New AfDB Assistance to Post-Conflict Countries Policy: AfDB Clears Congo’s Arrears
The grant of 33.3 million Units of Account (US$ 50 million or 26 billion FCFA) today approved by the ADB Group will allow for rapid resumption of Bank Group assistance to the country in conjunction with the International Financial Institutions and the Donor community. This intervention lies within the framework of the new ADB Group assistance to post-conflicts countries, approved on 19 July 2004.
Congo has fulfilled the requisite conditions to qualify for an arrears clearance program under the Bank Group’s generalized framework for post-conflict countries (PCCs). First, Congo meets the five criteria for designation as a PCC (see box). Specifically, the country has made significant progress in re-establishing peace, improving its governance, restarting the economy, and promoting resettlement, disarmament and reintegration. Congo has similarly been classified as a PCC by the International Monetary Fund and the World Bank.
Secondly, since 2003, Congo has serviced all new maturities falling due on Bank Group debt, while remaining current on IMF and World Bank debt, demonstrating non-discriminatory debt servicing. Finally, Congo has paid its fair share of Bank Group arrears and has collaborated with the Bank Group to successfully mobilize adequate Donors resources to complete the financing plan for arrears clearance.
The PCC arrears clearance framework calls for three-way sharing of the financing costs; with contributions from the country, Donors and the Bank Group. Congo’s Bank Group arrears amounted to UA 100 million (US$ 150 million or CFA 116 billion) at the end of 2003. ADB contribution to clear this arrears represents 33.3% of the total amount, Congo having catered in the tune of 34.3% and Donors the remaining 32.4%.
The 5 ADB criteria qualifying a country as a post-conflict country
a) The level of peace observed in the country;
b) The efforts made to establish good governance structures including sound legal and judiciary systems;
c) The resumption of normal economic activity;
d) The progress in the area of resettlement, disarmament and reintegration;
e) The position and opinions of international institutions, in particular those of the Bretton Woods Institutions.