Civil society groups in the DRC have raised alarms about a projected $132 million loss from a 2008 minerals-for-infrastructure deal with a Chinese consortium. The report identifies extensive tax exemptions and the exclusion of the agreement from the Congolese Mining Code as major factors for financial shortfalls. A CNPV member warns that the DRC could forfeit up to $7.5 billion over the next 17 years due to these issues.
Civil society organizations in the Democratic Republic of Congo (DRC) have expressed alarm regarding financial setbacks from a 2008 minerals-for-infrastructure deal with a Chinese consortium. A report by Congo is Not for Sale (CNPV), released on March 5, 2025, points to a $132 million shortfall expected in 2024 despite attempts to renegotiate the contract last year, as reported by local media, Actualite CD.
This financial loss is largely attributed to significant tax exemptions provided to Chinese corporations, which have eroded the DRC’s benefits from the agreement. The CNPV report criticizes the contract for being excluded from the Congolese Mining Code, resulting in unregulated fiscal advantages for the companies involved. The organization estimates that in 2023, the DRC lost $443 million due to these tax and parafiscal exemptions, accounting for 16% of the country’s total tax expenditures.
During the report’s unveiling, CNPV member Baby Matabishi warned that if these exemptions persist, the DRC could lose up to $7.5 billion over the next 17 years. This potential loss is attributed to Law No. 14/005, which extends broad tax, customs, and parafiscal exemptions to collaborative agreements, including the Sino-Congolese contract. Matabishi remarked, “This contract has remained structurally imbalanced since its inception.”
Despite the 2008 agreement lacking a strong legal basis, the DRC government justified these tax exemptions as essential for servicing loans related to infrastructure and mining development. However, the agreement has continued to operate outside the new Mining Code introduced in 2018, maintaining its unique tax conditions and privileges.
The financial implications of the DRC’s 2008 deal with a Chinese consortium are profound, highlighting a projected $132 million loss in 2024 and a potential cumulative loss of $7.5 billion over the next 17 years. The extensive tax exemptions granted to Chinese companies, along with the contract’s exclusion from the Congolese Mining Code, pose significant challenges to the DRC’s economic benefits from this agreement, suggesting an urgent need for structural reforms in the management of such contracts.
Original Source: globalsouthworld.com
