The state auditor in Congo has demanded an additional $17 billion of investments from a 2008 deal with Chinese investors, which is currently under negotiation. The deal in question involves Sinohydro Corp and China Railway Group, who agreed to build roads and hospitals in exchange for a 68% stake in Sicomines, a joint venture with Congo’s state mining company Gecamines.
President Felix Tshisekedi’s government has been reviewing the agreement, which was initially made with his predecessor Joseph Kabila. Under the agreement, Chinese investors committed to spending $3 billion on infrastructure projects. However, the state auditor, Inspection Generale des Finances (IGF), has demanded that this commitment be increased to $20 billion to reflect the value of the mining concessions that Gecamines contributed to the deal.
Sicomines, responding to the report, challenged the “competence” of the auditor and said that the contents of the report were unjustified. The company also said that the criticism and measures taken against them were affecting the functioning of the company and jeopardising the interests of the country and the Congolese people.
The Chinese embassy in Congo said that it was shocked by the state auditor’s report, calling it “full of prejudice” and not corresponding to reality. The embassy did not specifically address the IGF’s criticisms and demands. However, they stated that the deal was “a great example of win-win partnership,” using a catchphrase of Tshisekedi’s when he talks about Congo’s ventures with other countries.
The IGF report demanded an “immediate” $1 billion investment from Sicomines and also called for a commitment to 50% of the workforce on infrastructure projects being Congolese. The auditor also called for the renegotiation of the Convention to adjust and balance the duties and benefits of both parties and bring them into line with the value of their respective contributions.
Furthermore, the IGF demanded that Gecamines be given a bigger stake in Sicomines, which currently has a 32% holding. So far, Sicomines has only spent $822 million on infrastructure investments, according to the IGF report.
Congo’s finance minister Nicolas Kazadi told Reuters last month that the government expected to reach an agreement on the Sicomines deal this year. However, there has been no update since then.
Congo suspended a tax break on Sicomines in September, exonerating the firm from paying import taxes, which is still active, according to two officials. The demand from the IGF adds to the scrutiny on Chinese investments in Congo, which has been a source of controversy. Congo has some of the world’s largest copper and cobalt deposits and is a key source of these minerals for China.
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