The Committe in charge of the restructuring and clearance of the domestic debt, led by Bernard Ngazo, Adviser to the National Financial Institutions and Currency at the Ministry of Finance and Budget, held a press breifing, Thursday 14 November 2019 in Brazzaville. The participants discussed on securitization as a clearance mechanism of this debt proposed by the State.

The meeting, which brought together economic operators, representatives of Employers' Unions and Directors General of financial institutions, focused on the practical arrangements for securitization. This is a transformation of the debt into marketable securities (or special debt certificates) ; in a way, debt recognition documents which the State gives to the economic operators in order to  be paid immediately to the bank, with a haircut (in other words with a reduction of this debt). However, given that the internal debt audit (commercial and social) has not yet been completed, “only economic operators whose claims have been validated by the audit will receive these special debt certificates, from 15 December 2019. But this payment will take into account the recommendations of the International Monetary Fund (IMF)”, the Adviser Ngazo said. This audited trade debt is estimated at 145 billion F, and the social debt at 220 billion F.

“For claims that have not been validated, an appeal procedure to the Congolese Amortization Fund (CCA) was recommended, at the level of single window for claims that will be created for this purpose”, he said. 

            The benefits of securitization

For the creditors of the State: this operation will allow them to have the necessary resources to restart their activities: It enables them to withdraw from their debt vis-à-vis banks and other debtors by handing over certificates to them;

For banks and other investors: this operation is another form of high-yield medium-term investment, due to the interesting discount applied on the value of certificates issued by a country with a reassuring mining heritage; 

For local banks: this operation allows local banks that have benefited from the certificates to use them to withdraw from their debts by simple discount;

In addition, through this opeartion, local banks will have liquidity to re-inject into the economy.

It should be noted that at the end of this consultation, in which representatives of the Prime Minister's Office, the Treasury and the consular representatives, the parties agreed to meet regularly in order to find solutions quickly together, and not unilaterally.

In short, “the State has undertaken to manage this domestic debt in a global way. No economic operator will be leave out because Congo non-oil economic growth relies on the payment of the private sector's debt, as part of economic diversification”, the Adviser Bernard Ngazo concluded.

The Press office of the Ministry of Finance