DR Congo Faces $132 Million Loss from Chinese Infrastructure Deal

Civil society organizations in the DRC are warning about a projected loss of $132 million stemming from a 2008 deal with a Chinese consortium. The watchdog group CNPV attributes these losses to extensive tax exemptions that disregard existing regulations. If unaddressed, these exemptions could lead to a total loss of $7.5 billion over the next 17 years, necessitating urgent action to protect the DRC’s economic interests.

Civil society organizations in the Democratic Republic of Congo (DRC) have expressed significant concerns regarding financial losses stemming from a 2008 infrastructure-for-minerals arrangement with a Chinese consortium. A report released on March 5, 2025, by the watchdog group Congo is Not for Sale (CNPV) indicated a projected shortfall of $132 million in 2024, despite attempts to renegotiate the contract last year, as reported by local media outlet Actualite CD.

The report identifies the extensive tax exemptions afforded to Chinese companies as a major factor undermining the DRC’s financial benefits from the agreement. Additionally, it criticizes the agreement’s exclusion from the Congolese Mining Code, which permits these fiscal privileges without sufficient accountability. In 2023 alone, the DRC reportedly lost about $443 million in tax and parafiscal exemptions, representing 16% of the nation’s total tax expenditures.

At the report’s presentation, CNPV member Baby Matabishi cautioned that, if these exemptions persist, the DRC risks incurring losses of up to $7.5 billion over the next 17 years. These potential losses stem from Law No. 14/005, which allows considerable tax, customs, and parafiscal exemptions for collaborative agreements, including the Sino-Congolese contract. Matabishi remarked that, “This contract has remained structurally imbalanced since its inception” and reiterated concerns about the management of these exemptions outside regular government oversight.

Although the agreement was established in 2008, it lacked a solid legal foundation, with the Congolese government justifying these exemptions as essential for repaying loans for infrastructure and mining project development. Despite a new Mining Code being introduced in 2018, the contract continues to function outside this framework, perpetuating its unique tax structure.

In conclusion, the Democratic Republic of Congo is facing substantial financial repercussions due to the infrastructure-for-minerals agreement with a Chinese consortium. Civil society organizations are raising alarm over tax exemptions that have severely diluted potential gains, projecting ongoing losses without reform. With calls for renegotiation and greater accountability, the need for regulatory adjustment is evident to safeguard the DRC’s financial interests moving forward.

Original Source: globalsouthworld.com