Civil Society Highlights $132 Million Loss for DRC in China Agreement

Civil society organizations in the DRC indicate a $132 million shortfall related to a 2008 infrastructure agreement with China, exacerbated by extensive tax exemptions. A report warns of potential losses totaling $7.5 billion over 17 years due to these fiscal privileges. Advocates argue the need for accountability in managing such agreements outside the Congolese Mining Code’s framework.

Civil society organizations in the Democratic Republic of Congo (DRC) have expressed significant concern regarding financial losses linked to the 2008 infrastructure-for-minerals agreement with a Chinese consortium. A report issued by the watchdog group Congo is Not for Sale (CNPV) on March 5, 2025, highlighted a notable shortfall of $132 million in 2024, which persisted despite attempts to renegotiate the contract last year, according to local media outlet Actualite CD.

The report indicates that excessive tax exemptions granted to Chinese firms have severely undermined the DRC’s potential financial benefits from this agreement. Furthermore, the watchdog criticized the contract’s exclusion from the Congolese Mining Code, which has enabled Chinese companies to enjoy unchecked fiscal privileges. In 2023, the DRC reportedly lost approximately $443 million attributable to tax and parafiscal exemptions, representing 16% of the country’s overall tax expenditures.

During the report’s presentation, CNPV member Baby Matabishi cautioned that if these exemptions remain unchallenged, the DRC could incur a staggering loss of up to $7.5 billion over the next 17 years. These projected losses are linked to Law No. 14/005, which allows extensive tax, customs, and parafiscal exemptions for collaboration agreements, including the Sino-Congolese contract.

Matabishi remarked, “This contract has remained structurally imbalanced since its inception,” emphasizing the detriments of the sweeping exemptions and the contract’s management outside traditional government oversight. Although the agreement was established in 2008, the Congolese government has rationalized these exemptions as essential for servicing loans related to infrastructure and mining development projects. Despite the 2018 introduction of a new Mining Code, the contract continues to operate independently, outside the established regulatory framework.

The financial implications of the Sino-Congolese infrastructure-for-minerals agreement remain critical, with a $132 million loss reported in 2024 and potential long-term losses projected at $7.5 billion. Civil society groups such as CNPV are advocating for transparency and accountability in the management of contracts to secure the DRC’s financial interests. The ongoing tax exemptions granted to Chinese companies present significant challenges to the DRC’s economic stability and merit immediate re-evaluation.

Original Source: globalsouthworld.com