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Misanet.com / IPS, 6 June - The International Monetary Fund (IMF) is pressing the government of Congo-Brazzaville to guarantee that the country's petroleum income is being managed transparently. Reports showed lack of transparency in revenue transfers. The IMF has asked for a complete audit of the petroleum industry pending enactment of a framework agreement on relations between the government and the Congolese National Petroleum Company (SNPC), the state-owned marketer of oil. A recent IMF mission to the country reported a lack of transparency in the transfer of revenues from the company to the national treasury and blamed this on the failure to enact the agreement despite repeated Fund requests since last year. "We need transparency in the petroleum industry. No agreement has yet been signed. Such an agreement will go a long way," said an IMF official who spoke on condition of anonymity. Petroleum Minister Jean-Baptiste Tati Loutard said: "Right now, we're working to establish a SNPC-government convention which will allow resolution of any problems which may eventually arise between the government and company, especially those regarding sales and the deposit of monies from such sales. It would also establish administrative control mechanisms." Although no formal accord has been struck, SNPC chairman and chief executive Bruno Itoua said last August that the company would accept finance ministry guidance in making payments to the treasury, central bank or government creditors. Last November, the IMF approved a provisional emergency programme for the Congo, which was emerging from two years of civil war. After the programme was approved, Finance Minister Mathias Dzon appealed for an end to "financial polycentrism" in the government. - We must put an end to financial polycentrism if we are to exercise budgetary discipline. Our donors will be judging us on this point, Dzon declared. In March, an IMF mission decried major flaws in the execution of the provisional emergency programme, especially extra-budgetary disbursements made by the treasury, and the absence of transparency in relations between the government and the SNPC. This remains a sticking point between the Congo and the IMF. The Congo now wants to negotiate with the IMF again for a new programme to promote growth and reduce poverty and for debt relief under the Heavily Indebted Poor Countries initiative. For the moment, however, securing such a programme seems unlikely because of the IMF's concerns regarding management of the country's petroleum revenues. "No new programme can be established with the Congo if the petroleum sector lacks transparency," a Fund official said. It is "not just the SNPC but also all the other companies that this transparency concerns. We need an operational audit of the entire sector," he added. According to the IMF staffer, the Congo extracts less profit from its oil than do other Central African countries with similar production levels. Oil is the Congo's biggest export. It pays for 60 percent of the government's budget. In 2000, the country made 489 billion CFA francs from the almost 13 million metric tons of oil it produced. One dollar is equivalent to about 700 CFA francs. This year, receipts are expected to reach 471.3 billion CFA francs. Taxes from petroleum will account for 21.5 percent of the country's Gross Domestic Product (GDP), as opposed to 23 percent in 2000. The Congo produces 271,000 barrels of oil per day, 90,000 of which are treated as the government's and sold by SNPC on the state's behalf. According to Itoua, the company plans to invest in international financial markets. As a state-run company, however, SNPC was created to fund social programmes. The company's last board of directors meeting, in December 2000, dissolved amid criticism of its management after managers failed to provide the directors with operating statements. High-ranking officials then accused the company of usurping petroleum and finance ministry functions by developing its own relationships with producers and traders. Itoua, the SNPC chief, rejected these accusations and asserted that he had transferred money to some of the country's creditors on the finance minister's advice. Rather, he said, individual oil companies were withholding payments to the state on the argument that the government owed them money. - The petroleum companies are holding back 80 percent of the duties which should come to the government, the Itoua said, adding that he would like SNPC to seize the withheld money. The government, which is negotiating with the companies for payment, has pledged not to use any of the money it manages to recoup without first consulting the IMF.
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