Diamond Smugglers Encouraged By New Measures

Panafrican News Agency

October 26, 1999

KINSHASA, DR Congo (PANA) - Measures taken in September by the Democratic Republic of Congo government to fight the dollar's domination of the local economy are seriously affecting the diamond sector, according to diamond dealers.

Dealers are no longer selling to the official market because the exchange rate of 4.5 Congolese francs to the US dollar is very low compared to that of the parallel market, which is 14 francs to the greenback.

Last week, only two dealers sold to the state-run Centre for Diamond Marketing, and the deals only generated 150 dollars in taxes, whereas it used to be about 2,000 dollars per session.

Because of this situation, dealers are smuggling diamond across the river to neighbouring Congo, a country which exported 16 million dollars worth of diamonds in September.

Operators in the sector are saying that the government must find an intermediate exchange rate, taking into account the reality of the parallel market.

To fight the dollar's dominance of the country's economy, the government has banned commercial transactions in foreign currency and all payments are to made in Congolese francs.

Consequently, all bureaux de change have been closed, offenders arrested, and commercial banks given responsibility to open exchange counters.

The Central Bank of Congo was also tasked to open exchange counters at N'Djili International Airport and at Beach Ngobila (jetty for the crossing between Kinshasa and Brazzaville).

Under the same measure, foreign nationals have been prohibited from carrying out petty trade.