SUB-SAHARAN AFRICA: MAJOR ISSUES IN AFRICAN-US ECONOMIC RELATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00589R000200270005-2
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 42
• Document Creation Date: December 22, 2016
• Document Release Date: April 19, 2011
• Sequence Number: 5
• Publication Date: June 1, 1985
• Content Type: REPORT

Directorate of
Intelligence
Sub-Saharan Africa:
Major Issues in
African-US Economic Relations
Confidential
ALA 85-10061
June 1985
Copy 3 9 5
-- - --- --L
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 iILI I I
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
f Confidential
Directorate o
Intelligence
Sub-Saharan Africa:
Major Issues in
African-US Economic Relations
Operations.
This paper was prepared byl the
Office of African and Latin American Analysis. It
was coordinated with the Directorate of
Division, ALA,
Comments and queries are welcome and may be
directed to the Chief, Regional Issues Branch, Africa
Confidential
ALA 85-10061
June 1985
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Sub-Saharan Africa:
Major Issues in
African-US Economic Relations
Key Judgments In the near term, there are two key issues-South Africa and aid-that
Information available magnify the importance to the United States of its relatively small
as of 30 May 1985 economic ties with Sub-Saharan Africa:
was used in this report.
? The US economic stake in South Africa is a controversial political issue
because it is widely viewed in black Africa as bolstering the racist policies
of the white government. South Africa is by far the largest US export
market in Sub-Saharan Africa, although bilateral trade has declined
since 1980. Almost one-half of US investment on the subcontinent is in
South Africa, even though US investment in the country has stagnated
since 1980. Private US lending to South Africa has tripled since 1980 to
more than $4.6 billion in 1984, almost 40 percent of total US lending to
the subcontinent. We foresee a moderate reduction in the overall US
economic stake in South Africa during the remainder of the 1980s
because we believe the likelihood of slow economic growth in South
Africa will reduce the opportunities for US investment and exports. A
continuation or worsening of black unrest and violence in South Africa
could lead to a further decline in South African-US trade and to a falloff
in investment and lending.
? US economic aid to Africa has tripled since the mid-1970s to an overall
average of more than $730 million annually; disbursements by multilat-
eral agencies totaled almost $12 billion during 1980-83, of which the
annual US contribution was approximately $400-500 million. We expect
that most Sub-Saharan countries will remain heavily dependent on US
and other Western aid for many years and that African requirements just
for food and other emergency aid-in addition to aid needed to stimulate
economic growth-will continue to increase.
In addition to these two critical areas, there is a second tier of economic is-
sues that come into play in bilateral and regional dealings with Sub-
Saharan Africa:
? US purchases of African minerals will continue to center on the
reliability of South Africa as a supplier. Although other Sub-Saharan
countries in the aggregate provide a number of minerals, the United
States could adjust reasonably well to a cutoff from any of these smaller
producers. While any major mineral disruption would be painful in the
short run, over the longer term, technological advances and growing
mineral production in such non-African LDCs as Brazil and China will
enable manufacturers to substitute cheaper raw materials for at least
some African minerals.
Confidential
ALA 85-10061
June 1985
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
? US imports of African oil make Nigeria the most important US
economic partner in Africa aside from South Africa, but the United
States has reduced its oil purchases from Nigeria by more than three-
fourths since 1980 and, therefore, its vulnerability in the event of
economic or political disruption there. The potential does exist, neverthe-
less, that any major move by Lagos could send shock waves to other
OPEC producers. US oil imports from Angola, Cameroon, Congo,
Gabon, Ivory Coast, and Zaire combined now exceed those from Nigeria,
largely because US oil companies have increased their investment in
those states. Even so, the continuing surplus of oil on the world market
makes a recovery in Nigerian-US oil trade or further significant
increases in US oil imports from other African producers unlikely before
1990, in our view.
? The US trade position in Africa has improved sharply. The United States
has cut its trade deficit with Sub-Saharan Africa by more than one-half
since 1980 largely because of the steep decline in US oil imports from Ni-
geria. Any significant additional improvement in the US trade deficit
with Sub-Saharan Africa is unlikely, however, because there is little
further room to reduce the trade deficit with Nigeria-which totaled
only about $2 billion in 1984-and because US businesses will find it in-
creasingly difficult to compete in African markets against European and
Japanese exporters as a result of the high price of the US dollar in terms
of African currencies. US exporters also face long-established trade
patterns that enable European countries to dominate most African
import markets, resulting in a net flow to Europe of funds earned by Af-
rica from exports to the United States.
? The US debt exposure in Africa has increased since 1980, as has the vul-
nerability of US lending institutions to late repayment of loans by
African states; the debt service ratios of many Sub-Saharan countries
have risen to at least 40 percent. The consequences for the United States
have been limited by the small size of both African-US trade and African
debt to US lenders and by a combination of rescheduling agreements and
IMF financial help to African countries.
Confidential iv
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
In our judgment, all of these issues will continue to affect African-US
relations to one degree or another for much of the next decade. Over the
longer term, as now, we expect that relations with South Africa-including
dependence on minerals-and Africa's need for foreign aid will be the
dominant issues, in no small part because of their political overtones.
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2 -
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Key Judgments iii
US Dependence on African Raw Materials 2
Agricultural Commodities 5
US Debt Exposure in Africa
Prospects and Implications for the United States
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2 --
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Mediterranean Sea
o. Cage Verde
~Prala
The Gtmbja
aniu
Ivory Togo
Coast Ghana
Abidjan Accra
Equatorial Guinea/
Sao Tome and Principe. ,r
Sao Tome
South
Atlantic
Ocean
Central African
Republic
Zambia
Lusaka
Namibia
*
Windhoek
Bujumbur
Shaba
Region
Gaborone
Harare
Pretoria
Mbabane
South Sw,
,,,,~~Mgser
Africa \tIs ho
Addis Ababa
Ethiopia
jibouti
hiibout
Boundary representation to
not neceeearily authoritative.
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Sub-Saharan Africa:
Major Issues in
African-US Economic Relations
In our view, the significance of African-US economic
relations is less a function of the levels and fluctua-
tions of trade, investment, lending, and aid than of a
few key issues. This paper analyzes what we believe
are the major issues and assesses the effects of
economic trends since 1980 on US interests in Sub-
Saharan Africa.' The paper also explores the pros-
pects for US economic equities in Africa during the
remainder of the decade and discusses, as appropriate
on particular issues, the African political context.
South Africa is by far the largest US export market in
Sub-Saharan Africa (see table 1),1 but bilateral trade
with Pretoria has declined since 1980 (see table 2)
because South Africa has been grappling with foreign
exchange shortages and economic austerity. US ex-
ports to South Africa, which totaled $2.4 billion in
1980, fell to about $2.3 billion in 1984, still account-
ing for slightly more than half of total US exports to
all Sub-Saharan countries combined.' A noticeable
dropoff in the sale of US transport equipment and
machinery and other manufactured goods-from $1.8
billion in 1980 to $1.4 billion in 1984-stood behind
the overall export decline. On the import side, the
1980-82 economic recession in the United States
temporarily cut US demand for South African miner-
als and metals. US imports of such products from
South Africa have recovered since 1982 but were still
' In this paper, the terms "Sub-Saharan Africa" and "Africa" refer
to all of the continental and island countries off the coast of
Africa-including South Africa-except the northern countries of
Algeria, Egypt, Libya, Mauritania, Morocco, Sudan, Tunisia, and
Western Sahara.
dix C.
' Except where otherwise indicated, the statistics and other factual
data in this paper were derived from official publications of the
United States, other OECD countries, and Sub-Saharan African
countries and from a number of DI publications that report on
down by 30 percent in 1984 compared with 1980.
Overall US imports from South Africa totaled about
$2.5 billion in 1984-consisting of a diversified mix of
raw and semifinished commodities-placing Pretoria
as a very close second among Sub-Saharan countries
to Nigeria, which registered $2.6 billion in sales to US
markets.
