AFRICA REVIEW

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 05509019
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 18
• Document Creation Date: February 24, 2023
• Document Release Date: February 24, 2023
• Case Number: F-2014-00485
• Publication Date: March 22, 1985

Intelligence
Directorate to
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MAMA rim b
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OR MARfJ
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) ALA AR -007
22 March 185
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Africa Review
22 March 1985
Page
Articles Southern Africa: The ANC in Disarray
Briefs
South Africa's major black insurgent group is suffering from
deteriorating relations with neighboring black African states as well
as internal divisions.
Sub-Saharan Africa: Coping With Economic Adjustment
Economic adjustment programs increasingly adopted by Sub-
Saharan African countries in recent years reflect their growing
awareness of a need for economic discipline in order to receive
financial support from the IMF.
Zimbabwe: Agriculture in Transition
1
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Although Zimbabwe is increasing agricultural exports, several new
government initiatives threaten to change the regime's heretofore
pragmatic agricultural policies
13
Zambia: Copper Production
17
Articles have been coordinated as appropriate with other offices within CIA.
Comments and queries regarding this publication may be directed to the Chie
Production Staff, Office of African and Latin American Analysis,
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Articles
Southern Africa:
The ANC in Disarray
NR
The African National Congress (ANC), the major
South African insurgent group, has been hampered
since the Mozambicans expelled its military personnel
a year ago. The group is suffering from deteriorating
relations with some black African states in southern
Africa and from internal divisions. A symptom of the
group's plight has been the dramatic decline in ANC
attacks, only two small bombings since last
September. The ANC's military campaign is likely to
continue to sputter as a result of Pretoria's success in
pressing nearby states to clamp down on the group.
NR
Regional Woes
South Africa's drive toward detente with its neighbors
has led to growing restrictions on ANC military
activities in southern Africa. The Frontline States
lack the security resources to eradicate ANC military
activity within their borders, but the ANC is
constrained by the political costs of breaking rules
imposed by their nervous hosts. For example, we
believe the ANC has the capability to conduct some
clandestine operations out of Mozambique, but this
would risk the closure of the group's political office in
Maputo and a cessation of Mozambican support at
Frontline State and OAU meetings. NR
Angola. We believe the ANC's future in Angola, and
possibly the survival of its military wing, hinges on the
progress of the Namibian peace talks. The group has
several thousand members in Angola, most of them in
camps undergoing military training by Cuban and
Soviet Bloc instructors. South Africa already has
broached the subject of Angolan support to the ANC
during the Namibian talks, according to Embassy
reports. The ANC undoubtedly is concerned that a
breakthrough in the talks may lead to an eventual
South African Angolan nonaggression pact. NR
Botswana. Following concerted pressure from
Pretoria, Botswana last month ordered the expulsion
of all ANC military personnel, according to press and
US Embassy reports. After the Mozambican�South
African nonaggression pact�the Nkomati accord�
was signed last year, Pretoria began to press for a
similar treaty with Botswana, which has eschewed
any formal agreement with the white minority
regime. The ANC presence in Botswana grew at the
same time as guerrillas worked to improve their
infrastructure and establish new routes for infiltrating
South Africa. Botswana subsequently became
concerned about the threat of South African attacks
against the ANC buildup. The bombing of an ANC
residence in Gaborone early last mo.ith probably the
work of South African agents�and South African
warnings that its forces would not stop at the border
when pursuing fleeing guerrillas undoubtedly
influenced or reinforced Botswana's decision to crack
down on the ANC.
Even before the recent crackdown, the ANC was
largely unsuccessful in efforts to infiltrate South
Africa from Botswana. The border between the two
states is long, but the terrain is not favorable for ANC
infiltrations, primarily because it provides little cover.
The South Africans have been successful recently in
intercepting ANC guerrillas shortly after they have
entered the country from Botswana. Last month, the
South African Foreign Minister informed Gaborone
that seven ANC incursions from Botswana had been
detected since September 1984, according to press
reports
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Southern Africa
ANGOLA . Matadi
Luanda*
Lobito.
