NATIONAL INTELLIGENCE SURVEY 60A; ZAIRE; THE ECONOMY

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• Collection: NIS
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6%/Gs/E
Zaire
April 1,973
NA110NAL INTELLIGEN
FOR OFFICIAL USE ONLY
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CONTENTS
This Generai Survey 4upersedes the one dated Sep.
tember 1970, copies of which should k, desfroyed.
A. Economic appraisal 1
Size and wealth of naoural resources; period of
military and civil unrest following independence;
relative stability after 1965, importance of mining
sector; decline of agriculture; importance of
foreign aid; re-versal of nationsklization policy,
B. Structure of the economy 3
Structural change. Increasing Importance of
copper.
1. Metals and minerals 3
Prominence among world mineral resources;
rapid postwar production expansion.
a. Copper 4
Nature and location of deposits; process-
Ing facilities; output; expansion program;
new mining concessions to foreign firms.
Fort OFFICIAL USE ONLY
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Page
b. Cobalt and zinc
a
Relation to copper processins; output.
c. Cadmium and germanium
7
Location of dep4sits; output.
d. Tin
7
Location of deposits; production facilities,
e. Columblum-tantalum
7
Production qnd use; production faefilties.
f. Cold
7
Location of deposits, production facilities
2D
and output.
g. Industrial diamonds
7
Location of deposits; production f"Itie&
and output; poaching and smuggling prac.
tical.
h. Manganese
9
Output; size and location of deposits;
factors affecting production.
22
i. Other minerals
9
Type of deposits; plan to exploit bauxite
deposit,
2. Agriculture, fisheries, and forestry
9
Effects of political situation on production
tand growth after independence.
a. L:%nd use
9
il ffect of climate and terrain on vegetation;
utilization of land; type of iand ownership.
b. Food crops for export
11
Coffee, its varieties, location, output, and
sales; tea and cocoa. location and output
of plantations.
c. Food crops for domestic consumption
11
Cassava, plantains, and carea] grains; vege.
tables and fruits; sugar. effect of civil
disturbances on output, supply and de-
mand situation.
d. Industrial crops
12
Palm oil, output, effect of 6pressed world
palm oil prictis on local production, palm
oil extraction process, uses, foreign sales;
cotton, location, output, projected further
development, government price Increases;
rubber, type of cultivation and location,
production and export.
e. Livestock
13
Ownership; location of herds size of
herds; beef consumption.
f. Fishing
13
Locadon of fisheries; supply and demand
of fish and fish products.
g. Forestry
14
Size and location of forest resources out-
put and export of forest products; Otgree
of government control and regulation of
cutting and reforestation.
Page
3. Fuels and power 15
Size of electric power Industry; contribution
of hydroelectric power to total power output;
government control of electric power Indus.
try; size and location of power potential and
Insbilled capacity, princilW consumers; con.
struction of Ings dam hydroelectric plant;
peroleum refining capacity; petroleurn and
natural gas deposits; sources of supply; loca.
tion and sin of cog deposits; coal output.
4. Manufacturing and construction 16
Growth since World War 11; principal manu.
facturing areas; type of products; domestic
requirements, growth of construction industry
since independence; type and source of con-
struction materls1s.
5. Domestic trade 17
Methods of distribution; condition of trans.
portation network.
C. Economic policy and development IS
1. Policy
18
Government legislation in 1966 to reduce for-
eign influence over the economy; subsequent
legislation to encourage foreign investment.
a. Government finance
18
Centralized control of public finance; in-
creased tax power of central government;
tax rates, budget expenditure; public debt;
credit developments.
b. .4oney and banking
2D
Banking system.
2. Development
20
Development plans and programs; government
priorities; dovetopment prospects; planned de-
velopment by sector; government attempts to
stimulate domestic and foreign capital; pr
and public investment in 1971.
3. Manpower
22
Size and compositior, of labor foree; unem-
ploymert problems; principal sectors of em-
ployment; labor efficiency, wages, strikes;
working conditions.
D. International economic relatious 24
1. Foreign trade 24
Crowth of exports over past few years in
relation to world copper prices; composition
of exports; sharp increase In imports, growth
of domestic demand, tasing of import restric-
tions; recent government measures to cut back
imports.