Although US investment in South Africa has stagnat-
ed since 1980, official statistics show that the net book
value of US direct investment in South Africa equals
at a minimum about $2.3 billion and accounts for
almost one-half of total US investment in Sub-
Saharan Africa. US citizens and firms own as much
as an additional $8 billion in stocks in South African
mining companies, according to estimates by a South
African firm. Moreover, European subsidiaries of US
firms also have substantial direct investments in
South Africa. Over 300 US firms own branches,
subsidiaries, or affiliates in South Africa.
Because of its lucrative domestic market, which is the
largest in Sub-Saharan Africa, South Africa is the
only Sub-Saharan country in which the value of direct
investment by US companies in manufacturing and
services (more than $1.5 billion) is greater than that in
minerals or petroleum production for export (less than
$1 billion). Indeed, according to the South African
press and US Embassy reporting, US companies lead
in South African markets for high-technology items
such as computers and are major competitors with
European and Japanese companies in large segments
of the consumer and capital goods markets, such as
automobiles, home appliances, petroleum products,
farm and construction machinery, and manufacturing
technology, plant, and equipment. Large US mineral
companies also have major investments in South
African mining and minerals processing, and two 25X1
major US petroleum companies own and operate
refineries in South Africa.
i1-; -1- Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Importance of US Economic Ties
to Sub-Saharan Africa
African-US economic relations are relatively small,
from the US perspective, but they loom large for most
Sub-Saharan African countries, a reflection of the
vast difference in size between the US economy and
Sub-Saharan Africa:
? Sales to the United States account for almost one-
third of Sub-Saharan exports, and export indus-
tries are the main source of employment outside of
subsistence agriculture and the civil service in most
Sub-Saharan countries.
? Sub-Saharan countries also rely on the United
States for 10 to 15 percent of their imports (see
table 18).
? The United States is the primary source of foreign
investment in Angola and Liberia and is an impor-
tant secondary source in about 20 other Sub-
Saharan countries.
? US aid programs are particularly important in
agricultural research, development, and investment
designed to improve farm productivity and rural
living conditions in Africa, where farming is still
the principal livelihood for the great majority.
Sub-Saharan Africa also benefits from economic
relations with the United States to the degree that US
trade, investment, lending, and aid contribute to
African economic and political development. Al-
though the contribution to political stability is large-
ly intangible and unquantifiable, we believe that US
aid has been crucial to the economic survival of
drought-stricken countries such as Kenya, Mozam-
bique, Niger, and Somalia. Moreover, US lending
probably has been critical to rescuing the Zairian
Government from insolvency. The year-to-year eco-
nomic performance of Nigeria, South Africa, Zaire,
Zimbabwe, and other oil- and mineral-exporting
countries is also affected by cyclical economic fluctu-
ations in the United States and other Western coun-
tries and Japan.
South African foreign debt owed to private US
institutions such as banks has tripled since 1980 to
more than $4.6 billion in 1984, almost 40 percent of
total US lending to all Sub-Saharan African coun-
tries. Press reports indicate that only about $340
million of the South African debt consists of loans by
US banks to the government and to government-
owned companies such as the South African Electric-
ity Supply Commission; US bank loans to private
South African businesses account for most of the
debt. Lending by US Government agencies to Pre-
toria has not been significant.
Pretoria has repeatedly applied tough economic aus-
terity measures since the early 1970s in order to
reduce import demand and the need for foreign
borrowing because it fears that heavy foreign debt
would provide a potential source of leverage to foreign
critics of the South African racial system. At the
same time, Pretoria has long sought to encourage the
expansion of US trade and investment in South Africa
in order to gain access to US goods and investment
and also, we believe, to gain respectability for the
regime and to discourage Washington from taking
punitive economic measures.
The broad issue of US dependence on Sub-Saharan
raw materials has arisen on several occasions over the
past decade in the context of three specific subjects:
? The wisdom and feasibility of economic sanctions
against South Africa.
? Armed incursions and turmoil in the Shaba Region
of Zaire in 1977 and 1978.
? Recurring problems of political instability in
Nigeria.
According to international trade statistics, the most
important Sub-Saharan suppliers of minerals to the
United States are South Africa and Zaire; the largest
Sub-Saharan supplier of crude oil to the United
States is Nigeria. Twelve other Sub-Saharan coun-
tries supply significant quantities of nonoil minerals,
25X1
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 - 1
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
crude oil, and agricultural commodities to the United
States. US strategic interests are also affected by the
reliability of mineral supplies to key allies. In this
regard, Western Europe and Japan depend on these
15 plus seven other African countries for a broad
range of specialized raw materials.
Minerals
South Africa accounts for about 90 percent of non-
Communist production of platinum, two-thirds of
gold, about 60 percent of vanadium, one-half of
chromium, and one-fourth of manganese and dia-
monds, according to the US Bureau of Mines. This
makes South Africa the dominant Sub-Saharan-
indeed, world-supplier of these six minerals to the
United States, Western Europe, and Japan (see tables
3 and 4). The United States relies on South Africa for
one-half or more of its supplies of chromium and
platinum and roughly one-fourth of its industrial
diamonds, manganese, vanadium, tin ore, and fluor-
spar. South Africa also is the world's third-largest
uranium producer and, together with Namibia, which
is still under South African control, is a major source
of uranium for the United States, the United King-
dom, and West Germany. The United States, the
United Kingdom, West Germany, and Japan depend
on South Africa for asbestos. South African nickel
supplies are important to the United States, Belgium,
France, and West Germany.
The South African Government's public statements
indicate that it is well aware of the importance of its
mineral exports to the United States and other OECD
nations, and, we believe, Pretoria feels confident that
this dependence will play an important role in any
Western policy discussions about the possible use of
economic sanctions to increase the pace of racial
reform in South Africa. We believe that raising the
level of Western minerals dependence is an important
South African policy objective.
Raw material production is not limited to South
Africa. Ten other Sub-Saharan countries-Botswana,
Congo, Gabon, Guinea, Liberia, Madagascar, Nige-
ria, Zaire, Zambia, and Zimbabwe-are also impor-
tant sources of nonoil minerals for the United States
and other Western countries. Zimbabwe shares South
Africa's mineral richness on a smaller scale and is an
important source of chromium, vanadium, asbestos,
and nickel. Zaire is an important source of cobalt for
the United States and most other Western and Japa-
nese industrial users. Zaire also supplies copper, tin,
and manganese to Western Europe and is one of the
world's largest producers of industrial diamonds.
Zambian copper and cobalt-from the same ore 25X1
reserves that extend into Zaire-make up a signifi-
cant share of Japanese and US imports of these
metals. Other mineral dependence includes:
? Nigeria is an important source of US columbium
imports.
? Guinea is a major source of bauxite for the United
States, France, and West Germany.
? Western countries and Japan look to Congo and
Gabon for manganese, to Liberia for iron ore, and to
Madagascar for chromium.
? Botswana has joined South Africa, Zaire, and the
USSR as one of the world's four major producers of
diamonds since the opening of a new large diamond
mine there in 1982.
International trade statistics show that US imports of
most Sub-Saharan minerals have fluctuated from
year to year, depending on the ups and downs of the
business cycle. Even though these short-term move-
ments are important, longer term trends are also at
work. The most significant long-run change in US
dependence in recent years has been, in our judgment,
a decline in reliance on Zairian cobalt since the 1978 25X1
invasion of Shaba and the resulting upsurge in world
cobalt prices. US industries have substituted alterna-
tive materials and technologies for a number of cobalt
applications and have increased cobalt imports from
Zambia. Consequently, US consumption of cobalt has
declined by roughly one-fifth, and Zairian production
has dropped by about one-fourth.
Crude Oil
According to international petroleum statistics, Nige-
ria has slipped from second to a distant sixth among 25X1
worldwide sources of US oil imports since 1980. US
oil imports from Nigeria totaled over $11 billion at
their peak in 1980, more than one-half of the total
value of Sub-Saharan exports of all commodities to
the United States at that time. By 1984, however, the
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Ten of the 14 non-oil minerals imported in significant
quantities by the United States from Sub-Saharan
Africa have been identified by the US Geological
Survey as being "strategic" to US industry. The 10
are:
? Chromium, manganese, vanadium, nickel, columbi-
um, and cobalt, which are used in the alloying of
steel and nonferrous metals to increase strength
and resistance to corrosion, heat, and abrasion.