SOUTH AFRICA
(Walvis Ray)
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NAMIBIA
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SOUTH AFRICA
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Harare
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Maputo
Vbane
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MOZAMBIQUE
Beira
0 Kilometers
Miles 500
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Lesotho. The recent thaw in relations between
Lesotho and South Africa does not augur well for the
ANC. South African strong-arm tactics in recent
years have forced the Jonathan government to
abandon its preferred policy of turning a blind eye
toward the ANC and to adopt a somewhat more
active circumscription of the group's operations in
Lesotho. The manner in which Maseru deals with the
murder earlier this month of a Lesotho soldier by an
ANC member will be a barometer of Lesotho's
relations with the group, according to the US
Embassy. NR
The South Africans, who we believe are not satisfied
with the Lesotho government's efforts, want Maseru
to sign a security pact. If the intensity of South
African pressure increases, Lesotho is likely to follow
Botswana's example by cracking down on the ANC in
the hope of satisfying Pretoria and avoiding a formal
agreement. NR
Mozambique. ANC Acting President Tambo has
admitted publicly that Maputo's efforts to abide by
the Nkomati accord have dealt the ANC a
devastating blow. The group previously used
Mozambican territory to plan and stage the vast
majority of its attacks against South Africa. Shortly
after the accord was signed, Mozambican security
forces conducted raids on ANC facilities, forcing the
group's personnel to relocate in neighboring states.
The accord has prompted a great deal of personal
animosity between President Machel and Tambo, who
were once very close, according to Embassy reporting.
NR
Swaziland. Relations between Swaziland and the
ANC have deteriorated steadily following a security
agreement between Mbabane and Pretoria in 1982:
- Swazi security personnel engaged in several gun
battles with ANC guerrillas who poured into
Swaziland following the crackdown in Mozambique
last year, according to press reports.
� Last December, an ANC member assassinated a
Swazi police official suspected of collaborating with
the South Africans against his group, according to
press reports.
3
� In January, several armed ANC guerrillas stormed
a jail in Mbabane and released three members of
their group who were held on weapons and
immigration charges, according to press reports.
NR
A Swazi Foreign Ministry officer told the US
Embassy that a meeting of Swazi and ANC officials
this month to discuss their troubled relations did not
go well. He described the ANC attitude at the
meeting as "completely unacceptable." He added that
no further talks would be held until the group publicly
retracts statements alleging the Swazis have handed
over ANC personnel to South Africa.
Tanzania. Since the signing of the Nkomati accord,
Tanzania has increased its support to the ANC, but
this has not offset the loss of the use of Mozambican
territory. Tanzania's location offers the ANC slightly
more protection from South African retaliatory
strikes, but the distance guerrillas have to travel to
reach South Africa makes it less attractive as a
staging area for attacks.
Zimbabwe. Pretoria has refrained from pressing
Harare for a security pact and has even praised
Zimbabwe publicly in recent months for acting
quickly on intelligence provided to it by South Africa.
Harare has continued to monitor the ANC closely in
Zimbabwe, arrest its armed personnel, and seek out
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and confiscate weapons cached by the group.
Zimbabwean officials, in our view, are well aware
that South Africa would not hesitate to take harsh
action in response to any shift in Harare's treatment
of the ANC that facilitates the group's military
campaign.
NR
Despite Harare's vigilance, ANC military personnel
do use Zimbabwean territory to a limited extent.
Internal Restiveness
The ANC's regional woes are adding to dissension
within the group, especially among guerrillas at
camps in Angola and Tanzania.
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younger ANC members are
increasingly critical of the current leadership,
especially over the low level of ANC activity. Many of
these younger members fled South Africa following
the widespread riots there in 1976 in the hope of
gaining military training and striking back at
Pretoria. The growing regional constraints on the
ANC's military wing have left most of its personnel
stranded in camps far from South Africa's borders,
leading to disgruntlement and a series of mutinies in
recent years.
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Prospects for talks between the ANC and Pretoria
have been widely publicized in recent months,
undoubtedly contributing to splits in the ranks of the
organization.' The ANC has a large contingent of
young, militant black nationalists who, in our view,
would be strongly opposed to opening any channel of
communication with Pretoria at this time. Some, who
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ANC President Nelson
Mandela
also are members of the outlawed South African
Communist Party, probably judge correctly that they
would not be included in any government amnesty
offer to the ANC in the foreseeable future.
