Episode 74 - Sicomines, the IMF, loans, and power

Cowries and Rice

The Sicomines deal is one of China's largest "minerals for infrastructure" deals in Africa as well as one of its least understood. China Exim Bank extended $6 billion worth of credit to a Chinese consortium, called Sicomines, that would have mineral rights to Katanga province in the Democratic Republic of Congo. However, the deal was initially worth $9 billion and required a renegotiation as the International Monetary Fund argued that a Congolese debt-reduction plan could not include Sicomines due to the structure of the loans. Dr. Johanna Malm just earned her PhD from Roskilde University and joins us again on Cowries and Rice to discuss Sicomines - except that her dissertation argues that the IMF portrayed the $ 3 billion infrastructure loan within this particular agreement as a cheaper concessional loan, whilst in fact it was a significantly more expensive commercial loan. This was to ensure that the DRC could continue the debt relief process that was blocked by Sicomines - “For political reasons, the IMF also needed to downplay the challenge posed by the Chinese loan to the organisation’s debt limits framework."