Many of these alloys are used in military applica-
tions such as jet engines and airframes.
? Platinum, which is used as a catalyst in the chemi-
cal and petroleum industries, in emission controls
on automobiles, and in glass production.
? Aluminum (produced from bauxite) and tin, which
are used mainly in the manufacture of finished
products for both civilian and military uses.
? Gold, which is used in electrical connections in
advanced technological products such as computers
and in dentistry, coinage, jewelry, and glass produc-
tion as well as a speculative commodity on interna-
tional foreign exchange markets
? Fluorspar is used in the manufacture of hydro-
fluoric acid, which is the key ingredient in the
flourine chemicals used in the aluminum,.flouro-
chemical, and uranium industries. It is also used in
ceramics, glassmaking, and in the iron and steel
industry.
? Diamonds and asbestos are used, respectively, for
applications that require extremely hard cutting
surfaces such as drill bits and for heat insulation.
While none of these minerals is irreplaceable in the
long run, all are critical to existing industrial pro-
cesses. Substitute materials and technologies are
available for a number of the industrial applications
in which Sub-Saharan minerals are employed, but
Western countries and Japan have no readily avail-
able domestic ore reserves that could be developed
quickly to produce equal quantities at comparable
costs. Although many of the substitutes could find
their way into commercial processes fairly quickly if
sharp price increases for Sub-Saharan minerals were
to provide sufficient economic stimulus, such changes
would result in substantially increased production
costs in most cases.
Of the four "nonstrategic" mineral imports:
? Antimony is used in batteries and is alloyed with
lead for use in industrial chemical pumps and
pipes, tank linings, roofing sheets, and cable
sheaths.
United States had cut its imports of Nigerian oil to
less than $3 billion. This decline was the result of the
sharp drop in US demand for imports of crude oil
from about $62 billion to less than $37 billion over the
same period, Nigeria's reluctance during 1980-82 to
lower its oil prices to make them competitive with
those of other international producers, and support by
the United States for the expansion of oil production
in Mexico, which is now the main US source of oil
imports.
The United States has also diversified its sources of
Sub-Saharan oil. US oil companies have almost dou-
bled their combined investment in Angola, Cameroon,
Gabon, Ivory Coast, and Zaire since 1980 to about
$1.2 billion (see table 5), despite a decline in the pace
of investment in these countries since 1983 as a result
of the surplus of oil on world markets. As a result, US
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
oil imports from these countries and Congo have
almost tripled during this period to about $4.4 billion
in 1984. Angola-where US oil companies dominate
the petroleum sector-and Congo, Gabon, and Ivory
Coast accounted for more than 80 percent of the
increase. Cameroon and Zaire also increased exports
of crude oil to the United States.
Agricultural Commodities
Except for dependence on cocoa, US dependence on
African agricultural commodities has declined slight-
ly since the mid-1970s, but agricultural imports from
Africa still are important to the United States, West-
ern Europe, and Japan (see tables 6 and 7). For
example:
? The United States, Western Europe, and Japan are
dependent on African supplies of robusta coffee,
which are used to produce instant coffee and to
blend with better quality South American grades of
arabica coffee. The major African exporters are
Cameroon, Ivory Coast, Kenya, Uganda, and Zaire;
Indonesia is the only significant non-African world
exporter of robusta coffee. In addition, Ethiopia
exports arabica coffee, including minor amounts to
the United States.
? High-quality cocoa from Cameroon, Ghana, Ivory
Coast, and Nigeria is important to US and Europe-
an chocolate manufacturers.
? Kenya supplies over 10 percent each of tea imports
by the United States and the Netherlands and about
one-third of the tea imported by the United
Kingdom.
? The United States and European countries rely on
the Comoros, Madagascar, and Tanzania for cloves
and vanilla.
In addition, there are a number of products from Sub-
Saharan Africa that are important to European mar-
kets alone. Mauritius and Reunion, for example,
supply about one-third of French sugar imports, and
European countries depend heavily on Cameroon,
Gabon, Ivory Coast, and Liberia for tropical hard-
woods for their housing and furniture industries.
Some African states have attempted to protect and
increase their commodity exports by participating in
international marketing arrangements such as those
for coffee, cocoa, and copper, and African sugar
producers have applied strong diplomatic pressures to
try to protect their quotas in the US sugar market. US
demand for African commodities generally has been
driven by market forces, however, which are beyond
the control of marketing arrangements or African
governments.
A review of international trade statistics shows that
the United States has significantly reduced its trade
deficit with the subcontinent from more than one-half
of the total US foreign trade deficit with all countries
in 1980 to only about 6 percent in 1984. The main
reason for the reduction-of $7.2 billion-in the US
trade deficit with Africa was an $8.6 billion decline
during this period in US imports of Nigerian oil.
The US trade position in the Sub-Saharan market,
compared with that of other OECD countries, has
improved since 1980, although the US trade deficit
with the subcontinent remains-at $6.4 billion in
1984-the largest of any OECD country. The com-
bined trade deficit of other OECD countries in Sub-
Saharan Africa increased from $1.5 billion in 1980 to
$1.6 billion in 1984.
Total Sub-Saharan imports from all OECD countries
fell from $42.3 billion in 1980 to $27.6 billion in 1984
(see table 8) mainly because of a combination of
falling export earnings and the rise in Sub-Saharan
expenditures for debt service, which reduced the
amount of foreign exchange available for purchasing
imports. The increases in oil prices in the late 1970s,
which forced the net oil-importing African countries
to transfer foreign exchange expenditures from manu-
factured goods exported by OECD countries to petro-
leum from OPEC countries, also contributed to the
decline.
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
The US share of the Sub-Saharan import market
increased from about 13 percent in 1980 to 16 percent
in 1984, in part because a sharp rise in the cost of US
dollars in terms of most African currencies kept the
dollar value of US exports of machinery and transport
equipment high despite a decline in sales. Another
factor was high US food exports, which accounted for
about one-fifth of total Sub-Saharan imports from the
United States, a substantially greater percentage than
from any other OECD country. Food has been the
only nonoil category of Sub-Saharan imports to in-
crease since 1980, largely as a result of drought and
other food production problems in African countries.
US Debt Exposure in Africa
The LDC debt crisis, although largely centered in
Latin America, has called attention to US bank
exposure in Africa as well. According to financial
statistics, US private and official lenders hold about
15 percent of Sub-Saharan African foreign debt,
which totaled over $75 billion in 1983, the latest year
for which detailed data are available (see table 9). If
preliminary bank statistics are any guide, we believe
that Sub-Saharan debt continued to grow in 1984 and
probably now exceeds $85 billion.' South Africa,
Nigeria, Ivory Coast, and Zaire accounted for almost
three-fourths of the $11.7 billion owed to US private
and official agencies in 1983 and for more than one-
half of the total Sub-Saharan foreign debt owed to all
lenders worldwide. No other Sub-Saharan country
owed over $500 million to the United States, and
about 30 of the 45 African countries owed less than
$100 million each to US lenders.
Private US banks and companies accounted for three-
fourths of total US lending to Sub-Saharan African
countries in 1983, of which over one-half went to
South Africa and almost one-fourth to Nigeria. Of
the debt owed to US Government agencies, Zaire
owed over $850 million-the largest official exposure
by Washington in Sub-Saharan Africa.
We believe that these estimates of Sub-Saharan foreign debt are
conservative. Nigerian debt, for example, may have totaled $22-23
billion in 1983, according to Embassy reporting, compared with our
gascar exceeded 80 percent.
South Africa's debt service ratio (the percentage of
export earnings required to meet medium- and long-
term principal payments plus interest payments on
debt of all maturities) is relatively low-about 15
percent-but for many other Sub-Saharan countries
the burden of servicing foreign debt has increased
sharply since 1980 (see table 10). The debt service
ratio exceeded 20 percent for 20 African countries in
1983, compared with only seven countries in 1980.