2. Balance of payments 25
Imposition -)f new controls on outflow of
income earned by foreigners; adverse balance
of balancv of payments -;,'tion, fall in export
.e A
revenues, decline in foreign exchange re-
serves.
I
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3. Foreign economic policy and agreements 25
Coverntnent trade policy; hmshnent owan-
too with the United Statu.
page
4. Foreign aid
Major donors and wnounts.
GIOXIM 27
PICURES
rage
Fig. I
Economic indicators (chart)
I
Fig. 2
Estimated gross domestic product
11
Vegetation (map)
(chart) I
3
Fig. 3
Mineral production ranking (chart)
4
Fig. 4
Production of selected minerals
(chart) I
16
(table)
4
Fig. 5
Copper mines and processing fa-
Fig.
14
cilities (map)
5
Fig. 6
Copper production and targets
(table) I.,
19
(chart)
6
Fig. 7
Industrial centers and mineral zones
(tnap I
8
Fig. 8
Agricultural production (table)
9
Fig. 9
Agricultural zones (ntap)
10
Page
Fig.
10
Land use (chart)
11
Fig.
11
Vegetation (map)
14
Fig.
12
Consumption of electric power
(chart) I
16
Fig.
13
Government revenues (table)
IS
Fig.
14
Government financial operations
(table) I.,
19
Fig.
15
Public capital budgetary expendi-
tures (table)
21
Fig.
16
Employment by sector (table)
23
Fig.
17
Foreign trade (chart)
24
Fig.
IS
Principal exports (chart)
25
Fig.
19
Direction of trade (chan)
26
Fig.
20
Balance of payments (table)
26
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A. Economic appraisal
The Repliblic of Zaire is a vast eoinitr of W5,M)
%(losare miles. efliliv.1lent ill size to that part of till
I'llited States lying vast (if the Mi River. It is
riehly e n d o%ve d %vith largely tintupped naturai
resourev%, incloding large delmsits of o,x)I)Ix-r, cobalt.
und inchistrial diamonds, and has the largest
hydrovivetriv IN)tential of any voitntry in tilt world. A
Wide range of climates permits the production of' a
variety of agricultural crops. and t1w tropical
rainforests %arbor the most exteli%ive reserves of virgin
timber in Africa.
Despite this great ruitential, [,lost of Zaire's 24
million I- )I)lv eke out only a stibsistene li i till.
vast jilt( rior, often isolati:d from (he veonoll an d
political centers h% in Invalls of' tratisporta-
tiOn -'I'd colmillinicaltion. Personal allegiance is to
farnily and tribe rather than to the abstract cmicepi o f
liati althotigh the vetitral guvvninietit is
gradijally increasing its prf-sence in the niore remote
regiotis of the cotintry, Fdocation is (Itlit li i
the mral arew. and, whcre available. foviises more
Illmn a (-lassical ctirriculmn than ml ways to improve
agricidlural prwhidion i.nd pobli l
Belgium's grantitig of ilidVIN-11dence to Zaire (then
known as the Belgian Collito and later iis the
I)etnocratic Rewiblic of the Congo) in Jime iwio
triggered .1 yv;irs of military nititinivs j ili t l -jvil
r-helliolis which threatened to Balkanize Ill( coontry
and destroy its econoln%. The at of Joseph
I)esire Mobutti (no"- nal;;ed M o I )tl t ll Sese Svko) to the
presidency in 1965 btought stability to all hot a few
areas in eastern Zaire, with a concomitant grad 11 A
concentratioti of [x)litit-al [H)%% in the
hands of the President.
K-onoinic recovery from thu 1),;Iiildependell
11pheavals has been Spectacular I)t:t inievell., trend In
several major economic indicators re shown in Figure
1. Gross domestic prodoct (CI)P) ill 1971 reached .111
estimated $2.1 hilli-,n, having increased in reid ternis
NOTE�Thu enfire content of thk Chapte. i% UNCLASSIFIED
but i% FOR OFFICIAL USE ONLY
by 25"1 over that of 1968: per capita animal jnuon,
however. is still 1 ('ss 01 $I(X). The mining sector
Contill"Ps 10 eximild, accolinting in 1971 f(jr almost
01)(1-I'mirtli of' CDP in(] providing inore dian 80('(' of
export earnings. Indti%trial produetion has risen
con siderably since 1%9, with many manufactures in
the modem sector surpassing prv-1960 otitput levels.
