KINSHASA, (Reuters) – Canada delayed an $8 billion debt relief deal for Democratic Republic of Congo in a dispute over mining rights, depriving the African nation of a chance to mark the 50th anniversary of its independence yesterday with the accord.
Congolese President Joseph Kabila had pushed for the relief to be finalised in time for the celebration to show the world his country was putting its painful past behind it, following the war of 1998-2003 in which some five million people died.
But a World Bank decision on the debt was postponed slightly at Canada’s request due to a legal dispute that exploded last year between Vancouver-based First Quantum Minerals <FM.TO> and the Kinshasa government over mining rights, officials said.
“Canada did it due to ongoing concerns related to governance, rule of law, and preoccupations about what these realities mean for sustainability of the debt relief programme,” said a Canadian official who requested anonymity.
The accord, which could have slashed Congo’s annual debt service burden to $194 million from $920 million, was meant to be a high point of events to be attended by U.N. Secretary-General Ban Ki-moon and Albert II, king of ex-colonial power Belgium.
A spokesman for Canadian Finance Minister Jim Flaherty cited concern about the cancellation of mining contracts after a review of the sector by Kinshasa and noted that Canada had slowed the debt relief process last year to raise such concerns.
“We will continue to work with our international partners to ensure Canadian investment in the DRC is protected, while empowering those within the country as they work towards peace and sustainable economic development,” the spokesman said.
The World Bank’s sister organisation, the International Monetary Fund, approved the debt relief for Congo yesterday, an IMF board official said.
Both bodies must approve the deal and a World Bank official said the board would discuss it today. A U.S. official said Washington was supporting debt relief for Congo.