Ten countries-Guinea-Bissau, Ivory Coast, Mada-
gascar, Malawi, Senegal, Somalia, Togo, Uganda,
Zaire, and Zambia-faced debt service ratios of
almost 40 percent or more, and the ratio for Mada-
Debt service problems induced 13 Sub-Saharan coun-
tries to sign rescheduling agreements with Washing-
ton, other Western governments, and Western banks
in 1983 and 1984. Ten of these countries, plus three
that did not reschedule, also signed agreements to
acquire standby loans from the IMF.
Aid has been an overriding issue in African-US
relations since shortly after World War II. The
United States is the second-largest bilateral donor of
economic aid to Sub-Saharan Africa (after France),
the largest source of funding to multilateral aid
institutions, and the largest source of emergency aid
to Africa, according to official government statistics.
The US budget for economic aid to Sub-Saharan
Africa during fiscal year 1985 totals about $790
million. In addition, the US Congress agreed in
March 1985 on emergency appropriations of $400
million in food aid to famine-stricken African nations
and $150 million for disaster and refugee assistance to
Aside from emergency aid, most US economic aid
programs, according to policy statements by adminis-
tration officials, are directed toward four goals that
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
are designed to stimulate economic stabilization and
reform and to increase food production. These
include:
? Inducing African governments to cut budget defi-
cits, reduce bloated bureaucracies, abandon unreal-
istic exchange rates, and enact other economic
reforms that are essential to regain economic
growth.
? Encouraging African governments to increase pri-
vate-sector economic incentives, particularly for the
small farm owners who make up the largest group in
the African private sectors.
? Strengthening institutions such as agricultural ex-
tension agencies in order to increase the effective-
ness of development initiatives.
? Improving donor coordination in order to reduce
duplication of effort and competition among donors
for scarce manpower.
At present, about 60 percent of US development
assistance is earmarked for the agricultural sector.
Much of the remainder of US aid disbursements is
designated for economic support to help ease balance
of payments and to relieve the debt burdens of
African countries. Thirteen countries have been tar-
geted for these economic support funds this year:
Botswana, Chad, Djibouti, Kenya, Mauritius, Niger,
Senegal, Seychelles, Somalia, Sudan, Zaire, Zambia,
and Zimbabwe. The United States also has made
available additional funding for programs in support
of policy reform in Mali, Malawi, Rwanda, and
Zambia.
Besides normal reviews of the role and strategies of
aid in promoting economic development, the United
States has initiated programs designed to increase the
importance of private US investment in stimulating
economic growth in African countries. Cameroon,
Senegal, and Zaire, for example, have signed formal
agreements, called Bilateral Investment Treaties, with
the United States that provide a number of legal
guarantees to potential investors, including protection
against nationalization without due compensation and
free transfer of profits and dividends. Ivory Coast,
Liberia, and a number of other African countries are
considering similar treaties, according to Embassy
reporting.
African policymakers in a number of countries are
taking steps encouraged both by US aid programs and
by the IMF to improve economic incentives to farm-
ers, turn government enterprises over to private
hands, and adjust unrealistic foreign exchange rates:
? Mali, Senegal, and Zambia have been leaders
among African countries over the past several years
in reducing governmental involvement in grain mar-
keting in order to improve farm prices.
? Among the most recent examples of "privatization"
have been steps being taken by Tanzania to disman-
tle the government-owned Tanzania Sisal Author-
ity, which has allowed sisal production in Tanzania
to decline from about 230,000 metric tons annually
in the mid-1960s to less than 50,000 tons in 1984,
according to Embassy reporting. In Togo, foreign
entrepreneurs have taken over from the government
the former National Steel Mill and the country's oil
refinery within the past year, and other foreign
firms are investigating investment possibilities in the
state-owned textile, marble, recording, dairy, and
fruit-processing industries, according to Embassy
reporting.
? IMF standby agreements signed by Zaire, Zambia,
and a number of other African countries have
included arrangements for devaluations.
The decline in Africa's economic performance has
continued despite disbursements of more than $15
billion in economic aid to Sub-Saharan countries by
the United States and multilateral agencies since
1980. Aid has not overcome the debilitating effects of
unfavorable climatic conditions, poor natural re-
sources, warfare, political instability, limited human
training and education, and ill-conceived government
policies that have restrained private economic incen-
tives and opportunities. As a result, economic growth
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
across the subcontinent has averaged less than 1
percent annually so far in the 1980s, and per capita
income has declined to less than the level in 1970,
according to World Bank statistics.
Key Issues
In our view, of all these issues, South Africa and the
region's need for foreign aid will dominate relations
with the United States for much of the next decade.
We expect a moderate reduction in South African
economic ties during the remainder of the 1980s,
although South Africa is likely to remain the focal
point of nonoil US investment and trade in Sub-
Saharan Africa. A slow decline in South African
production of gold-the country's major export-will
induce Pretoria to keep a tight rein on economic
growth (unless large increases in gold prices occur)
and thereby slow the expansion of the South African
consumer market and reduce opportunities for foreign
investment and for sales of finished consumer and
capital goods to South Africa by US business. In our
judgment, however, South African nongold mineral
exports to the United States are likely to continue to
regain lost ground as long as the US economy records
strong growth. Pessimistic market assessments based
on political considerations could lead to the shelving
of planned US investments or the sale of existing
assets in South Africa by US companies and to
reduced lending by US banks to Pretoria. In any
event, Pretoria's conservative approach to financial
management will probably cap the extent of South
African debt. Although US lending to South Africa
probably represents the most secure US debt exposure
in Africa in terms of South Africa's solid track record
in repaying debt on time and its moderate debt service
ratio, the security of these loans would be reduced in
the event of widespread violence or a reduction in the
ability of the Afrikaner elite to maintain control.
The Sub-Saharan region's demand for US economic
aid is almost certain to continue increasing in the
years ahead. In the near term, aid deliveries will be
needed to replenish seed stocks and to tide drought-
stricken African populations over until new crops are
harvested. Even after the current drought subsides,
many Sub-Saharan nations will continue to depend on
foreign aid to meet food needs. Funding requirements
for infrastructure development as well as balance-of-
payments support will also remain high.
We doubt whether aid alone will significantly improve
Africa's bleak economic prospects during the remain-
der of this decade. To date, aid programs have been
unable to bring about sustained improvement in most
of the deficiencies in African education, skills, or
physical plant and equipment. The political pressures
that have spawned counterproductive economic poli-
cies in many African countries will continue to slow
reforms needed to improve economic incentives and
productivity, thereby reducing the impact of aid
programs.
Questions of aid, however, go beyond just the econom-
ic benefits and into the area of East-West competi-
tion. In our view, the economically depressed African
states will seek aid and other Western capital with
promises to make Western-oriented policy reforms
and economic adjustments, in some cases playing off
the need for assistance against threats of turning to
the Soviet Bloc for help. Such an opportunistic process
is already under way in formerly hardcore leftist
states such as Guinea, Benin, and Congo. Whether
closer links are established with the West depends in
no small measure on the perceived gains and losses
that each country views as associated with Western
assistance.
Secondary Issues
This is not to say that the remaining issues of raw
material dependence, the US trade position in the
region, and debt levels will not draw attention in the
years ahead. Indeed, these are areas that always have
the potential to flare up or to attract long-term policy
attention-such as that currently devoted to Africa's
debt problems-and affect African-US dealings.
25X1
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
exist.
For all practical purposes, US reliance on Sub-
Saharan Africa for strategic minerals will continue to
center on the reliability of South Africa as a supplier.
Although other Sub-Saharan countries in the aggre-
gate provide a large number of raw materials, the
United States could adjust reasonably well to a cutoff
from any of them. None of them provides nearly as
wide a range of raw materials as South Africa, and
only Zaire and Zambia dominate Western imports of
any single commodity-cobalt, for which substitutes
Some factors point toward a possible slackening of
US/Western dependence on Sub-Saharan Africa's
nonoil minerals by the end of the decade:
? Mineral exploration projects now under way in such
LDCs as Brazil and China may result in the
development of alternative sources for a number of
minerals now obtained from Africa, such as colum-
bium, manganese, fluorspar, and antimony.
? Technological advances may slow the rate of in-
crease in US demand for some African minerals.