Nevertheless, the ANC leadership has indicated
publicly that it would consider opening a dialogue
with Pretoria if the government takes certain good
faith measures, such as the unconditional release of
imprisoned ANC President Nelson Mandela.
The recent cancellation of a scheduled ANC congress
demonstrates the present degree of discord within the
group, even among its political leaders.
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Outlook
South Africa has long sought economic and security
accords with neighboring states to strengthen its
regional hegemony and break out of its diplomatic
isolation. Since Botswana's decision to expel the
guerrillas, Pretoria publicly has backed off from its
demands for a nonaggression pact. Despite assurances
to Botswana, Pretoria is likely to return to pressing
Gaborone and other neighboring governments to sign
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formal bilateral agreements, especially if these
governments prove unable or unwilling to control the
ANC. South African covert operations against ANC
targets are likely to continue even while Pretoria
moves forward on the diplomatic front with its policy
of regional detente. (b)(3) NatSecAct
ANC officials have indicated publicly that they
believe a collapse of the Nkomati accord is imminent.
Even if relations between Pretoria and Maputo
continue to falter,' we believe it is unlikely that
Mozambique will permit large numbers of ANC
military personnel to return, because this would
virtually guarantee a resumption of South African
cross-border strikes into Mozambinne
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It is unlikely that the ANC will be able to rebound
from its setbacks last year and mount an effective
military campaign anytime soon. The 73-year-old
ANC, however, has survived against tough odds in the
past and is likely to continue to cause problems for
Pretoria in the years ahead. While the ANC's level of
activity probably will remain below average because
of the growing regional constraints, the group's
military wing will still be capable of carrying out
some headline grabbing bombings. (b)(3) NatSecAct
The status of Nelson Mandela continues to be the
biggest unknown factor in equations on ANC
prospects. If Mandela is released unconditionally�
something we believe is unlikely but possible his
overwhelming popularity among South African
nonwhites would assure him a major role in domestic
black politics. If he were to leave the country and
actively resume his position as head of the ANC,
many young blacks would follow him to fight under
his leadership.
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A reinvigorated ANC with Mandela at the helm
might even cause a shift in attitudes among leaders of
neighboring black states. They currently are following
a policy of cautious detente with Pretoria, but their
hatred of apartheid could overcome fear of South
African retribution if they believed the ANC's
military campaign had a reasonable chance of
success. (b)(3) NatSecAct
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' Mozambican insurgent attacks have continued at a high level
despite the accord, leading to accusations by officials in Maputo
that Pretoria is still supplying the insurgents. (b)(3) NatSecAct
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Sub-Saharan Africa: Coping With
Economic Adjustment '
Since 1978, Sub-Saharan African countries have been
increasingly implementing economic adjustment
programs, nearly all with IMF financial support,
aimed at achieving viable balance-of-payments
positions or restoring economic growth in their hard-
hit economies. The programs usually involve currency
devaluations, tax reform, stricter budget controls,
reductions in the scope of government enterprises, and
a movement toward a more market-oriented economic
environment.
The increased IMF presence in Sub-Saharan Africa
has made the governments of the region more aware
of the requirement for economic discipline in order to
receive financial support. The bulk of the funds
loaned by the IMF has been conditioned on the
meeting of mutually agreed-on economic performance
criteria. The programs have produced mixed results so
far but promise to bring about major changes in
economic processes in the region, provided they are
maintained over the longer term.
Causes of Economic Problems
The economic problems of Sub-Saharan African
countries reflect several years of adverse factors:
a They were hard hit by oil price increases in 1973-74
and 1978-80.
a After a 1975-78 boom, prices of exported primary
commodities collapsed in 1978-80 and have only
recovered moderately since then.
a They have been unable to break their dependence on
agricultural and mineral exports, whose sales have
been restricted by slow economic recovery in
industrial countries.
' This report covers all countries on the continent except Algeria,
Egypt, Libya, Tunisia, Morocco, and South Africa, plus the islands
of Comoros, Madagascar, Seychelles, and Sao Tome and Principe.
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a Short-sighted domestic economic policies have
helped to maintain inadequate price incentives for
agricultural production, overvalued foreign
exchange rates, troublesome budgetary deficits, and
inflationary monetary expansion.
a The worst drought in many years has ravaged the
region since 1983 and, in extreme cases, created
famine conditions.
Their Impact
The economic impact of these factors on the Sub-
Saharan African countries has been severe. Excluding
the oil exporting nations of Congo, Gabon, and
Nigeria, we estimate that the current account deficit
of the region tripled from $2 billion to $6 billion
between 1973 and 1978 and reached a record $11
billion in 1981. The deficit has declined since then to
about $7 billion in 1984, mainly because of cutbacks
in imports and a modest recovery in exports.
Concomitant with the widened current account
deficits, official medium- and long-term external debt
for the region ballooned from $6 billion in 1973 to an
estimated $55 billion in 1984. At the same time,
regional per capita output recorded no gain and
actually declined in countries like Ghana,
Mozambique, and Tanzania. In the face of these
growing economic pressures, 29 of the 46 countries in
Sub-Saharan Africa made over 90 standby or
extended arrangements with the IMF between 1978
and 1984 that were conditioned on economic policy
adjustments.
Coping With Adjustment
The economic adjustment programs have yielded
mixed results. Some countries have had moderate
success but remain vulnerable to external economic
forces or natural disasters. Others have had little
positive results after years of effort of varying
intensity.
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Table 1
Sub-Saharan Africa:
Selected Economic and Financial Data a
Billion US $
1978
1979
1980
1981
1982
1983
1984
Current account deficit b
� 10.0
�2.0
�5.0
�17.0
�17.0
�12.0
�12.0c
Current account deficit
excluding Congo,
Gabon, and Nigeria b
�6.0
�7.0
�10.0
�11.0
�9.0
�7.0
Net financial inflows
from all sources
9.0
10.0
13.0
13.0
13.0
12.0
12.0
Net financial inflows
from the IMF
0.1
0.4
0.6
1.6
1.2
1.6
0.4
a All countries on the continent except Algeria, Egypt, Libya,
Tunisia, Morocco, and South Africa, plus the islands of Comoros,
Madagascar, Seychelles, and Sao Tome and Principe.
b Goods, services, and private transfers.
c Estimated.
Moderate Successes
Ghana, Ivory Coast, Kenya, Mali, Senegal, Togo, and
Zaire are among the countries that have been
moderately successful in terms of perseverance in
their economic programs and modest economic
achievement. Most of these countries had earlier
failures and all require continued adjustment efforts
to achieve or maintain economic stability.
Ghana has been implementing an economic recovery
program since 1983, with the support of the IMF and
Western donors. The program calls for substantial
currency devaluations, reduced public expenditure,
gradual liberalization of price controls, and the
rehabilitation of key economic sectors such as
agriculture and transportation. So far, all IMF
conditions have been met and the US Embassy
estimates that the decline has been halted. The
Ghanaian economy, however, is still far from
achieving sustained growth.
The Ivory Coast has been implementing an IMF-
supported stabilization program since 1981. The
program was not fully successful through 1983
because unfavorable export and import price trends
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impacted adversely on the government's receipts and
expenditures. Since then, spending cuts and new tax
measures have sharply reduced the public-sector
deficit. Between 1980 and 1984 the current account
deficit was cut from $1.3 billion to $500 million and
the inflation rate from 15 percent to 4 percent.
Because of failure to meet December 1984
performance criteria, however, the IMF program was
canceled last month and is being replaced by a new
arrangement presently under negotiation. The
economy remains affected by drought and the IMF
expects economic growth, negative since 1981, to be
slight for the rest of the decade.
Kenya has been almost continuously implementing
adjustment programs with IMF support since 1978.