Prodticts are mainly light consumer goods an(]
e(iminnent and chemicals for mining and ine(albirgy.
Commercialization of agrictilture, on the other hand,
ias agged; more than 40% of ,igrictiltural prodtiction
is from subsistence farming, Progress has been made in
the prodw.4ion of palin oil, coffee, and rubber, the
principal export crops; and grejter efforts art- being
made to increase the prodtiction of iimber from Zaire's
extensive tropical rainforests,
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FIGURE 1. Economic Indicators

The governmNit has bt-vit phgued since indepen-
dence by inadequate revenues. the only vx%-i-ption
being in 1969, when copper reventivs were much
higher than anticipated. Export taxes have provided
around 60%; of total public revenue; but this
dependence upon tariffs for reveitue Makes
government finance vulnerable to fluctuations in
world trade and world market prices. The drop in
copper prices during 1971, for example, accotinted for
most of the $60 million decline in government income
from the record 1970 level, and no other sector (if the
economy has been able to fill this gal), Agricultural
output still suffers from tile severe. disruptions of tP,,
postindependence upheavals. and the small indzis
sector has only recently reached pre-INO production
levels.
Although unable to balance expenditures with
revenues, Zaire has made significant str-des in
organizing its financial operations. Most of these
efforts are part of the economic stabili: program
initiated in 1%1 with assistance from the Interna-
tional Monetary Fund (IMF) and include tit(-
presentation of a formal btidget, expansion of the tax
base, improved coliection of taxes, and tit(-
establisilment of pr(wedures for limiting expendittires.
Almost all fiscal powers are in the hands of central
authorities, with previously tincontrolled provincial
expenditures now dependent tqxon funds from
Kinshasa.
Foreign aid has been a major factor in maintaining
Zaire's economic viability by providing essential
Commodities and technical assistamv, The United
States has contributed more than $420 million, of
which $348 million consisted of stipport assistance and
P.L. 480 shipments. Belgium is another major aid
donor, having provided about $25 million annually
since 1966, primarily in the form of technical
assistance. Other sotirces of foreign aid include West
Germany, France, t:,,- World Bank, and tile United
Nations.
The main goal of the govvrainent's economic policy
consistently has been to reduce foreign economic
domination. Most industries and commercial farms
have been in foreign hands since colonial days, and
the important copper mines, although owned by the
Zairian Government, are, managed by Europeans. A
program to "Africanize" the economy�increase tile
share of ownership and skilled personnel slots held by
Congolese in foreign businesses�was launched in late
196& after Mobutu became President. A special target
has been the Belgians, who not only dominate the
modern sectors of the economy but had left Zaire with
virtually no experienced managers at the time of
2
indepetideiiee. flowever. only a few major Belgian
in(crests them the mioing fiern Mining
1.11nion )f (!plx-r Katanga (UMIIK) and the large
financial institution 0ingolese Ranking Company
(SOCOBANQUE)�huve beeii nationalizAil. Pr;vatf.
foreign investment came to a virtual halt after tit(-
takeover of U M I I K in I)evendwr 1966. and Kinsha%.4
superm.-&A rnany of the more extreme aspects of
Africanization with an investment code (enacted in
1%.9) to attract %orely CIO-e4led overseas capital.
Encouraged by tile 1l(*w code and it subsequent
c0m;lensation agreement between tile government
and UMIIK, significant amounts of private funds
were attracted during the past 3 years. U.S..
Europt-an, and Japanew! firms have decided to inv-st
nearly $400 million in expanding copper production,
which should brighten considerably Zaire's economic
prospects throu-b die latter haif of the 1970's. lit
addition, several other large overseas firms have
expressed interest in locating in the Kinshasa area and
around the Inga dam complex oil the Congo River
below Kinshasa. Africanization is tiot a dead issov,
however. and Mobtitti occasionally threatens to take
action against foreign business wilvii he helicvv%
Kinshasa's interests are not being full% considered or
%hen lie wishes to divert attention from domestic
problems.
