Press Release / Aug. 15, 2005

Has the IMF dropped the ball on transparency reforms in the Republic of Congo?

The Publish What You Pay coalition is concerned that the International Monetary Fund has given the green light for the Republic of Congo to take another step towards major debt relief, even though the government’s own figures reveal hundreds of millions of dollars of unexplained discrepancies.1

Despite earning almost one billion dollars in oil revenues in 2004, the Republic of Congo remains one of the poorest and most indebted countries in the world, and oil has not benefited the majority of the population.2 The Congolese government is currently asking the international community for massive debt relief. At the heart of the IMF and World Bank reform programme are measures to bring greater transparency to the opaque management of Congo’s oil revenues, to ensure that the money goes towards growth and poverty reduction.

Faced with international and domestic pressure to reform, the government has made various declarations of its commitment to increase oil sector transparency. It has also published a large amount of data on how the national oil company, the Société Nationale des Pétroles du Congo (SNPC), is managing the country’s oil wealth. 3

However, analysis of the data which Publish What You Pay recently presented to the IMF reveals little change to the pattern of systemic mismanagement and secrecy that has dogged Congo’s oil production to date. In particular, the quarterly certifications of oil revenue carried out by an independent auditor appear to show around $300 million of oil revenues more than the Ministry of Finance’s own statements in 2004. In short, around one third of Congo’s 2004 oil income appears to be unaccounted for in the budget.

Nevertheless, on 3 August, the first review of Republic of Congo’s performance under the IMF/World Bank Poverty Reduction and Growth Facility (PRGF) programme approved the country’s progress towards the decision point for major debt relief by its official creditors (amounting to around two thirds of its total debt).4 The IMF cited ‘a welcome improvement in governance’, including ‘steps to enhance transparency with regard to oil sector transactions’.5

‘We are extremely concerned that the IMF has given Congo a clean bill of health, because we see this as a test-case for willingness of international financial institutions to push for genuine transparency reforms in some of the world’s poorest yet resource-rich countries’ said Henry Parham, international spokesman for Publish What You Pay. ‘The G8 this year explicitly recognised that “good governance, accountability and transparency are crucial to releasing the benefits of […] debt cancellation”,6 and the Fund in particular has a responsibility to ensure that international taxpayers’ money is not being channelled to any government whose accounting system is characterised by secretiveness and mismanagement’.

Analysis of that data shows that:

• Around $300 million is unaccounted for in the 2004 budget. An independent auditor tasked with reconciling the discrepancies was not given access to bank account information but only to prepared statements by SNPC and the Congolese Ministry of Finance;
• Auditors found SNPC’s accounts ‘not even auditable’, for the third year running, with a significant risk of fraud due to lack of internal controls;
• In 2004, SNPC sold Congo’s oil for an average of 6% below its market value. Poor sales terms combined with expensive short-term oil-backed loans cost Congo $173 million of its oil revenue (around 17.5%) in 2004. In 2003, $20 million was lost on oil sales at below market prices to Sphynx (UK) Ltd. At the time, Sphynx was managed by Denis Gokana, formerly Special Advisor to the Congolese President and since January 2005 Head of SNPC;
• There is no clarity over the government’s debt obligations. Numbers in the 2003 audit cannot be reconciled with other financial data, and the government debt office appears not to monitor SNPC’s debts;
• Since signing up last year to the Extractive Industries Transparency Initiative (EITI), an international initiative to disclose payments made by oil, gas and mining companies to governments, the Congolese government has made no progress on EITI implementation.7

‘While we very much welcome the publication of information on oil revenues, the persistent problems revealed must be addressed before an irrevocable decision on debt relief is taken’ said Christian Mounzeo, Coordinator of the Congolese Publish What You Pay coalition. ‘Quarterly “certifications” of SNPC’s collection of revenues by an independent auditor are useful, but they do not prove that all the money actually makes it into the budget. Given the evidence, there must be tangible progress on changing the underlying way Congo manages its finances, in particular how the national oil company is run, before full debt relief is given. Such relief must be the reward for effective and institutionalised transparency’.

For more information contact Henry Parham (+44 776 0268 959) Sarah Wykes (+44 207 561 6362/+44 7971 06 44 33) or Christian Mounzeo (+242 557 78 45)


1. The Publish What You Pay campaign was launched in June 2002 and now has more than 270 members worldwide (see The coalition believes that revenue transparency is an essential condition for alleviating poverty, promoting just development, improving corporate social responsibility, and reducing corruption in many resource-rich developing countries, and calls for stock market and international accounting rules to require oil, gas and mining companies to disclose their net payments to governments.

2. Around 70% of Congo’s population live under the poverty line (ROC, Country Brief, April 2005). Oil accounts for around 65-70% of Congo’s income and its external debt currently stands at $8.57 billion (end 2003). See Republic of Congo: Review of Performance Under the Staff-Monitored Program and Request for a Three-Year Arrangement Under the Poverty Reduction and Growth Facility—Staff Report, January 10 2005, p. 40. Government oil revenues in 2004 reached approximately $970 million (515 billion CFA). Ibid, p. 31. According to data published in the Reconciliation for 2004, projected revenue will reach $1.49 billion (793 billion CFA) by end 2005. See

3. This includes publication of: quarterly certification of oil revenues by an independent auditor (2003 to Q1 of 2005); annual summaries of financial transactions undertaken by the national oil company (SNPC) on behalf of the government; tables of financial operations by the state; 3 independent audits of SNPC (partial for 1999-2001 and 2002, and complete for 2003); and reconciliations between the quarterly certifications of oil revenue and TOFE by an independent auditor (2003 and 2004). See

4. IMF Heavily Indebted Poor Countries Initiative: Status of Implementation, August 20, 2004, p. 10, para. 7.

5. IMF Executive Board Completes First Review Under the Republic of Congo’s PRGF Arrangement and Approves US $11.41 Million Disbursement, IMF Press Release 05/181, August 3 2005.

6. G8 Finance Ministers’ Conclusions on Development, June 10-11 2005, London.

7. The Extractive Industries Transparency Initiative was launched by the UK government in June 2003. More information is available at: