ECONOMIC PROSPECTS OF PORTUGAL'S AFRICAN STATES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01099A002100030008-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 16, 2016
• Document Release Date: March 31, 2005
• Sequence Number: 8
• Content Type: NSPR

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~r vd Fo Re ase 2005/Q4/1 CIA-RD 1 by Lucinda es and partner a ter ortugal-is the chief of considerable investment from South.
and David Hughes
Of Portugal's three main territories in
Africa, one-Guinea Bissau-is already
independent, a second-Mozambique-is
well on its way toward independence,
while the third-Angola .has yet to begin
the'process. But some sort of decoupling
of all three from Portugal seems in-
evitable.
In terms of their economic prospects,
Angola has the brightest future. Mozam-
bique follows not far behind, while
Guinea-Bissau is a poor third.
Although Portugal is divesting itself
of these territories, its
M4ernbtque
economic influence seems likely to persist
for a number of years. Portugal has given
the three a common monetary and
payments system, a well-integrated credit
system, a preferential trade market, and a
centralized development plan. Portuguese
companies own most major manufac-
turing and transportation facilities and
conduct the bulk of external trade and
domestic commerce.
Rich Resources in Angola
Rich agricultural and mineral resources
have enabled the Angolan economy to
grow at an annual rate of 1 I percent in re-
cent years. Oil production has averaged
170,000 barrels per day in 1974, 90 per-
cent from the exclave of Cabinda.
Angola produces diamonds and iron
market for Angolan coffee and an impor-
tant customer for its oil.
Angola's Benguela railroad is of
economic importance to neighboring
Zaire and Zambia. It handles half of their
copper exports and a good share of their
imports, Mozambique's relations with its white
Sporadic outbreaks of civil unrest have neighbors.
had only a minor economic impact. Restrictions are not likely to be placed
Short-term credit is scarce, but most on South African and Rhodesian shipping
retail establishments are functioning nor- over Mozambique transport routes, at
malty. Shortages are due more to hoard- least until the new government in Lourcn-
ing than to production. or distribution co Marques consolidates its power.
problems. Pretoria and Salisbury, for their part, say
Foreign exchange and banking restric- they are willing to cooperate with an in-
tions imposed by the Portuguese govern- dependent black government in Mozam
ment and a depressed real estate market bique.
have slowed the emigration of whites, Sharply higher wage demands have
because they find it impossible to take become an urgent problem. Widespread
more than a fraction of their holdings strikes have caused production losses and.
with them. Nonetheless, some loss of have delayed loading and unloading at the
managerial and technical skill is in- harbors.: The continued emigration of
evitable as they emigrate. In the transition whites will leave the blacks largely tin,
to independence, Angola must develop prepared to manage the modern sector of
these skills before the country's rich the economy.
economic potential can be realized. Few Resources in Guinea-Bissau
Varied Resources in Mozambique Guinea-Bissau is the poorest of the
Economic development in Mozam- three territories, and its economic
bique will be fostered by the territory's prospects are the dimmest. Most of its
varied agricultural resources and major population is engaged in subsistence
transport facilities. At present, the agriculture, with rice the main crop.
economy is
agriculture, mainly cashew nuts, cotton,
and sugar. Diverse, though generally
low-grade, mineral resources remain
largely unexploited, but world price
trends probably will work in favor of their
profitable development.
Mozambique is heavily dependent on
earnings from tourism, wages repatriated
by migratory labor,' and transportation
services provided to South Africa and
Rhodesia. The territory's railroads and
ports handle almost all of Rhodesia's
foreign trade and about one fourth of
South Africa's. In 1973, these services,
plus income from tourism and the
repatriated wages of 100,000 workers in
based on commercial Production of cash crops--notably
Africa, primarily for the $500-million
Cabora Bassa hydroelectric power plant.
These economic facts will affect the at-
titude of the emerging black leaders in
Mozambique. These black leaders have.
voiced cautious attitudes toward altering-
peanuts--has been disrupted by years of
fighting. Many white merchants have left,
and commerce will be further, set back
with the departure of the colonial army,
which is an important customer.
Bauxite deposits-- still on-
developed-are the country's only known
mineral resource. (C)
ore in substantial quapt fpou i$ eleisah2905C/ kb8J:rff2 , P00099A002100030008-4
the world.'s largest Spffee producers. The million in foreign exchange.
US-the territory's leading trading Mozambique has been the beneficiary