Because of the somewhat uncertain envirminiew for
private foreign investment, the central government
has become the major factor in the determination of
further ecotiornic progress. Unforinnatel%, however,
fiscal res;wnisibihty has been lacking among many
Kinshasa officials; waste and inefficiency have greatlY
inflated btidgetaty cxisu and re(Inced ftinds available
for devvlopment. Nevertheless, public investment is tit
important t-l(!ni(-iit of the government's tota
expenditures. Budgeted capital spending by KinshaSik
dates from 1968 and is intended to operate in
accordance with the economic priorities of restoring
transportation and zgriculture. lit reality, hawevor,
the largest single allotment of funds has always gone
to the presidency, which has fav niore prestigious
projects in the mining, power, jnd manufactming
sectors.
A change in this emphasis may be fort licom i ng. The
Ministry (now Departmetit) of Plan, crealed in early
1972 and headed by President Mobutu, is to develop
and secure financi g for specific projects, primarily in
I n
the transportation and agricultural sectors. Tile
department's ability to carry out its designated
function, however, may be hampered by tile currently
tight budgetary situation resulting from a precipitous
drop in mining income. Increasing costs of
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dir nonds and cobalt, and is among the world leaders
in tire production of several other me(als. especially
copper (Fil-ure 31.
The mining industry expanded rapidly following
World War 11, and 1971 output of -several minerals
%%as at record levels (Figurr- 4). The annual val"v of
mineral producdon rofe hetween 1950 and 1956,
reaching S:38o m illi on; i 1971, output registered a
high of almost 1%525 million. This wits achieved desnite
a steady decline throughout 19�,l
in the price of
copper, which aevounts for almost three-fourths of the
total value of the annual mineral outp Z;nc, cobalt.
industrial diamomls, arid tin comprise most of the
remainder.
Zaire's mineral deposits and mining installations
c0l'stitute an extremely valuable national asset th
until -c-cent Years, was controlled and operated largely
by a Belgian holding firtr and its subsidiaries. In 1966',
after the achievement of relative stabilit within the
country, several laws were Promulgated which
progressively reduced foreign domination of the
mining sector. One law, requiring th fo.-eign
comPanies to transfer their headquarters to Kinshasa,
touched off an immediate dispute with (he majo
copper produce-, UMHK, and the company's assets
v Pre seized by the government in December 1%.6.
Oth laws canceled all concession granted prior to
independence and provided for majority control by
the government of many firms in which'it previousl
had field only a small in'terest. A few small co mp-. 1n i es
3
government operations arid declining Public revenues
may bring cutbacks i Kinshasa'-. development
program...
As a result of the ahove conditions. a i r economic
slowdown appears likely. &)mc re li e f may come I
1975 in the form of increased copper production. but
basic problem will remain. The econom i s till
unbalanced, iacorne distribution is still inequi(tible,
the domestic market is still t(to small to support large
industries, and the co)untry still depends heavily on
foreign soutces for its supply of skilled per%onnel.'The
government ha! Yet to d any determination
to switch its developmental emphasis from quick-
Profit, showcase undertakings to more fundamental
and less glamorous proj"cts in agriculture, t;ansrx)rt.t-
tion, avid education.
B. Structure of the economy
Mining plays a leading role in the Zairian ecomoiny,
While subsisten agriculture plays an unusually mint)r
role for a developing country. Since indepe'
ndence,
growth rates of the major sectois of the economy have
varied greatly, in many cases substantially it'
Itering
their relative contrihutions to GDP. T'he most
significant of these changes has been the increase in
the relative importance of mining arid commerce, art(]
the decline in commercial agriculture. Copper
revenues, whose reco)rd levels provi'ded tire major
impetus for the economic bo of the late 1960's.
grew most rapidly, averaging gains o f a 10% a
year from 1968 through 1970. Lower world copper
prices in 1971, however, substantially reduced incomie
from this source. causing the mining sector*s
contribution to GDP to drop to 23%, compared to 30%
in 1970. Commercial agriculture has never recovered
from the postindependence disruptions and has
declined to roughly 12% of GDP from a preindepen-
dence level of about one-third of GDP The share of
manufacturing arid construction in GDP rose by about
7.5% annually from 196A through 1971, while the
share of the government and services sr, remainef,
virtually unchvitged (Figure 2).