Nairobi has had problems in carrying out the
programs, with three of the five since 1978 canceled
for failure to meet IMF conditions. The World Bank
has declined to make a third structural adjustment
loan to the country because of Nairobi's failure to
meet loan conditions. Even so, substantial economic
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Table 2
Sub-Saharan
IMF Standby
Arrangements
31 January 1985
Africa:
and Extended
as of
Million US $
Starting
Date
Ending
Date
Amount
Standby
arrangements
Central African
6 Jul 1984
5 Jul 1985
15
Republic
Gambia, The
23 Apr 1983
22 Jul 1985
14
Ghana
27 Aug 1984
31 Dec 1985
183
Ivory Coast
3 Aug 1984
2 Aug 1985
84
Liberia
7 Dec 1984
6 Jun 1986
42
Madagascar
10 Apr 1984
31 Mar 1985
35
Mali
9 Dec 1983
31 May 1985
42
Niger
5 Dec 1984
4 Dec 1985
16
Senegal
18 Jan 1985
17 Jul 1986
75
Sierra Leone
3 Feb 1984
2 Feb 1985
53
Sudan
25 Jun 1984
24 Jun 1985
93
Togo
7 May 1984
6 May 1985
20
Zaire
27 Dec 1983
26 Mar 1985
239
Zambia
26 Jul 1984
30 Apr 1986
228
Extended
arrangement
Malawi
19 Sep 1983
18 Sep 1986
106
NR
adjustment has been made over the years. Between
1981 and 1984, the inflation rate for consumer prices
was slashed in half to 10 percent; the overall
budgetary deficit as a percent of GDP was reduced
from 10 percent to 5 percent over the same period;
and the overall balance of payments recorded
surpluses in 1983 and 1984. Mainly because of one of
the worst droughts in Kenya's history, however, the
economy had no growth last year and will be slow to
rebound. The government is continuing its economic
adjustment policies with IMF support.
Mali's IMF-supported program started in November
1983. The country has made satisfactory progress
since then, in the view of the IMF. Public-sector
wages have been frozen since 1981 and government
hiring has been curtailed. Some public enterprises are
being liquidated, including the national airline.
External arrears are being reduced and credit
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expansion has been well within the limits set by the
program. The government remains committed to
reform, despite drought conditions that have reduced
cereal production and the livestock herd substantially.
Senegal's economic adjustment efforts with IMF and
other external support date back to 1979. Through
1983, results were mixed because the programs were
not always maintained. Better results have been
achieved since then with a more rigorous application
of policy measures by the government. Despite being
hard hit by drought, all of Senegal's financial
objectives were achieved in the IMF-supported
program that ended in June 1984. Within 12 months
the fiscal deficit as a percent of GDP fell from 8
percent to 5 percent and the current account deficit
was reduced from 14 percent to 11 percent of GDP.
Serious structural and financial problems remain,
however, and the reform program continues.
Togo has been receiving good marks since 1983 for its
adjustment efforts with financial support from the
IMF, World Bank, and bilateral donors. Earlier
programs were less successful. The government has
launched a major denationalization program for its
many state enterprises. Other reform measures
include rural development, the overhauling of tax and
customs administration, restraints on public hiring,
and a restrictive monetary policy. Inflation has been
curbed. Based on partial data, we believe that prices
may actually have fallen last year. Real economic
growth is estimated by the IMF to have been about 1
percent in 1984 after declining continuously since
1980. The economy remains affected by drought.
Togolese authorities are working closely with the
World Bank in developing a medium-term
development strategy supported by a structural
adjustment loan from the Bank.
Zaire is committed to carrying out the latest of a
series of IMF-supported programs that date back to
1977. The present program includes drastic exchange
rate changes, tax reform, tight budget practices, and
controlled credit expansion. The IMF regards the
program as successful so far. The inflation rate fell
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from 76 percent in 1983 to an estimated 47 percent
last year, the 1984 current account deficit of $230
million was smaller than the program called for, and
payments on rescheduled external debt are on time.
Unresolved problems include the restructuring of
public corporations and the rehabilitation of the
agricultural sector. Prime Minister Kengo wa Dondo,
a key figure in the reform effort, claims that President
Mobutu intends to maintain "economic rigor"
throughout his new seven-year term.
Among other countries maintaining adjustment
programs with moderate success, Malawi has
sustained a rising growth rate and reduced inflation in
recent years. Madagascar's performance under its
present arrangement with the IMF has been favorably
viewed by the Fund. The IMF believes that
Madagascar's balance-of-payments outlook should
improve in the medium term despite debt-service
problems.
Less Successful Countries
Liberia, Nigeria, and Tanzania are prominent among
the countries that have been less successful in
implementing economic reform. In Liberia, there
appears to be a lack of resolve for a sustained effort in
the uncertain political environment preceding a
possible return of civilian government in October.
Nigeria's program is only a year old and has not been
fully formulated by a military administration of
uncertain tenure. For Tanzania, the main cause
appears to be unworkable economic policies based on
President Nyerere's philosophy of "African
socialism."
