The World Bank suspended financing of over $1 billion for humanitarian and development projects in the Democratic Republic of Congo.
The Congolese government abruptly and without warning dissolved the project financing, prompting this move.
Over 600,000 beneficiaries, including those who have experienced sexual assault, would be impacted by the suspension, according to a letter the World Bank sent to the finance minister of the Congo, per Reuters. An official from the World Bank confirmed the letter's veracity.
The letter also said that out of the $1.04 billion total, $91 million had already been released for the projects and that the World Bank is still seeking documents about their status.
The "Social Fund of the Democratic Republic of Congo" was dissolved by Congolese President Felix Tshisekedi on May 4, and a new public fund was created. President Tshisekedi attributed the change to the new legislative framework regulating public entities.
The World Bank's director of operations in the nation, Albert Zeufack, said in a letter dated May 12 that the organization had learned about the decision via the media.
Zeufack said in the letter that a deal on interim measures between the government and the World Bank was necessary for the project money to continue to be allocated. These methods guarantee that funds are used for their intended goals, according to a report from Yahoo! News.
The presidential spokesperson, Tina Salama, disputed any funding stoppage and said the fund would be transitionally managed. Although she assured that preparations had been made, she remained silent when it came to the $91 million released funds.
Congo's Policy Change Criticized
The unexpected shift in the financial system was condemned by Valery Madianga, the head of a Congolese group that specializes in public finance audits, who saw it as an example of bad governance.
Four major opposition lawmakers in Congo recently urged the heads of the World Bank, the African Development Bank, and the International Monetary Fund to examine their finances in the country. They highlighted concerns about possible abuse.
According to a World Bank report, Congo's oil-dependent economic model may not support long-term development and employment creation. The expected depletion of Congo's oil reserves and the worldwide transition to a low-carbon economy are responsible for this.
When compared to other nations, Congo's worker productivity is low and deteriorating, which impedes economic progress. A decline in per capita income and an increase in poverty are the results of the decline in labor productivity. Using the $2.15 per day international poverty standard as of 2021, the poverty rate in Congo increased from 33% in 2014 to 52% in 2021.
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