performers. Among the criteria used for scoring the heatmap, two are especially relevant for the type of debt we analyze: sectoral coverage of debt reporting and debt instrument coverage. Sectoral coverage of debt reporting is important as SOEs, and not central government, are often the borrowing party. Debt instrument coverage is also important as it reveals whether the borrower has received a government guarantee in support of its loan repayment obligations. Across the RBL borrower countries scored on the heatmap, only the DRC has full coverage across both sectors and instruments. Guinea does not report SOE debt. Ghana reports on government-guaranteed SOE debt, but Ghana’s reporting on non-guaranteed SOE debt is missing. None of the other RBL countries reports on either of these aspects according to the heatmap.

The transparency of SOEs is critical given that they were the borrowers in nine of the 30 loans. These borrowers are Ghana Integrated Aluminum Development Corporation (GIADEC), Gécamines (DRC), SNPC (Rep. Congo), SHT (Chad), Sonangol (Angola’s national oil company), and Zimbabwe Electricity Supply Authority (ZESA)). Of these SOEs, Sonangol publishes audited financial statements yearly (latest available 2018). SHT recently released audited financial statements for the first time.31 SNPC recently released its audited financial statements for 2012-2018 for the first time, although consolidated financial statements for the SNPC Group have yet to be disclosed.32 ZESA does not have a functioning website. Gécamines produces audited financial accounts, which it files to the public registry and shares with the EITI secretariat but they are not made public.33 GIADEC does not publish audited financial statements, which may be because it was only recently established.34 In many additional instances SOEs played an important intermediary role (for example through an additional offtake contract offering to supply resources which are then deployed as collateral for repayment of the sovereign’s loan).

Only 15 of the 30 loans analyzed could be identified on the World Bank’s Debtor Reporting System. Of these 15, 11 loans could be clearly matched and 4 could be partially matched with the reporting provided in the DRS.35 There are several possible reasons for why these debts were missing from the system. Reporting coverages and definitions vary by country, and as discussed above, loans borrowed by SOEs (or joint ventures that involve state participation) may not be centralized and reported to DRS. In addition, some types of financing may have not been treated by the reporting country as a debt instrument, but rather as an advance payment to a supplier. The absence of information on collateral features in the DRS may have also led to misreconciliation, if there were discrepancies in reporting across sources.

Among the loans not found in the DRS, many could be directly verified in government reporting. For example, DRC’s public debt report provides details of Sicomines loan under the heading of external loans with government guarantees. South Sudan and Republic of Congo report intermittently on the debt that they have outstanding with commodities traders. Angola’s 2018 sovereign bond prospectus provides details of Sonangol’s CDB loans.

36 The Sicomines loan stands out as the sole RBL transaction for which the loan contract is publicly available.

The lack of transparency on RBLs has a number of implications. First, these deals are often highly complex and are therefore susceptible to receiving a poor evaluation of the risks that they entail. Second, given limited competition in providing such loans

> 31 https://eiti.org/chad

> 32 https://eiti.org/news/republic-of-congo-from-disclosure-to-diagnostics

> 33 IMF Country Report No.19/286, statement here: <u>https://www.africanews.com/2018/11/28/gecamines-publishes-a-comprehensivereport-in-response-to-outrageous-and-systematic-allegations-of-certain-ngos/</u> and this from 2016 annex 4 more authoritative, though unclear on audits. https://drive.google.com/file/d/1JVPyPgiGzieGjRe-N8ux-2I3s6Ix92zp/view

> 34 https://www.mofep.gov.gh/sites/default/files/reports/economic/2018_State_Ownership_Report_v3.pdf

> 35 We label “partial match” when a number of distinct features of RBLs in the public domain match the DRS, but not all.

> 36 The contract documents are available on the Ministry of Mines website, mines-rdc.cd, and on congomines.org

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