I. Metals and minerals
Mining is by far Zaire's most important ecimornic
activity, generating more than 80% of the country's
foreign exchange earnings and a substantial part of
public revenue. The mining sector employs around
60,000 laborers, or about 9% of all Zairian wage arid
salary workers. Among non-Communist coitntries,
Zaire ranks first in the production of industrial
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FIGURE 2. Estimated gross domestic product, by sector,
1971

remain in private hands, btit the central government is
clearly the dominant force in ffie mining sector.
a. Copper
Shaba Region in the southern part of the country is
Zaire's richest mineral area arid rat her
complex metal ores. High-grade coppr deposits are
found in it belf abotit 50 miles wide extending about
280 miles along the Zanibial, border: they art. it
contintiation of tit( rich Zarnbian deposits an d contain
about l2c?'r of the world's known coppe reserves. 'I'l
processing of coppvr yields not onlN copper metal but
SUCII L-0products arid h%prodncts as cobalt, lead, zilic,
germanitim. cadlilinill, gold, and silver. Most of the
tires mined in Shaba are high in inetal co llt ell I
world standards, arid estimates of proved ore deposit
point to Sliaba's continuance as a significant %%orid
supplier of copper and cobalt for at least tit( next 50
years. Reserx of tit( largest copper producer alone are
estilliated at about 18 million tons of copper inetal
occurring in 4 ore.
UNIFIK, it Belgian firm with concessions d
back to tbe early 1900's, exploited these rich deposits
lintil I jantiarN 1967, whon its Congo property %%its
taken over h% Kinsha%a's own firm, tit(- Gi-neral
Congolese Ore (*m"pany (GEX'01\1 INES.). recentiv
renamed General Quarries and Mines (.ollipall% o f
Zaire ((;E(:. 'I'lle Congolese lacked the
technical e.xpertise to nin the operation. however. and
the management in(] marketing affiliate of UMIIK.
Ceneral Ore Compativ (SG.M), was hired to keep
production arid exports at profitable levels.
(.opper mining and ore processing take place at
three locations ill Shaba J'igurc 5). 'I'll(- western
facilities around Kolwezi account foraboilt t%%o-thirds
of all copper ores, and the Kamoto mine in that area is
tile most productive in Shitba. 'I'lle inines in the
western group yield ores containing 4 to 6 copper.
'I'll(- installation ill Octobvr 1969 of a highly
antoinated ore concentration plant at Karnoto
removed a major production bottic.ieck arid has heen
responsible for rinich of the increased output since
then. I'he central group of inines, which produce
sulfurated ores, h;)s as its focal point tire smelters arid
electrolytic refineries at Likasi and Shittirti. In the
FIGURE 4. Production of selected metals and minerals
(Thousands of metric tori! unless otherwise shown)
4
1969 1970 *1971
364.1
1 9159
1966
1967
190
Copper
282.3
316. 9
320.5
326. C
Zinc
67.2
114.9
121.5
119.3
Cobalt
8.4
11.3
9.7
10.4
rin
9.3
7.2
6.6
6A
Manganese
na
2
271.6
321.8
Cold (kgs.)
10.8
5.0
-1.9
5. 3
Industrial diainonds** (million (-or-
n
14.2
12-
13.1
IIA
Columbitini-tantaluin Onetric tons).
256.0
96.0
146.0
11:3.0
na Data not available.
*Preliminary.
"Legal production only.
4
1969 1970 *1971
364.1
387.1
406.0
95.5
104.0
116.0
10.6
14.0
14 .3
6.7
6. 5
6.1
311.4
346.9
387.0
5.r
.5.15
5. t;
11.6
12.4
12.0
174.0
132. 0
114.0
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FIGURE 3. Position in the non-Communist world in
mineral production, 1970

Luenaf 7
r
FALCONBRIDGE
L
Tota re Production
1970
%-mnuru
Central
Ka nt fhill) is assunted Group
to be f ocation of
Katonto (m e).