New production techniques and operating processes
enable manufacturers to substitute cheaper raw
materials or synthetics for some metals and to use
existing metals more efficiently. The development of
fiber optics and of satellite transmission systems, for
example, probably will result in a sharp reduction in
the consumption of copper in communications sys-
tems. Processes such as multiplexing, which enables
users to send multiple conversations through a single
wire, will reduce demand for additional wire
hookups.
? Technologies such as composites, rapid solidification
technology, hot isostatic pressing, and powder met-
allurgy could permit engineers to replace traditional
strategic metals with new materials in the event of
sharp price increases for African minerals.
? Increased recycling-in part an offshoot of techno-
logical advance-is likely to lower the demand for
raw materials. For example, the US National Min-
erals Advisory Board estimates that technological
innovations could make possible within 10 years the
recycling of 5 percent of the chromium used in US
metallurgical applications, 6 percent of that used for
chemical purposes, and 65 percent of that used in
linings of US metallurgical furnaces.
Looking beyond strategic minerals to oil supplies, few
analysts project any serious implications for US oil
imports from conditions in Sub-Saharan Africa. The
decline in US dependence on oil imports from Nigeria
already has reduced sharply US vulnerability in the
event of economic or political disruption there. Even
though US oil imports from other Sub-Saharan
sources have increased, total US oil imports from the
subcontinent are likely to remain at the current
relatively insignificant level-only about 1 percent of
US oil consumption in 1984-for the foreseeable
future, barring a major disruption in the Persian Gulf.
We believe that the trends established so far in the
1980s in US relations with the oil-producing Sub-
Saharan states are likely to continue through the end
of the decade, but at a more moderate pace. Nigeria's
attention over the past year or so to keeping its oil
prices competitive will end the erosion of Lagos's
competitive position against other world suppliers,
slowing the decline in the share of Nigerian oil in the
makeup of US oil imports. At the same time, the
continuing oil surplus on world markets reduces the
chance that foreign oil companies will resume the
high pace of investment in new African oilfields
outside of Nigeria that they recorded early in the
1980s. Even so, the experience that US oil companies
have gained in Africa probably has given many of
them confidence that they can weather instances of
African political instability without major damage to
the profitability of their operations. We expect that
financially pressed African states will continue to
welcome oil exploration by US and other foreign oil
companies in the hope of striking it rich; exploration is
under way in a fairly large number of African
countries that do not now produce oil.
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
The generally unfavorable international market out-
look for agricultural commodities means that Sub-
Saharan African producers are likely to fall further
behind Latin and Asian producers that are able to
expand and diversify their export production. African
sugar producers, for example, will have increasing
difficulty competing against Brazil and other Latin
producers to maintain exports to the shrinking US
market, where sugar consumption is declining as a
result of the successful marketing of sweeteners de-
rived from corn. Tanzania and Madagascar have little
chance of regaining world dominance in clove exports
against growing Indonesian competition. A number of
African coffee producers, such as Angola, Ethiopia,
and Zaire, which have suffered from years of internal
conflict and economic mismanagement, are unlikely
to gain ground in international coffee markets. As a
result, we believe that African countries will be
unable to depend on agricultural commodity exports
as in the past to fuel economic growth.
Any major further improvement in the US trade
position with Sub-Saharan Africa will be highly
unlikely, in our judgment. There is little room for
additional large reductions in the US trade deficit
with Nigeria in view of the relatively small size of the
current deficit-about $2 billion in 1984 compared
with more than $10 billion in 1980-and the Nigerian
push to maintain its oil prices at competitive levels.
Moreover, the high price of the US dollar in terms of
African currencies will continue to diminish the at-
tractiveness of US-manufactured goods against com-
petitive products from Europe and Japan. US food
exports to Sub-Saharan countries will probably be at
concessionary prices under the terms of aid agree-
ments. US exporters also face long-established trade
patterns that enable European countries to dominate
most African import markets, resulting in a net flow
to Europe of funds earned by Africa from exports to
The skyrocketing foreign debt service obligations
since 1980 of many African countries have increased
the vulnerability of US private and public lending
institutions to late repayment of loans. The long-run
implications of this vulnerability are more serious for
the United States than the immediate consequences:
? In the short run, African borrowers will be able to
meet contracted repayment schedules through a
combination of rescheduling agreements and IMF
financial help. The smallness of African debt to US
lenders limits the consequences for US banks and
financial institutions.
? Over the longer term, we doubt that the existing
system of debt rescheduling and IMF agreements
will enable Sub-Saharan countries to rid their econ-
omies of onerous debt burdens or to resume higher
growth because these financial mechanisms do not
address the inherent weaknesses of African econo-
mies, such as scarce resources, small markets, and
poor prospects for exports. As a result, Sub-Saharan
countries will be likely to look to the United States
and other Western countries for increasing amounts
of aid to deal with their debt problems and to
stimulate growth.
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 ill.l.....I.
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Appendix A
The US Economic Stake in Africa
Africa.
US economic interests in Sub-Saharan Africa are
quite small as a proportion of total US foreign trade,
investment, lending, and aid. According to official
economic statistics, the region accounts for about 3
percent of total US imports, 2 percent of US exports,
3 percent each of the stock of US foreign direct
investment and foreign lending, and 15 percent of net
bilateral aid disbursements. The United States also
provides substantial additional aid through multilater-
al institutions, which since 1980 have channeled about
15 percent of their disbursements to Sub-Saharan
US trade with Sub-Saharan Africa has fallen by more
than one-third since 1980, but investment, lending,
and aid have all increased:
? Reduced US oil imports from Nigeria and a one-
fifth decline in US trade with South Africa-the
two largest US trading partners in Africa-
accounted for virtually all of the drop in US-African
trade.
? US oil companies led the increase in investment, but
this began to taper off last year because the soft oil
market had reduced incentives to expand
production.
? A $3.2 billion increase in South African borrowing
from private US banks and companies accounted
for most of the rise in US lending to Africa.
and balance-of-payments situations.
? Aid disbursements rose as a result of a strong
increase in US efforts to help African countries
reverse their worsening food production, budget,
Trade
Ten of the 45 US trading partners in Sub-Saharan
Africa accounted for almost 90 percent of the $15
billion in Sub-Saharan trade (exports plus imports)
with the United States during 1984 (see table 11).
These included the region's seven principal oil-
producing countries-Nigeria, Angola, Congo, Cam-
eroon, Gabon, Ivory Coast, and Zaire; Ethiopia, be-
cause of the delivery of two new Boeing passenger
aircraft to Ethiopian Airlines in mid-1984 and of
emergency food to victims of the drought; Zambia,
because of increased US imports of copper and cobalt;
and South Africa, where US companies have a large
economic stake. Total trade by the United States with
the other 35 African trading partners equaled only
$1.7 billion in 1984.
Primary products from Africa and finished goods
from the United States account for over 90 percent of
bilateral trade flows. The United States imports
petroleum, minerals, metals, coffee, cocoa, sugar,
rubber, tobacco, vanilla, cloves, and tea from the
subcontinent. In return, the United States supplies
foodstuffs and finished manufactured goods such as
bulldozers, trucks, farm machinery, aircraft, and
computers (see tables 12 and 13).
The balance of trade with the United States is heavily
in Sub-Saharan Africa's favor (see table 14) because
of European dominance of African import markets.
Only eight of the non-oil-producing countries (Bur-
kina, Djibouti, The Gambia, Guinea-Bissau, Mali,
Senegal, Somalia, and Tanzania) have run trade
deficits with the United States consistently since
1980. These countries have been unable to increase
exports enough to offset rising food imports from the
United States. South Africa and a small number of
other countries have experienced periodic fluctuations
from surplus to deficit and back.
Investment
All but three of the top 10 recipients of US invest-
ment in Sub-Saharan Africa are among the top 10 US
trading partners there (see table 15). The exceptions
25X1
25X1
-T-- Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2 -
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
are Congo, Gabon, and Ethiopia, where the domi-
nance of long-established French (Congo and Gabon)
and Italian (Ethiopia) companies and hostile govern-
ment policies toward foreign private investment (Ethi-
opia) have tended to limit opportunities for and the
interest of US investors.
