News: The Democratic Republic of Congo borrows 15.70 billion Congolese Francs on the local financial market of indexed Treasury Bonds
The government of the Democratic Republic of Congo (DRC) recently carried out a financial operation on behalf of the Central Bank of Congo (BCC). Indeed, a total amount of 15.70 billion Congolese Francs (CDF), equivalent to more than 7.7 million US dollars, was borrowed on the local financial market for indexed Treasury Bonds.
This operation, which took place on August 14, 2023, has a maturity of three years, with repayment planned no later than August 14, 2028, according to a press release from the Ministry of Finance. It should be noted that this operation consists of the securitization of the debt of the Central Bank of Congo (BCC) to the Public Treasury.
Indexed Treasury Bonds are medium- or long-term debt securities issued by a state’s Treasury. They can be issued either by syndication, that is to say in collaboration with a group of financial institutions, or by auction, which is based on auctions.
In the present case, the issuance of Treasury Bonds for the benefit of the Central Bank of Congo (BCC) indicates that the Public Treasury has a debt to the BCC. Thus, the Congolese government issues these financial bonds to repay its debts to the BCC, with an interest rate fixed for a specific period.
Once the government has issued Treasury Bonds to the BCC, the latter has the possibility of securitizing its debts, that is to say, selling the corresponding securities to individuals or companies. This operation allows the BCC to remove this debt from its balance sheet, which can contribute to the consolidation of its financial statements.
In summary, the borrowing of 15.70 billion Congolese Francs by the government of the DRC on the financial market of indexed Treasury Bonds demonstrates the country’s efforts to manage its claims and its debt to the Central Bank of Congo. This operation contributes to strengthening the financial and economic stability of the country.