The Democratic Republic of Congo (DRC) risks paying dearly following the dissolution of the DRC Social Fund (FSRDC), accompanied by the establishment of a new public body bearing the same name. This decision may cost the DRC US$1 billion in funding for World Bank humanitarian and development projects.
According to correspondence from the World Bank, the dissolved Social Fund was the entity in charge of the execution of three projects with a total budget of 1.04 billion dollars. These include: the Gender-Based Violence Prevention and Response Project (PRVBG) for US$100 million, the Eastern DRC Stabilization Project for Peace (STEP) for US$695 million US dollars and the Eastern Stabilization and Recovery Project (STAR-East) for 250 million US dollars.
The dissolution of the Social Fund risks interrupting around 5,000 individual consultant contracts under the STEP 2 project, which involves the construction of basic infrastructure in six provinces. In addition, some 492 contracts will be stopped.
The World Bank regrets the absence of a prior exchange with the Congolese authorities, which would have made it possible to better assess and anticipate the consequences together. She specifies that the decision to dissolve the Social Fund is not in accordance with the legal agreements. It therefore invites the Congolese government to communicate officially with stakeholders and beneficiaries on the interruptions of project activities.
The World Bank has also warned that any expenditure made under a component executed by the DRC Social Fund after publication of the Presidential Order could be declared ineligible. In addition, observations from the World Bank indicate that $91 million advanced to the PRVBG and STEP projects are awaiting justification to date.
In short, the decision to dissolve the DRC Social Fund is likely to have serious consequences on humanitarian and development projects and their direct beneficiaries. It is also an important notice of the obligation to comply with legal agreements, particularly where this affects contractual agreements with the World Bank.