After showing signs of economic recovery, Liberia's
situation has worsened alarmingly since mid-1984.
With almost continuous involvement in IMF-
supported programs since 1979, Liberia had achieved
moderate success in its adjustment efforts. Although
the country's financial position remained precarious,
the government had eliminated all external arrears by
mid-1984. Since then the government's resolve has
weakened as evidenced by unbudgeted expenditures
and large revenue shortfalls. The treasury is nearly
empty. The IMF program has been suspended since
December because of failure to make repayments.
Economic assistance from bilateral sources, the
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European Community, and the World Bank has been
held up as a result. Nearly all these parties are
pessimistic about the country's medium-term
economic prospects.
Nigeria has not yet succeeded in stemming an
economic decline that has been going on since 1980.
The first priority of the government is dealing with
the severe financial squeeze resulting from a near 60-
percent fall in oil revenues between 1980 and 1983.
The military administration has implemented an
austerity budget with sharp cuts in expenditures,
reductions in public employment, and the
postponement of most capital projects. Severe import
restrictions have been imposed. The program has
brought mixed results, so far. Although official
reserves doubled to $1.8 billion last year, the inflation
rate was around 100 percent, according to a US
Embassy estimate. The government has avoided using
IMF support in its reform efforts and some military
leaders have publicly adopted an anti-IMF attitude.
Because of the still serious economic picture, however,
senior civil servants including the Minister of Finance
feel that Lagos will have to turn to the IMF,
according to the US Embassy.
Tanzania has met with little success in its economic
efforts. The country has been without an IMF-
supported program since 1980. Since then, some
economic adjustment measures have been
implemented as groundwork for an anticipated IMF-
supported program that has not materialized because
of failed negotiations, or have been taken through
broader economic programs drawn up by the
authorities. Reform measures carried out last year
include a currency devaluation and higher producer
prices for staples like coffee, cotton, and tobacco.
These measures have been too little and somewhat
late. The economy continues to decline, with negative
growth each year since 1980 and living standards
lower than they were 15 years ago.
The Political Fallout
The governments of Sub-Saharan African countries
have, on occasion, met with internal opposition to
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economic adjustment programs that have been
implemented with or without IMF support. For
example:
� In Ivory Coast, where an 1MF-supported
adjustment program has been under way since
1981, teachers organized a strike in 1983 to protest
reduced housing subsidies.
� The labor movement in Mali and Zambia protested
I MF-sponsored economic reform measures last
year.
There have been no instances of governments being
ousted, however, because of the application of IMF-
sponsored programs. The threat to stability appears to
come more from worsening economic conditions that
are belatedly or inadequately addressed. For example,
the leaders of a successful coup in Mauritania last
December blamed poor economic performance and
mismanagement of state enterprises for their action.
The economic crisis in Sub-Saharan Africa is forcing
many African political leaders to alter their views of
foreign financial support and the need for economic
reform. After years of dependence on official
economic assistance based on grants and project loans
with no economic adjustment conditions, many are
now compelled, with the tacit agreement of their
foreign bilateral donors, to reform their economies in
collaboration with multilateral financial institutions
like the I M I' and World Bank as a condition for
continued foreign support. The many leaders publicly
advocating economic reform measures and
implementing them under IMF auspices include
Presidents Siad (Somalia), Diouf (Senegal), Kaunda
(Zambia), Kountche (Niger), and Mobutu (Zaire).
Similar support for reform by government leaders also
is happening where there are no IMF-assisted
programs and even some anti-IMF sentiment, for
example, in Burkina and Nigeria.
11
Outlook
We expect the Sub-Saharan African countries to
expand the implementation of economic adjustment
programs over the medium term. These countries are
highly dependent on bilateral economic assistance to
keep their economies afloat. Because of budget
strictures, the bilateral donors have been increasingly
linking their level of assistance to economic reform,
particularly those supported by the IMF. The Sub-
Saharan African countries have limited financing
alternatives. Provided the adjustment programs are
maintained, their emphasis on free markets, fiscal
responsibility, and reduced government participation
in production would be a marked departure from
traditional economic policy in many of these
countries.