tj Southern Group
Lubumbashi
Kipusht
Z a m a
25
Congo Z a i re
.Uebo
Kinshasa
i a
Da; es V
Mat I
alaa
Tanzania o
Area f Map
Lobitq
Ll _j
Angola Za hia
Z
Lusak: Malawi
I' bu
South-Wes o esia
Africa ire
)tswan Mozambique
Atlantic
Ocean
501117 2.73 Soul Africa ourengo Marques
FIGURE 5. Copper mines and processing facilities, 1971
Muso shinsenda
0 25 50 Miles
6 A 5 0 Kilometers
26
GECAMINES concession
usanga
Smelter
area
Other concession area
a vern
Western Group
G 0
8 7 4
8,247,546
5 r 6
Concentrator
tv Matiffel
cO
Washing plant
M 24
metric tons
tr'c 0 n s
Hydroelectric
powerplant
and smelter)
Z a i r e
Powerline
Del c mmune,
Central ro.
Central Group
rume
3,221,894
Kat n'
ajq
a a
So
Kam
South.
Southern Group
I
1,038,699
Lac
Wes t 6 rn NIZ30
Lac'de
Gro
Kakontw
de
/a iijori
%-mnuru
Central
Ka nt fhill) is assunted Group
to be f ocation of
Katonto (m e).
tj Southern Group
Lubumbashi
Kipusht
Z a m a
25
Congo Z a i re
.Uebo
Kinshasa
i a
Da; es V
Mat I
alaa
Tanzania o
Area f Map
Lobitq
Ll _j
Angola Za hia
Z
Lusak: Malawi
I' bu
South-Wes o esia
Africa ire
)tswan Mozambique
Atlantic
Ocean
501117 2.73 Soul Africa ourengo Marques
FIGURE 5. Copper mines and processing facilities, 1971
Muso shinsenda
0 25 50 Miles
6 A 5 0 Kilometers
26
GECAMINES concession
Smelter
area
Other concession area
Concentrator
0 Copper-base mine
cO
Washing plant
.6 Metal works (refinery
Hydroelectric
powerplant
and smelter)
Powerline
5
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oldcr southern group of installations around
Lubumbashi, it smelter produces blister copper from
ores from both the Kipushi mine (which produces
sulfide ores containing up to I I copper) and minvs
from the central group. in 1971 the production of
electrolytically refined copper and blister copper
totaled 406,0W metric tons.
A program which may well double copper
production and exports by the end of the 1970's is in
full swing and involves both domestic and foreign
investment. GECAMINEIS' expansion program calls
for an increase in output to 460,000 tons by 1974 and
an investment of over $100 million. Nearly half of thc
total investment will be required for expansion of the
mines, ane the remainder will provide for tile
coiistruction of concentrator.%, smelters, and refineries.
To firiance the program., the central government has
exempted GECAMINES from paying taxes on all
copper production in excess of 360,000 tons per year
and from paying import duties on equipment being
installed. Tile recent decline in both copper prices and
compa profits has forced GECAMINES to borrow
from the European Investment Bank and the Export-
Import Bank of tile United States. GECAMINES
plans further expansion of productive capacity to
600,000 tons by 1980, but this would require a
substantial increase in Zaire's electrical capacity. Tile
government is currently studying the possibility of
constructing a power transmission line fmal the Inga
facilities on the Congo River below Kinshasa to Shaba
Region. The line would be one of the longest in the
world (1, 100 miles), but there are substantial technical
problems to be solved before the project can be
completed. !n the meantime, the building of a dam
and powerplant at Busanga in Shaba is also being
considered as an alternate source of energy.
Further private foreign investment in the copper
industry has beer sought by Kinshasa far some time.
The restoration of order in 1965 finally bore fruit
about 2 years later, when an agreement was reached
with a group of Japanese firms to develop copper
deposits in Shaba South oi Mus.)slii and around
Tshinsenda. Both regions have ores very rich in metal
content. To carry out mining operations, the
Industrial Development and Mining Company of
Zaire (SODIMIZA) was formed in April 1969, with
15% participation by the government and 85%
interest by several Japanese firms. Extraction of the
copper ore was scheduled to begin in October 1972 (at
Musoshi), and initial production from these ores is tc
be 50,000 tons of concentrates per year. Current plans
provide for an additional annual output of 50,000 to
75,000 tons by 1975. Tile concentrates are to be
6
exported to Japan via rail through Zambia, Rhodesia,
and Mozambique, and then by ship. A second group,
often called the American consortium, was given a
Concession of previous UMHK holdings at Tenke and
F'ungurunie in September 19 The Zairian
Government owns 20% of the new company, The
Mining Company of Tenke-Fungurume (SMI'F'),
with tile remainder being held by a multinational
assortment of U.S., ilrench, British, and Japanese
firms, SMTF bopes to begin mining operations by
1975, with an initial prodv.Iion goal of IW,000 ton-
of metal annually. Tl,e SODIMIZA and SMTF'
projects could mean an investment of almost $400
million through the 1970's and an increased copper
production of around 2(X),O(X) tons annually by 1975
(Figure 6).
