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Businessmen Side With Congo Rebels

September 14, 1998

GOMA, Congo (AP) _ For Victor Ngezayo, a Congolese gold and coffee dealer, signing lucrative contracts with President Laurent Kabila proved a bust. The former rebel backed out and awarded the deal to a competitor.

Ngezayo is among many businessmen who initially supported Kabila’s takeover of the government, but are now finding him impossible to deal with _ nearly as difficult as the notoriously corrupt dictator Mobutu Sese Seko, who Kabila ousted May 1997.

Their unhappiness threatens Congolese hopes for stability and for the development of vast mineral resources to rebuild an economy destroyed during the 32 years of Mobutu’s rule.

Businessmen’s complaints are many.

In 1997, for example, Kabila signed a deal with Canadian-based Banro Resources Corp. of Toronto, represented by Ngezayo, which invested an initial $340 million in gold mining in eastern Congo.

Less than a year later, Kabila scrapped the contract and awarded the same concession to a newly formed Congolese company. Banro is now suing the Congolese government for $1 billion in damages. The suit was filed in Washington where SAKIMA, a branch of Banro operating in Congo, is registered.

Disillusioned and angry, Ngezayo has returned to his native Goma in the east of Congo where rebels are fighting to oust Kabila and install a new government.

``We couldn’t do business under Kabila,″ Ngezayo said at his lakeside villa, where he is waiting to see how the anti-Kabila rebellion that began Aug. 2 plays out. ``That man didn’t respect any laws or any international conventions.″

Rebels and businessmen say Congo’s 47 million people suffer because of government corruption, a lack of democratic institutions and repeated failures by Mobutu, and now Kabila, to ensure a healthy business environment and a broad-based, elected government.

Mining investments in Congo seem to be the major source of money for the country’s leaders, but not necessarily its people.

Congo _ one of the richest African countries in gold, diamonds, cobalt and copper _ is limping along at subsistence level. Jobs are scarce, state-run economic institutions have crumbled and political upheavals add to insecurity.

An average monthly teacher’s salary in Goma is about $15 _ but nobody has been paid in years and teachers are charging parents for education. A dentist at Goma hospital, which is supposed to be state-funded, has not been paid for six months.

Even as Kabila was ousting Mobutu, international mining companies rushed to secure deals with the new leader and, in many cases, helped finance his rise to power.

Arkansas-based American Mineral Fields, for example, flew Kabila in its own jet across the country until he finally agreed to give the company exclusive rights to the copper and cobalt tailings projects. Tailings, the waste material from mining, can be refined into finished products.

Last year, the company filed a $3 billion lawsuit against South African-based Anglo American, alleging the mining company offered cash to Kabila’s government to scrap the deal with the U.S. company. Anglo has denied any wrongdoing.

The rebels _ ethnic Tutsis, disenchanted members of Kabila’s army and opposition politicians _ accuse Kabila of mismanagement, corruption and nepotism, the ills he promised to eradicate.

Ernest Wamba dia Wamba, the rebel leader, accuses Kabila of ruining the little that was left of Congo’s economy.

``Mobutu used to take 10 percent of commissions on international business deals. Kabila is taking 30 percent,″ he said.

Ngezayo and other Congolese businessmen are now waiting to see what the second rebellion in two years can change.

``Everything’s paralyzed,″ Ngezayo said. ``I can’t do any business. I can’t travel. I can’t reach my employees. And if this persists, it will be bad for business. Nobody wants to invest in a war zone.″

Apart from gold mining, Ngezayo also lost control of a chain of hotels. Three thousand of his employees are unpaid, he said.

``This country can function only with right political leaders,″ he said. ``You can’t do business violating legal procedures. You need responsible and accountable authorities.″

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