The net book value' of US direct investment in Sub-
Saharan Africa declined slightly to $5.2 billion in
1983, the latest year for which detailed data are
available, because of the impact of the weak oil
market on the willingness of US oil companies to
maintain their rate of investment in Africa. Nearly
one-half of US investment in Sub-Saharan Africa in
1983 was in South Africa, and about one-third more
was distributed among the seven principal oil-
producing Sub-Saharan countries. A substantial
number of African countries have attracted only a few
million dollars each in US investment.
South Africa is the only Sub-Saharan country in
which US investment is distributed widely throughout
the manufacturing, mining, and services sectors
of the economy. In the rest, most US investment is
concentrated in facilities to extract and export oil and
other minerals. Nonetheless, the increased wealth that
has accompanied earnings from oil exports by the oil-
producing countries has begun to increase the attrac-
tiveness of investment in nonoil industries in these
states as well. For example, US construction, manu-
facturing, and service companies have expanded sig-
nificantly in Nigeria, and total US investment in the
Nigerian economy equals about $500 million despite a
steep decline in the inflow of US investment there
following the drop in oil revenues during the past few
years. In Congo, exports from US plants and from the
European corporate affiliates of US companies domi-
nate the small Congolese farm machinery market,
according to Embassy reporting.
Ghana, Liberia, Kenya, and Zambia are the only non-
oil-producing Sub-Saharan countries aside from
South Africa with more than $100 million each in US
' Net book values are the cumulative values of holdings on compan-
ies' accounts and generally reflect the cost after depreciation of
investment and reinvestment of earnings less liabilities. While we
believe that net book values are subject to a large degree of error
and are likely to understate current values of investment, we have
used them in this report because they are more uniformly defined
direct investment. In Kenya, US automobile and
other manufacturing companies own assembly plants,
and affiliates of US banks, hotel chains, and other
service companies are located there and in Liberia.
The US stake in Liberia is also based on rubber
production and minerals extraction and in Ghana and
Zambia largely on minerals. As in the oil-producing
Sub-Saharan states, US companies in these countries
have invested in transportation and other services to
serve their production facilities.
US corporations are also prominent in Botswana,
Namibia, and Zimbabwe. Mining is the principal US
investment in all three countries, but US corporate
affiliation in manufacturing, petroleum processing
and distribution, and services in Zimbabwe is second
among Sub-Saharan countries only to that in South
Africa, though a distant second. A substantial propor-
tion of US corporate names in Zimbabwe, Botswana,
and Namibia reflect investment initiatives by the
South African affiliates of US companies.
Although some Sub-Saharan countries have discour-
aged and in a few cases nationalized US-owned
facilities because of their perceptions of "imperialist"
or "neocolonialist" behavior by the United States,
most have recognized the potential benefits of foreign
investment and are open to additional projects. Ango-
la, Ghana, and Liberia accommodate and encourage
US firms that are their major sources of foreign
exchange.
Aid
US net bilateral economic aid to Sub-Saharan Africa
has averaged about $730 million annually during
1980-83, three times the level in the mid-1970s (see
table 16). At current rates, the Sub-Saharan countries
are absorbing about 15 percent of total US bilateral
economic aid, although they represent less than 1
percent of the population of all developing countries.
The top five recipients of US-African economic aid
have been Kenya, Zaire, Liberia, Somalia, and Zam-
bia-in that order-together having received almost
one-half of the total disbursed in Sub-Saharan Africa
by the United States since 1980.
25X1
25X1
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2 -
 Ai-
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Liberia has fared best on a per capita basis, with its
inhabitants annually gleaning nearly $35 each from
the United States during 1980-83. Seychelles was the
second-largest recipient of US bilateral aid on a per
capita basis, but its very small population-only about
66,000-skew these data, in our judgment, although
most of the other top per capita aid recipients also had
small populations of I million or less. Even so,
Somalia, Zambia, and Senegal-with populations of
more than 6 million each-have also been among the
major per capita beneficiaries during 1980-83.
Multilateral institutions have disbursed almost $3
billion annually (excluding standby and other balance-
of-payments aid by the IMF) to Africa during 1980-
83, of which the annual US contribution was approxi-
mately $400-500 million (see table 17). Five of the top
10 recipients of multilateral aid-Somalia, Kenya,
Senegal, Tanzania, and Zaire-were also among the
top 10 beneficiaries of US bilateral aid. The disburse-
ment of multilateral aid has been more diffuse than
US bilateral flows, with the top 10 African beneficia-
ries receiving only about one-half of total multilateral
assistance to the area. On a per capita basis, many of
the small-population countries that ranked among the
top US bilateral aid recipients-Botswana, The Gam-
bia, Lesotho, Mauritius, Seychelles, and Swaziland-
were also major multilateral per capita beneficiaries.
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 III I ___ _ I
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86TOO589ROO0200270005-2
Confidential
Appendix C
Statistical Tables
Table 1 Table 2
South African Share of Sub-Saharan South Africa-United States:
Economic Ties With the United States a Trade, Investment, and Loans
Sub-Saharan
Africa
South Africa
(billion US $)
Billion US $ Percent
US imports
10.7
2.5
23
US exports
4.3
2.3
53
US investment
5.2
2.3
44
US loans
11.7
4.6
39
a Export and import data are for 1984, and investment and loan
data are for 1983.
1980
1984
South African exports
3.5
2.5
Of which:
Raw and semifinished
minerals and metals
2.0
1.4
South African imports
2.4
2.3
Of which:
Machinery and transport
equipment
1.4
1.1
Other manufactured
goods
0.4
US investment
2.4
2.3
US loans
1.4
4.6
a Export and import data are for 1984, and investment and loan
data are for 1983.
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86TOO589ROO0200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Table 3
Sub-Saharan Africa:
US Mineral Dependence by Country a
South Africa
Madagascar
Chrome ore and
41
76
Chrome ore and 4
concentrates
concentrates
Manganese ore and
30
7
Manganese ore and 23
concentrates
concentrates
Tin ore and
15
28
concentrates
i
Ant
mony ore and
6
13
concentrates
Platinum b
57
38
Gem diamonds b
23
13
Industrial diamonds b
25
21
Asbestos
5
6
Fluorspar
27
25
Zaire
a Percent of total US imports of each mineral. South Africa for its supplies, would increase US dependence on
b Data do not reflect accurately the degree of US dependence on South Africa for this mineral to almost 60 percent in 1983.
South African diamond and platinum supplies and on Zairian Similarly, Zairian cobalt purchased by the United States from
cobalt because of marketing arrangements that channel a portion of Belgium would increase US dependence to 52 percent in 1983.
these minerals through third countries. The addition of US plati-
num imports from the United Kingdom, which relies exclusively on Source: US Bureau of Mines.
Confidential 18
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Table 4
Sub-Saharan Africa: Primary Mineral
Dependence by Western Europe and Japan, 1983 a b
Belgium France Netherlands United West Japan
Kingdom Germany
Nickel 7 6 3 2 5 1
Zaire
Percent of total imports of each mineral. for example, indicate that Belgium imports substantial quantities of
b Data do not reflect accurately the degree of European and South African chrome ore, vanadium ore, and asbestos, but such
Japanese dependence on Sub-Saharan minerals both because of imports are not listed in Belgium's trade data.
marketing arrangements that channel a portion of these minerals
through third countries and because of deficiencies in available Sources: European and Japanese trade statistics.
trade data. Industry sources available to the US Bureau of Mines,
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Table 5 Million US $ Table 6
Sub-Saharan Africa: Sub-Saharan Africa: Primary Agricultural
US Investment and Dependence by the United States a
Oil Imports
Invest-
m
nt
US Oil
Im
t
Invest-
t a
US Oil
I
t
b
e
por
s
men
mpor
s
Ni
ria
18
11
209
2
516
2
559
3
ge
,
.
,
.
Non-Ni
erian
NA
1
624
9
1
182
4
393
0
g
,
.
,
,
.
Of which:
An
ola
26
531
1
178
888
0
g
.
.
Con
o
NA
87
1
26
670
0
g
.
.
Cameroon
205
566
6
400 b
930
0
.
.
Gabon
133
276
5
121
921
0
.
.