Because IMF financial assistance is intended to
complement financial flows from other sources to
countries with balance-of-payments problems, the
Sub-Saharan African states probably will expect the
United States to play a major role in providing the
additional external financing that they will require
over the medium term because of their continued
serious economic problems. The additional financing
probably will take the forms of special funds for Sub-
Saharan Africa, increased financial resources for
multilateral financial institutions including the IMF,
and higher levels of bilateral economic assistance.
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Zimbabwe:
Agriculture in Transition
NR
Zimbabwe roughly matched its second-best year for
agricultural exports in 1984 despite a drought that
continued for a third straight year, and appears likely
to do even better this year. Although farmers'
optimism has grown with the return of normal rains,
several new government initiatives have surfaced that
threaten to change Harare's enerally pragmatic
agricultural policies.
NR
Agriculture at Independence
At independence in 1980, Zimbabwe inherited a
robust agricultural sector. The country was an
exporter of beef, corn, cotton, and tobacco, and was
self-sufficient in nearly all food crops. Commercial
agriculture contributed 17 percent of GDP, and
exports of primary and processed agricultural goods
accounted for between 40 and 50 percent of foreign
exchange earnings, according to an academic study.
The farming industry supplied one-third of the inputs
used by manufacturing, and stimulated the
development of a domestic fertilizer industry.
Commercial agriculture also was the largest wage
employer of blacks. NR
Rhodesian farms fell into three main groups: about
5,000 to 6,000 medium- to large-scale white
commercial farms, some 14,000 small-scale black
freehold farms, and 675,000 black farms on tribally
owned land. White commercial farmers produced
some 75 percent of total agricultural output.
NR
Rhodesian agricultural policies and institutions relied
heavily on government intervention in marketing, and
favored the interests of commercial farmers over those
producing from tribally owned land:
� Corn, wheat, cotton, soybeans, beef, and milk were
marketed at fixed prices through parastatals. Prices
were negotiated annually before the planting season
by farm organizations and government officials.
Among the major commercial crops, only tobacco
was sold by auction, and even tobacco marketing
was heavily regulated.
13
� The consumer prices of corn, vegetable oil, milk,
beef, and wheat were kept below producer prices for
the benefit of urban dwellers, necessitating
government subsidies.
� Regulations governing the use of foreign exchange
to import raw materials and machinery were based
on plans negotiated between farmers and the
government.
� Half of the agricultural land was reserved for white
commercial farmers, with the remainder set aside
for the far more numerous black farmers. White
farmers generally owned the more fertile land.
� Agricultural research, credit, and extension services
were geared mainly to the needs of the commercial
farmers.
A New Emphasis
In contrast to much of black Africa, Zimbabwe has
maintained a favorable economic environment for
commercial farming since independence. Harare has
sought to increase agricultural production by
improving infrastructure and incentives for small-
scale farmers without damaging those available to
large-scale commercial farmers:
� Producer prices have been raised significantly,
including more than doubling the price of corn.
� Small holders have been given greater access to
agricultural credit, marketing channels, and
extension services.
� Sunflower and millet, which are produced by small
holders, have been added to the list of commodities
with guaranteed minimum prices.
� A resettlement program has been launched to move
black farmers from tribally owned land onto
freehold land in areas previously reserved for
whites.
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� Devaluation of the Zimbabwe dollar by 50 percent
since independence has made the country's
agricultural exports more competitive.
Moreover, consumer prices have been increased more
than producer prices for maize, beef, milk, vegetable
oil, and wheat, thus lowering the cost of government
subsidies. NR
The benefits expected from these new policies were
largely offset by drought and higher input costs,
including dramatic increases in fertilizer costs, and
the introduction of a minimum wage for farm
laborers. Rainfall averaged only 60 to 70 percent of
normal from 1982 to 1984. Nevertheless, agricultural
export performance since independence has been
impressive, with unprocessed agricultural products
alone accounting for about 40 percent of total exports
last year.
NR
Black farmers have increased their share of corn and
cotton production dramatically. At independence,
black farmers produced only 10 percent of the
marketed corn and 18 percent of the cotton crop.
Black farmers last year raised their share of marketed
corn and cotton production to about 40 percent. The
increase in their share of corn production partly
reflected late rainfall that favored their planting cycle
over that of the white commercial farmers, but also
demonstrated the benefits of Harare's improved
incentives for small-scale farmers.
