Civil society organizations in the DRC warn of a $132 million loss in 2024 due to a 2008 agreement with a Chinese consortium. The report from Congo is Not for Sale (CNPV) indicates extensive tax exemptions have resulted in significant financial deficits, including a projected loss of $7.5 billion over 17 years. There is a call for a reevaluation of the agreement to align it with the Congolese Mining Code.
Civil society organizations in the Democratic Republic of Congo (DRC) have voiced serious concerns regarding significant financial losses stemming from the 2008 infrastructure-for-minerals agreement with a Chinese consortium. A report from the watchdog group Congo is Not for Sale (CNPV), released on March 5, 2025, reveals that the DRC anticipates a shortfall of $132 million in 2024. This loss persists despite attempts to renegotiate the contract in the previous year, as reported by local media, Actualite CD.
The CNPV report identifies the extensive tax exemptions awarded to Chinese companies as a key factor undermining the DRC’s potential financial benefits from the agreement. Furthermore, the report highlights the exclusion of this deal from the Congolese Mining Code, which enables disproportionate fiscal advantages without proper oversight. In 2023, the DRC reportedly lost an estimated $443 million due to various exemptions, representing approximately 16% of the country’s total tax expenditures.
CNPV member Baby Matabishi stressed the gravity of the situation, warning that continued exemptions could result in a staggering $7.5 billion loss over the next 17 years. The losses are attributed to Law No. 14/005, which permits extensive tax, customs, and parafiscal exemptions for collaborative projects, including the Sino-Congolese contract. Matabishi remarked, “This contract has remained structurally imbalanced since its inception.”
He further elaborated that, “For years, we have warned about the problematic nature of these sweeping exemptions and the contract’s management outside of traditional government institutions.” The original agreement was established in 2008 without a solid legal framework, with the Congolese government justifying these exemptions as crucial for settling loans used in infrastructure development and mining operations. Remarkably, even after the introduction of a new Mining Code in 2018, the agreement continues to function outside of its regulatory scope, preserving its distinct tax structure.
In conclusion, the findings by civil society organizations in the DRC highlight significant financial ramifications resulting from the controversial infrastructure-for-minerals agreement with China. With an alarming projected loss of $132 million in 2024 and a potential total of $7.5 billion over 17 years due to generous tax exemptions, there is an urgent need for a reevaluation of the contract. The report underlines the importance of integrating this agreement within the Congolese Mining Code to ensure proper oversight and equitable financial returns for the DRC.
Original Source: globalsouthworld.com