b. Cobalt and zinc
Zai is the world's largest producer of cobalt. Most
of tile output is a byproduct of copper refining.
Copper-cobalt ores are processed at the Luilu and
Shitura metallurgical plants Lmd shipped out as
electrolytic cobalt granulc or cathodes. An integral
part of GECAMINES' copper cxpansion program is to
increase cobalt production froin 10,600 tons in 1969 to
16,000 tons by 1975. Output in 1971 totaled 14,5W
tons.
Zinc concentrates obtained from the sulfide copper
ores at Kipushi are roasted at the Kolwezi plant of
General Industrial and Chemical Company of Shaba
TONS (Thousand)
WDO
800
ZfLe
400
200
0
GECAMINES Target
GECAMINES Actual Production
SODIMIZA Target
Tenke-Fungurume Target
1 V70 1971 1972 1973 1974 1975 1980
FIGURE 6. C_*Pper production 1970-71; production
targets, 1970-80
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(SOGECHIM) and s ubsequently Processed into
elcctrol tic bars at the Kolwezi electroi0c plant of ti
Zinc Metallurgical Company (META Both
SOGECHIM and METALZ_INC are parts of tile
GECAMINES holdings. Production of zinc fluctuates
depending upoll the zinc content of the copper ores
mined at 11"ipushi (Figure 4).
C. Cadmium and germanium
Several r,,re metals arid other minerals have also
been produced in Shaba. Flue dusts recove at the
Lubumba-Ai smelter arid Processed by METALZINC
yield an annual average o f about 15 tons of
germanium and 300 tolls of cadmiu Lead is
produced at a small electric sme in Likasi all
Output is co.-sumed within Shaba. Uranium, radjurn,
vanadium, and other minor metals are available for
mining, but high operating costs render su
operations infeasible.
d. Tin
Zaire. is among tile leading producers of ti
although it accoupt for only 2% of non-Communist
world production. The zone of tin deposits extends in a
narrow belt for about 600 mil from northern Shaba
through Kivu Region and ipto Haute-Zaire Region
(Figure 7). Tin Output was affected seriouslv I) th
rebellions, and 1966 production was only abo
of the 1959 level. Continued security problems i
Kivu, deteriorating processing facilities, and an
international quota system tied to a fluctuating world
market have kept tit output below preindependence
levels.
Almost all tin mining is carried out b t
companies. The largest is the Till Wiing Syn
(SYMETAIN), whose mines in Kalima, Ptjtiia, and
other locations in Kivu provide about two-thirds of
Zaire's production. SYMETAIN's reserves are
estimated at 13 0,000 tons, metal content. Tin
concentrates of around 15% metal coitent are
obtained by crushing, screening, and washing the ore;
the concentrates are shipped over the long river-
railroad system through Port de Kindu to Kisanganj
and down to Matadi. Less than half of SYMETAIN's
prodij. -tion operations are mechanized; most are small
hand-worked sluices. Efforts to expand production
include the opening of a new quarry arid processing
facilitv east of Manono to ease the gradual exhaustion
of existing production sites. The only other important
tin mining firm is Zaire-Tin (Zaire-Etain), located in
m,rtherr Shaba. It operates a fairly soiobisticated
proces complex, including a smelter at Manono.
