US embassy cable - 04KINSHASA1709

UNCLAS SECTION 01 OF 02 KINSHASA 001709 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON, ECIN, EIND, ELAB, ELTN, ENRG, ETRD, EWWT, CG 
SUBJECT: ECONOMIC REPORT - SEPT 4 THROUGH SEPT 10 
 
 
1. Summary.  Prices and exchange rates remain 
relatively stable, with exchange rates showing signs of 
an impending slight increase.  Public transportation 
prices have doubled in Lubumbashi due to higher gas 
prices and taxes.  Zimtrade will hold a trade fair in 
Lubumbashi.  RVF (river transportation authority) 
workers have ended their strike after RVF management 
agreed to pay a portion of their salary arrears in time 
to meet back-to-school expenses.  SNEL plans to dredge 
the canals at Inga I and II to increase generating 
capacity.  End Summary. 
 
MONETARY AND PRICE UPDATE 
 
2. Prices remain stable.  Higher demand for pens, 
notebooks, etc. due to the start of the school season 
continues to have a slight effect on non-food item 
prices. 
 
3. Although experiencing a slight depreciation, the 
Congolese Franc remains generally stable.  The 
depreciation began in Kinshasa with the distribution of 
some lump-sum salary payments to civil servants. 
However, the most likely cause of the exchange rate 
movement is the increased activity in the exchange 
market due to the need to pay school fees and buy 
school supplies.  Many Congolese who normally keep a 
mix of USD and FC have been purchasing dollars with DC, 
causing the slight depreciation. 
 
TRANSPORTATION 
 
4. PUBLIC TRANSPORTATION PRICES RISE IN LUBUMBASHI 
 
Local press reports that the cost of public 
transportation recently doubled in Lubumbashi, from FC 
50 to FC 100.  The price increase has been blamed on 
rising fuel costs due to market pressures and tax 
increases. 
 
TRADE 
 
ZIMTRADE TO HOLD TRADE FAIR IN LUBUMBASHI 
 
5. Local press reports that the Zimbabwean trade 
authority, Zimtrade, will hold a trade fair in 
Lubumbashi at the end of September to showcase 
Zimbabwean products and attract potential buyers and 
investment partners.  The fair will feature Zimbabwean 
manufacturers in the food and beverage, agricultural, 
pharmaceutical, construction, engineering, and mining 
sectors. 
 
LABOR 
 
RVF WORKERS END STRIKE 
 
6. Local press reports that RVF (river transportation 
authority) workers have agreed to return to work after 
striking for several months.  The workers had been 
striking to demand payment of salary arrears.  RVF 
authorities resolved the dispute after agreeing to 
disburse money to cover the school fees of workers' 
children, and to pay salaries from January and February 
of 2004.  RVF management also reportedly plans to 
organize a committee to lobby other GDRC agencies, 
ministries, and local businesses for payment of their 
debts to RVF. 
 
WORLD BANK TO PAY OCPT WORKERS 
 
7. The World Bank has agreed to pay USD 10.8 million in 
severance packages to retiring and voluntarily 
departing OCPT (post and telecommunications parastatal) 
workers.  Approximately 3,000 workers are slated to be 
released by September 25th, 2004. 
 
INFRASTRUCTURE 
 
SNEL SOLICITS DREDGING FOR INGA I AND II 
 
8. Local press reports that SNEL (electricity 
parastatal) is negotiating with private dredging firms 
to contract for the removal of 30,000 cubic meters of 
silt from the Inga I and II canals.  SNEL has suffered 
from shortages of generating capacity at the Inga 
hydroelectric complex due to low Congo River water 
levels, silting of the dams' intake canals, and 
equipment deterioration. 
 
AID 
 
JAPANESE FIRM TO BUILD HOSPITAL IN KINSHASA 
 
9. Local press reports that the Japanese firm 
Tokoshukai plans to build a 600-bed hospital in 
Kinshasa.  A delegation from the firm recently visited 
the DRC to survey proposed building sites. 
10. INFLATION BY CATEGORY  (IN PERCENT) 
WEEK ENDING            8/13    8/20    8/27    9/03 
FOOD                  -2       0       7       0 
BEVERAGE               0       0       0       0 
NON-FOOD               0      -1       0      -1 
CLOTHING               0       0       0       0 
RENT                   0       0       0       0 
TRANSPORT              0       0       0       0 
SCHOOL COSTS           0       0       0       0 
UTILITIES              0       0       0       0 
COMBINED FIGURES 
WEEKLY INFLATION      -0.6     0.0     2.6     0 
MONTHLY INFLATION     -0.8    -0.8     1.7     0 
 
11. EXCHANGE RATE DEVELOPMENTS 
 
                   8/13     8/20     8/27     9/03 
CENTRAL BANK RATE  390.175  390.594  392.045  396.0145 
PARALLEL MARKET 
-KINSHASA          385-390  385-390  390-395  390-395 
-LUBUMBASHI        380-385  380-390  380-390  380-385 
-MBUJI MAYI        385-390  385-390  385-395  385-390 
-KISANGANI         375-385  380-390  380-390  380-390 
-GOMA              400-410  400-410  400-410  400-410 
-BUKAVU            400-410  400-410  400-410  400-410 
 
 
MEECE