World Bank suspends Sh137.3bn worth of project funding in DRC
Wednesday May 17 2023
The World Bank has suspended funding for humanitarian and development projects in the Democratic Republic of Congo worth more than Sh137.3 billion ($1 billion) after the government dissolved the project fund without warning, the lender said.
The suspension will affect more than 600,000 beneficiaries, including victims of sexual violence, the World Bank told Congo’s finance minister last week in a letter seen by Reuters. A World Bank spokesperson confirmed its authenticity.
The letter also said that the bank was still waiting for documentation on the status of Sh12.49 billion ($91 million) which had already been advanced for the projects out of the total of Sh137.3 billion ($1.04 billion).
On May 4, Congolese President Felix Tshisekedi dissolved the structure, the “Social Fund of the Democratic Republic of Congo”, by presidential order and created another public fund.
The change was due to “the evolution of the legal framework governing public institutions,” according to his statement.
In the letter dated May 12, the World Bank’s director of operations for the country, Albert Zeufack, said the institution had found out about the decision in the press.
“Before being able to continue to commit the project funds, the government and the World Bank should agree on transitional measures… in order to ensure that the funds are used for the intended purposes,” he said in the letter.
A spokesperson for Congo’s finance ministry said he was waiting for the go-ahead from the presidency before he could comment.
Presidential spokesperson Tina Salama denied any suspension of funding and said there would be transitional management of the fund. “I think arrangements have been made,” she said. She did not respond to questions about the Sh12.49 billion ($91 million).
One of the fund’s beneficiaries was the Panzi Foundation led by Denis Mukwege, a Congolese gynaecologist who won the 2018 Nobel Peace Prize for his work with victims of sexual violence.
“It’s a catastrophe for the victims,” Mukwege told Reuters. He said he had been warned a few days before that expenses incurred on his programme would stop being reimbursed. A programme coordinator said that he had had to turn victims away.
The abrupt decision to change the financing structure was an example of poor governance, said Valery Madianga, the director of a Congolese organisation specialising in public finance auditing.
“How can it be … that a public service, which signed a $1 billion programme contract with the World Bank, has been dissolved or has changed its social purpose without the latter being aware of it?” he said.
Four of Congo’s main opposition politicians wrote to the leaders of the International Monetary Fund, the World Bank and the African Development Bank last week asking them to conduct an audit of their funds in Congo, saying they suspected misuse.