Civil society organizations in the DRC report a potential $132 million loss due to a 2008 minerals-for-infrastructure deal with a Chinese consortium. The CNPV’s findings indicate significant tax exemptions for Chinese companies, leading to an estimated $443 million loss in 2023. Experts warn that without changes, the DRC could forfeit $7.5 billion over the next 17 years, raising concerns about fiscal oversight and governance.
Civil society organizations in the Democratic Republic of Congo (DRC) have expressed alarm over a potential financial loss of $132 million due to a 2008 minerals-for-infrastructure deal with a Chinese consortium. A report by the watchdog group Congo is Not for Sale (CNPV), released on March 5, 2025, emphasized this shortfall amid ongoing efforts to renegotiate the contract. Media sources such as Actualite CD have reported these findings, underscoring the significant financial implications for the DRC.
The CNPV report highlighted that extensive tax exemptions granted to Chinese companies significantly undermined the DRC’s financial interests derived from this agreement. Additionally, the report criticized the exclusion of the contract from the Congolese Mining Code, which permits extensive fiscal privileges without governmental oversight. In 2023, the DRC reportedly experienced a loss of about $443 million due to such exemptions, constituting 16% of the country’s total tax expenditures.
At the report’s presentation, CNPV member Baby Matabishi cautioned that if these exemptions persist, the DRC could overlook losses reaching up to $7.5 billion over the next 17 years. These potential losses arise from Law No. 14/005, which grants extensive tax, customs, and parafiscal exemptions to agreements such as the Sino-Congolese contract. Matabishi expressed concern, stating, “This contract has remained structurally imbalanced since its inception.” He further indicated, “For years, we have warned about the problematic nature of these sweeping exemptions and the contract’s management outside of traditional government institutions.”
Despite the contract being signed in 2008 amidst dubious legal standing, the Congolese government has maintained this arrangement, justifying the tax exemptions as essential for the repayment of loans aimed at funding infrastructure and mining operations. Even following the introduction of a new Mining Code in 2018, the agreement persists outside its regulatory framework, retaining its unique tax structure, which raises questions regarding governance and fiscal responsibility.
In conclusion, the financial losses reported by civil society organizations regarding the infrastructure-for-minerals agreement between the DRC and a Chinese consortium highlight serious concerns about fiscal management and governance within the country. The extensive tax exemptions granted to Chinese companies, coupled with the agreement’s exclusion from the Congolese Mining Code, suggest an urgent need for the DRC government to re-evaluate its approach to international contracts to safeguard national financial interests.
Original Source: globalsouthworld.com