Zair
164
163
6
169
315
0
e
.
.
Ivor
Coast
135
0
288
669
0
y
.
a Investment data are for 1983.
b Estimated.
Ivory Coast
13
28
Nigeria
6
4
Sugar
8
1
Mauritius
1
0
Cloves
81
50
Madagascar
24
33
Tanzania
56
0
Vanilla
86
82
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Table 7
Sub-Saharan Africa: Agricultural Dependence
by Western Europe and Japan, 1983 a
Belgium
France
Netherlands
United
Kingdom
West
Germany
Japan
Cameroon
1
6
3
1
2
2
Kenya
3
1
2
7
6
NEGL
Tanzania
1
1
0
1
4
2
Uganda
1
4
4
10
2
3
Zaire
1
7
1
1
1
NEGL
Ghana
1
3
2
21
7
38
Mauritius
1
20
0
0
0
0
Wood (in the rough)
16
85
50
48
41
Congo
1
2
0
0
4
NEGL
Gabon
1
34
9
0
4
NEGL
Ivory Coast
4
36
6
24
11
NEGL
Liberia
1
4
3
16
7
NEGL
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Table 8
Sub-Saharan Africa:
Imports From OECD Countries
OECD
42.3
27.6
United States
5.2
4.3
Other OECD
37.1
23.3
Canada
0.5
0.4
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86TOO589ROO0200270005-2
Confidential
Table 9
Sub-Saharan Africa:
Foreign Debt, 1983
Total
US Exposure a
Total
US Exposure a
Foreign
Foreign
Debt
Total
Official
Private
Debt
Total
Official
Private
Ivory Coast
6,046
630
85
545
Botswana
457
39
23
16
Zaire
4,495
927
852
75
Burkina
430
-
NEGL
-
Zambia
3,254
340
220
120
Mauritius
422
48
14
34
Kenya
2,902
382
213
169
Mozambique
317 b
-
30
-
Cameroon
2,513
318
114
204
Burundi
259
-
NEGL
-
Tanzania
2,200
192
123
69
Central African
250
-
4
-
Senegal
1,909
87
35
52
Republic
Madagascar
1,786
-
23
-
Swaziland
244
-
10
-
Zimbabwe
1,780
258
28
230
Rwanda
213
-
I
-
Congo
1,689
56
8
48
Chad
196
NEGL
NEGL
0
Ghana
1,635
199
185
14
Lesotho
182
-
NEGL
-
Guinea
1,317
117
93
24
The Gambia
167
-
NEGL
-
Mali
1,130
-
5
-
Guinea-Bissau
142
-
NEGL
-
Somalia
1,125
-
145
-
Comoros
80
-
NEGL
-
Ethiopia
1,063
-
136
-
Seychelles
59
-
NEGL
-
Gabon
1,011
171
8
163
Djibouti
49
-
NEGL
-
Malawi
864
108
33
75
Equatorial Guinea
5 b
-
-
-
Togo
882
-
3
-
Reunion
1 b
-
-
-
a Data that are unavailable (indicated by "-") for exposure by
private US banks total $211 million, 2 percent of total US exposure
by private institutions in Sub-Saharan Africa.
b Data exclude official debt owed to foreign governments other than
the United States.
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86TOO589ROO0200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Table 10
Sub-Saharan Africa:
Foreign Debt Service
Million
Us$
Percent a
Million
US$
Percent a
Million
US$
Percent a
Million
Us$
Percent a
Madagascar b
85.0
17
321.1
86
Benin
8.9
2
63.0
19
Guinea-Bissau
3.2
16
12.8
51
Chad
2.4
3
11.3
19
Zaire b
403.6
19
724.2
47
Mauritius
46.1
8
82.8
17
Malawi b
99.4
27
135.5
45
Burkina
23.0
11
28.2
16
Ivory Coast b
1,003.8
27
1,237.1
44
Burundi
9.7
12
20.1
16
Somalia b
23.2
11
106.8
40
Ethiopia
42.4
7
93.7
16
Togo b
73.4
14
127.9
40
Ghana d
134.6
10
145.5
16
Uganda
17.7
5
159.1
40
South Africa
3,845.9
15
2,981.1
16
Senegal c
249.9
32
282.9
37
Gabon
441.0
18
329.9
15
Zambia b
427.6
29
468.9
37
Central African
3.6
2
21.9
14
Congo
136.9
13
413.3
34
Republic d
Mali d
34.9
13
73.9
34
The Gambia d
7.0
10
12.6
13
Zimbabwe
54.7
3
497.3
34
Liberia
38.6
6
62.8
13
Sierra Leone b
60.7
23
56.8
28
Botswana
39.9
5
82.3
11
Tanzania
151.4
21
203.2
27
Comoros
0.4
3
1.9
9
Kenya
277.1
13
407.3
25
Seychelles
9.9
11
5.9
8
Niger b
103.6
16
'108.0
25
Swaziland
22.2
6
29.5
8
Guinea
120.2
21
139.1
24
Lesotho
5.7
2
24.9
7
Cameroon
248.9
12
387.2
23
Rwanda
7.5
4
8.1
5
Nigeria c
986.6
4
2,879.7
21
Djibouti
3.4
3
5.2
4
a Ratio of total debt service (medium- and long-term principal
payments plus interest payments on debt of all maturities) to
exports of goods and services.
b Countries that rescheduled foreign debt and signed IMF extended
fund or standby agreements in 1983 or 1984.
c Countries that rescheduled foreign debt in 1983 or 1984.
d Countries that signed IMF agreements in 1983 or 1984.
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Table 11
Sub-Saharan Africa: Trade With the United States a
Total
South Africa
Nigeria
Angola
Congo
Cameroon
Gabon
Ivory Coast
Ethiopia
Madagascar
Uganda
Senegal
Botswana
Somalia
Sierra Leone
Mauritius
African
Exports
African
Imports
Total
Trade
Percent
18,855.3
5,243.8
24,099.1
100.00
3,549.0
2,446.2
5,995.2
24.88
11,316.1
1,143.0
12,459.1
51.70
558.8
110.9
669.7
2.78
95.2
21.8
117.0
0.49
638.3
89.7
728.0
3.02
293.0
48.0
341.0
1.41
302.9
184.7
487.6
2.02
91.1
71.9
163.0
0.68
96.9
7.4
104.3
0.43
131.4
11.6
143.0
0.59
9.5
41.0
50.5
0.21
105.0
20.3
125.3
0.52
0.6
55.8
56.4
0.23
80.0
20.8
100.8
0.42
54.8
21.7
76.5
0.32
African
Exports
African
Imports
Total
Trade
Percent
10,710.4
4,276.3
14,986.7
100.00
2,547.3
2,317.1
4,864.4
32.46
2,599.6
554.2
3,153.8
21.04
1,038.6
84.0
1,122.6
7.49
998.2
10.9
1,009.1
6.73
752.7
67.6
820.3
5.47
684.0
34.9
718.9
4.80
477.8
60.0
537.8
3.59
85.0
175.6
260.6
1.74
74.2
41.4
115.6
0.77
99.3
3.3
102.6
0.68
3.0
96.0
99.0
0.66
58.9
16.4
75.3
0.50
1.0
72.0
73.0
0.49
40.4
19.6
60.0
0.40
49.1
7.6
56.7
0.38
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Table 11
Sub-Saharan Africa: Trade With the United States a (continued)
Tanzania
Togo
Mozambique
Malawi
Rwanda
Swaziland
Burkina
Guinea-Bissau
Chad
The Gambia
Mali
Benin
Lesotho
Burundi
Djibouti
Namibia
Reunion
Central African
Republic
Comoros
Equatorial Guinea
Niger
African
Exports
African
Imports
Total
Trade
Percent
34.4
61.7
96.1
0.40
16.7
19.1
35.8
0.15
112.8
69.1
181.9
0.75
29.0
3.7
32.7
0.14
70.4
5.4
75.8
0.31
64.6
0.7
65.3
0.27
0.3
20.3
20.6
0.09
0.2
22.6
22.8
0.09
NEGL
1.9
1.9
0.01
0.1
4.5
4.6
0.02
0.5
6.7
7.2
0.03
NEGL
14.9
14.9
0.06
0.2
0.9
1.1
NEGL
42.1
2.9
45.0
0.19
NEGL
11.6
11.6
0.05
10.0
15.0
25.0
0.10
7.2
1.6
8.8
0.04
8.3
0.7
9.0
0.04
3.3
0.2
3.5
NEGL
NEGL
NEGL
0.1
0.01
NEGL
11.3
11.3
0.05
African
Exports
African
Imports
Total
Trade
Percent
12.0
39.3
51.3
0.34
37.1
14.2
51.3
0.34
25.1
20.7
45.8
0.31
31.6
3.3
34.9
0.23
17.4
8.7
26.1
0.17
25.0
1.1
26.1
0.17
NEGL
21.8
21.8
0.15
1.0
20.0
21.0
0.14
NEGL
14.2
14.2
0.09
NEGL
14.2
14.2
0.09
1.0
13.1
14.1
0.09
NEGL
12.0
12.0
0.08
1.0
10.9
11.9
0.08
2.0
9.8
11.8
0.08
NEGL
7.6
7.6
0.05
3.0
3.3
6.3
0.04
5.0
1.1
6.1
0.04
3.0
1.1
4.1
0.03
2.0
1.0
3.0
0.02
1.0
0.4
1.4
0.01
NEGL
1.1
1.1
0.01
a Excluding Cape Verde.
