A new electronic transfer system is just the first step in rehabilitating the country's financial network.
It is still common practice for a businessman in the Democratic Republic of Congo (DRC) to eschew regular banking channels to transfer funds from, say, Kinshasa to Lubumbashi. Packing the cash in a suitcase and catching the next flight could save a wait of 30 days.
But if the governor of the country's central bank has his way, all that is about to change. In future, according to Jean-Claude Masangu Mulongo, such a transfer will take the expected three or four days to clear when the country's financial system turns electronic.
That is just one of a raft of changes in the pipeline, including new banking laws. And already, much has been done. The DRC in March floated its exchange rate and the parallel foreign exchange market has vanished. Gasolene, previously unavailable due to lack of foreign exchange, is once more on tap. The government is committed to price liberalization, a program to tighten monetary policy, adoption of strong fiscal adjustment and a set of structural reforms.
It looks as if the DRC might be embarking on a new upwards trajectory. The World Bank, for one, has decided the situation has begun to improve. In August, it approved a $50m loan — one of the biggest aid donations received by the country in years. It also restored the credit eligibility of the DRC.
The International Monetary Fund (IMF) too has made approving noises, hailing the improved political and security situation since Joseph Kabila took over the reigns of power from his assassinated father, Laurent, in January. In addition, the authorities have started the process of liberalizing, restructuring and revitalizing the Congolese economy, especially the private sector, emphasizes the IMF.
Other international bodies, like the European Union, are also looking upon the new government more favorably. And it is not only Western groups: a recent fact-finding mission to the DRC comprised of Tanzanian business leaders filed back a positive report.
The DRC certainly needs all the assistance it can get because the problems it faces are grave. A July IMF report found "a vicious cycle of hyperinflation, continued depreciation of the currency, increased dollarization, financial disintermediation, lack of saving, falling output, and generalized impoverishment of the population with the concomitant spread of diseases like HIV/ Aids".
It also found the economy shrank during the 1990s by an average 4.6 percent a year — although it expects growth to pick up from minus 4.3 percent last year to zero this year.
The question is whether the cash injection provided by the international financial institutions (IFIs) is the right medicine. Mr Nelson, an economist at the World Bank, thinks stabilization of the DRC together with international grants and loans are all necessary to pull the country out of its crisis, but they are not sufficient in themselves.
Primarily, this is because of the huge external debt burden already faced by the country. "The IFIs are working with the Congolese toward a solution of the arrears on the international debt, since our charters prohibit the IFIs from lending to a country in arrears," he says. However, when that happens the debt service must resume and that would entail payments of $50 to $60 million per year to the IFIs alone, which is not sustainable - particularly as the government seeks to restore spending on health and education.
In addition, Nelson emphasizes that the $200m pledged at the July donors' information meeting in Paris indicates that the international community is prepared to assist, but co-ordination, more funds, and active engagement with the Congolese private sector and civil society are all needed.
Claude Kabemba, at the Electoral Institute of Southern Africa, agreed and welcomed the IFI's financial assistance. But he warned that conditions such as debt repayments, could scupper the process. "This kind of approach would create instability rather than peace in the country."
Kabemba added: "For a peace process negotiation to hold, it should go hand-in-hand with the improvement of the day-to-day lives of the Congolese. It is only this way the international community could send a message that ending conflict pays. And quick-impact projects could help to do just that." In its favor, the DRC will probably qualify for the Highly Indebted Poor Countries initiative, which would help channel funds to social needs.
Yet there are other quick fixes that must be put into place to ensure the immediate outlook. Mr Mulongo, the DRC central bank governor, blames the main cause of economic instability on hyperinflation (at 511 percent last year) but he believes this is now under control. "This inflation was fuelled by the government deficit, which in turn was financed by printing new money. But the central bank has a new target of 99 percent inflation to be reached by December."
On reforms like liberalizing the exchange rate, Mulongo says the DRC now has transparency at the cost of volatility caused by speculators. "It took (the Central Bank) a long time to convince the government of a floating exchange rate. It was a very high risk operation," he says.
But it is a risk that has paid off — not only for the DRC but also for the international community. He said: "I think we have learned from our past mistakes and we know how to go forward and to make things work for the good of the people of Congo, for the good of businesses that will be in Congo and I think for Africa as a whole. It's better for the world to have a stable Congo and a strong Congo contributing to a stronger world." If the latest monetary support is any indication, the World Bank and IMF seem to agree.