NR
Implications of Proposed Reforms
Government proposals over the past year for
restructuring the agricultural sector have had an
adverse impact on commercial farmers, and on white
commercial farmers in particular. NR
Late last month, a new land acquisition bill that
would radically alter landowners' preindependence
rights was introduced into Parliament. The bill
provides that the government would no longer be
required to pay compensation for "abandoned"
property, compensation would no longer be required
in foreign currency, the state would be granted the
right of first refusal on all rural land sales, and
compensation would no longer be based strictly on a
free market price, but could be adjusted by the
government to reflect public interests. Another
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families in four years.
14
Zimbabwe: Agricultural Export Million US $
Earnings, 1980-84
(except where noted)
Crop
1980
1981
1982
1983
1984
Total
386
547
463
419
472
Tobacco,
flue cured
179
309
248
224
280
Cotton _
89
87
68
73
94
Meat
21
7
6
11
39
Sugar
74
80
69
52
41
Coffee
11
14
19
19
18
Corn
12
50
53
40
0
Percent of
total exports
27
39
36
37
44
. Estimated.
NR
provision would prohibit anyone who owns more than
500 acres from buying land. The white commercial
farmers, who now number only about 4,200, oppose
the bill because they believe it violates the spirit, if not
the letter, of the 1979 independence agreement. The
US Embassy reports that the bill, which probably will
come before Parliament this summer, is seen as a
major threat to commercial farmers and undoubtedly
will undermine land values and hence collateral for
bank loans.
NR
Another threat to commercial agriculture is the
government-financed resettlement program. Harare
has committed itself to resettling 162,000 families by
the end of 1985, a goal it is unlikely to meet.' The
United Kingdom continues to be the largest external
financier of resettlement and has committed nearly
$30 million to the program. Last year, however,
Mugabe and the Minister of Lands, Resettlement,
and Rural Development accused London of hindering
'The government has been able to resettle only about 35,000
NR1
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the effort and threatened to expropriate land without
compensation unless the United Kingdom is more
cooperative about releasing the funds. Discussions
between Mugabe and Foreign Minister Howe in
.January apparently resolved the issue. NR
Minister of State Kangai's announcement last month
that the government was moving to nationalize the
grain milling industry left the millers in shock.
Kangai, however, apparently based his action on a
1982 statement or government intentions and did not
have Cabinet approval.
NR
Mugabe has publicly expressed a desire to merge the
country's three farmers unions-----white commercial
farmers, black commercial farmers, and peasant
farmers------into one organization. The white
Commercial Farmers Union believes the main driving
force behind the move is the desire by the more
numerous, but less powerful, black commercial
farmers to increase their influence within the
agricultural sector, according to US Embassy
reporting. The Minister of Agriculture, a white
commercial farmer, believes the diverse needs of the
groups will prohibit any hasty government actions on
amalgamation.
NR
15
Outlook
Agricultural exports this year appear likely to be even
better than for 1984, based on Embassy and press
reporting. Moreover, improved corn yields are
expected to provide a surplus for export of 200,000 to
500,000 tons, compared to imports of more than
250,000 tons for 1984. We believe agricultural
production this year will help to boost export earnings
and play a key role in the country's economic
recovery. NR
Zimbabwe's long-term prospects are somewhat
dimmer, as Harare must decide between maintaining
its pragmatic and realistic agricultural policies or
accelerating reform of the commercial agricultural
sector. Mugabe is faced with balancing the competing
interest of a white elite, yet key economic, minority
with the postindependence demands of thousands of
land-hungry black peasants who form the base of his
ruling party. So far Mugabe has been able to avoid
making this difficult decision, but time is running out.
NR
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Africa
Briefs
7
Zambia
Copper Production
NR
The value of Zambia's copper exports�which account for 90 percent of foreign
currency earnings is likely to improve slightly in 1985, according to US Embassy
reporting. Copper prices are expected to rise marginally from depressed 1984
levels, and, barring labor unrest or new shortages of spare parts or fuel, copper
production could increase. A slight rise in copper sales, coupled with devaluation,
already has boosted revenues for Zambian copper producers, who announced a $23
million profit for the fourth quarter of 1984. The copper producers had suffered a
net loss for the corresponding quarter in 1983. Although Zambia's copper revenues
are likely to increase, much of this may be offset by higher wages after the current
labor agreement expires in August.
NR
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