b Estimated.
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Table 12
Sub-Saharan Africa: Selected
Commodity Exports to the United States
Of which:
Petroleum
37.8
12,834.1
6,952.3
Nigeria
37.2
11,209.2
2,559.3
Cameroon
0
566.6
930.0
Gabon
0
276.5
921.0
Angola
0
531.1
888.0
Congo
0
87.1
670.0
Ivory Coast
0.6
0
669.0
Zaire
0
163.6
315.0
Minerals and
197.0
2,681.9
1,951.5
Zambia
1.7
202.4
121.1
Guinea
0.1
93.8
115.6
Zimbabwe
0.1
23.4
50.2
Liberia
17.2
40.8
28.4
Sierra Leone
1.4
12.5
10.9
Nigeria
2.9
21.8
4.4
Coffee
329.3
620.1
519.2
Ivory Coast
60.1
93.0
188.4
Uganda
45.8
131.2
102.0
Kenya
11.2
11.8
31.2
Sierra Leone
3.6
11.8
26.4
Madagascar
14.4
63.8
15.6
Cameroon
20.0
43.9
14.4
Rwanda
0
65.0
14.4
Zaire
8.1
30.4
2.0
Angola
64.1
26.9
1.2
Burundi
21.1
41.8
1.2
Ivory Coast
25.0
178.7
219.6
Ghana
84.9
40.1
18.5
Nigeria
17.7
72.5
17.5
Sugar
15.6
254.0
85.1
Mauritius
2.2
33.9
16.4
Zimbabwe
0
7.8
13.1
Mozambique
0.3
65.4
_
12.0
Malawi
0
16.0
10.9
South Africa
13.1
130.9
32.7
Rubber
26.7
77.5
65.5
Tobacco
0.1
18.2
23.6
Malawi
0.1
8.2
19.2
Zimbabwe
0
10.0
4.4
Tea
14.5
18.0
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Table 13 Million US $
Sub-Saharan Africa: Selected Commodity
Imports From the United States
Grain
70.3
685.0
946.9
Finished manufactured 9
goods
66.1
3,975.7
2,516.7
Machinery and 6
transport equip-
ment
00.5
2,449.4
1,740.0
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Table 14
Sub-Saharan Africa: Trade Balances
With the United States
Total
13,611.5
6,434.1
South Africa
1,102.7
230.2
Togo
-2.4
22.9
Nigeria
10,173.2
2,045.4
Mozambique
43.6
4.4
Angola
447.9
954.6
Malawi
25.3
28.3
Congo
73.4
987.3
Rwanda
65.0
8.7
Cameroon
548.6
685.1
Swaziland
63.9 a
23.9
Gabon
245.0
649.1
Burkina
-20.0
-21.8
Zaire
216.8
413.4
Guinea-Bissau
-22.3
-19.0
Ivory Coast
118.2
417.8
Chad
-1.9
-14.2
Ethiopia
19.2
-90.6
The Gambia
-4.4
-14.2
Zambia
106.8
37.1
Mali
-6.2
-12.1
Others
Benin
-14.9
-12.0
Liberia
35.7
2.2
Lesotho
-0.7 8
-9.9
Guinea
61.6
81.8
Burundi
39.2
-7.8
Zimbabwe
22.9
7.6
Djibouti
-11.6
-7.6
Kenya
-70.6
-5.5
Namibia
-5.0 a
-0.3
Madagascar
89.5
32.8
Reunion
5.6
3.9
Uganda
119.8
96.0
Central African Republic
7.6
1.9
Senegal
-31.5
-93.0
Comoros
3.1
1.0
Ghana
87.8
1.1
Equatorial Guinea
NEGL
0.6
84.7
42.5
Niger
-11.3
-1.1
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2 __ _
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86TOO589ROO0200270005-2
Confidential
Table 15
Sub-Saharan Africa:
Net Book Value of US Direct Investment
Total
4,218
4,881
5,531
5,189
South Africa
2,350
2,619
2,513
2,319
Nigeria
18
219
492
516
Cameroon
205
115
325-
400-
Ivory Coast
135
283
419
288
Liberia
335
258
213
252
Ghana
166
178
180
181
Angola
26
201
375-
178
Zaire
164
140
173
169
Kenya
125
120
131
144
Zambia
138
142
146
140
Gabon
133
144
163
121
Botswana
NA
NA
92
96
Zimbabwe
27
47
52
44
Tanzania
20
29
30
41
Niger
42
14
37
36
Senegal
18
22
25
29
Congo
NA
NA
51
26
Malawi
18
23
22
17
Namibia
32
28
17
14
Chad
Other
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86TOO589ROO0200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Table 16
Sub-Saharan Africa: Net Disbursements of Bilateral
Official Development Aid by the United States a
1974-76 1983 1980-83
Annual Average Total
(million US $) (million US $) Total Per Capita
(million US $) (US $)
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Table 16
Sub-Saharan Africa: Net Disbursements of Bilateral
Official Development Aid by the United States a (continued)
1974-76 1983 1980-83
Annual Average Total
(million US $) (million US $) Total Per Capita
(million US $) (US $)
1 13 43 18.53
a Countries for which data are not available or for which no aid has
been provided include Cape Verde, Equatorial Guinea, Namibia,
Sao Tome, and South Africa.
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Table 17
Sub-Saharan Africa: Multilateral
Economic Aid Disbursements a
1980
Total
1983
Total
1980-83
(million US $)
(million US $)
Total
(million US $)
Per Capita
(US $)
Zimbabwe
46
68
326
10.94
Ghana
108
47
322
6.67
Uganda
73
100
321
5.78
-r- Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86TOO589ROO0200270005-2
Confidential
Table 17
Sub-Saharan Africa: Multilateral
Economic Aid Disbursements a (continued)
1980 1983 1980-83
Total Total
(million US $) (million US $) Total Per Capita
(million US $) (US $)
Togo
71 62 184 17.29
Benin
58 45 180 12.61
Liberia
62 41 176 22.42
40 24 105
22 23 104
17 29 87
Gabon
9 16 51 11.59
Seychelles
6 3 25 98.04
a Data include disbursements by OPEC countries. Countries for
which data are not available or for which no aid has been provided
include Cape Verde, Equatorial Guinea, Namibia, Sao Tome, and
South Africa.
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86TOO589ROO0200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Table 18
Sub-Saharan Africa: US Share of Foreign Trade
Million US $
Share of African
Countries Trade
(percent)
Ivory Coast
303
11
Major nonoil producers
3,910
24
South Africa
3,549
26
African imports from the
United States
5,244
11
Million US $
Share of African
Countries Trade
(percent)
371
19
2,332
22
2,099
22
4,276
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
 Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2
Confidential
Confidential
Sanitized Copy Approved for Release 2011/04/19: CIA-RDP86T00589R000200270005-2