversary of independence. 
 
KINSHASA 00000254  003 OF 003 
 
 
The donor community presented a common message that recognized the 
important progress made to date, the key work that remained 
(including the adoption of the procurement law), and the support 
from the international community to help the GDRC in its efforts. 
The IMF Staff Mission arriving in early March will help to provide 
additional details on the GDRC's progress on the triggers, 
particularly in the areas of macroeconomic stability and public 
financial management.  As noted by several donors and acknowledged 
by the Prime Minister, there is still much work to be done in a 
very short time. There are reasons to be encouraged by the progress 
to date, but we must also ensure that the GDRC at the highest 
levels does not lose the momentum.  End comment. 
GARVELINK