Zaire-Tin was created in October 1968, with one-half
ownership by Zaire, arid the remaining shares being
held by (.;c()I()gi(. and Mining Company of Belgian
Industrial Engineers (GEOMINES), whi also
Inanages the entire Production process f rom mine to
inarket.
e- COlumbium-tantalum
Collillibilln)-tantalum Minerals are obtained as
coprodticts of tin mining. As in the case of tin,
production of eolt) italum has remained
below preindependence tolals arid is currently l ess
than half the output registered in 19,59. Z
accounts for around 55 of tire total production, and
the Mining Company of Kivu (KIVUMINES) for
most of the remainder. A local affiliate of Union
Carbide began mining columbijrn in l late 1970, but it
discontinued operations at the end of 1971 because of
excessive production cos
f. Gold
Gold production has increased onl sl'iglltiv from
the IOW levels of the disturbed postindePeridell ce war
period. 'Mining operations are carried out exclusivelv
within a narrow belt along the eastern border of Kivii
and Haute-Zaire Rcgiolls, generally overlapping the
tin zone (Figure 7). Gold output feli in the mid-1960's
as rebels, m erce
,naries, and tit(- military successi
plundered the mines. Even with the retu of security,
many of the mines have remained closed because of
high operating costs. The govern men t-owned Kilo-
Moto Mille near Lake Albert is the major producer,
accounting for about 75% of Present production. The
only other important producer is the Afdcan Great
Lakes M ining C (MGL), operating all
underground mine near Bu An expansion of gold
output and substantial reduction of associated high
production costs will require both modern processing
facilities and tile !xPlOitation of new deposits with
higher metal content.
g. Industrial diam
Zaire is the non world's largest
producer of industrial diamonds and is to
have tile world's largest diamond reserves. Deposit tire
10 c kted in Kasai -Occidental arid Kasai-Orient
regio the principal area being around Mbuji-Mavi
in Kasai-Oriental. More than half of the nor)-
Communist market for industrial diamonds, mostiv it)
the form of crushing bort, is supplied by Zaire; (;nlv
about 2% of tnntral productio is in gem stones. Th
sole marketing agent for diamonds mined in the
country is British Diamonds, an affili of the
DeBeers Central Selling Organization.
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OTHER MINERALS
Mn Manganese. r Iron ore reserve
Qiamonds
0 Diffield Bauxite reserve
INDUSTRY
0 Center of light industry j a Metal refining
a Hydroelectric powerplant jh Petroleurn r-?fining
501644 2-73
FIGURE 7. Industrial centers and mineral zones.
'rhe main producer of diamonds is the Bakwanga
Mining Company (NIIBA), which since Mav 1969 has
been half owned by the central gov'ernment.
Previously MIBA owned virtually outright by
Enterprise and Investment Company of Beeeka
(SIBEKA), a Belgian company in which South African
and U.S. companies hold minority shares. No change
8
i it the foreign management of M I P-A or its operations
took place with the governinent"i becoming majority
owner, but annual production has been temporarily'
limited to 12 million carats, the maximum amount
which British Diamonds has guaranteed to market in
view of increasing competition from synthetic
diamonds.
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Copper -cobalt -zinc mineral zone Sri Tin
(also produces silver, gold, platinum,
tin, cadmium, germanium) Au Gold
mineral zone containing tin, gold, coal, Cb Columbium
columbium. tantalum, wolfram, beryl, coal
bismuth, rare earths

The few diamonds of gelil quality are fo-li'd
primaril% in the Tshikapa area of' Kasai-0ccidental.
No diamonds have becti Illined legally from the area
since 1966, Whell chaotic security conditions forced
International Forestry in(] Mining Conip o f ti
Congo (FORMINIERE) to close down operations.
The conlirlatly assets were liquidated, old it
Concession reverted to the central government The
deposit is worked regtilarl% by Zairian poachers, and
tile diamonds (inchiding diamonds poaellvd oil tit(-
MIBA concession) are smuggled into Brazzaville,
RePl'blic of tit(- Congo, and Biiiiiinbora. Btirundi. The
Zairian Goveryinient is taking steps to redtice diamond
sinuggliog through new and better techniques of
surveillance. tougher penalties, and reopening of the
Tshikapa purchasing office, closed down since 1970
because of personnel shortage and invfficiell,.
Around 4 million carats of both gern and industrial
diamonds were carned ()tit of tit( country illegally
during 1971.
h. Manganese
Zaire produces about 350,000 tons of manganese
annually, ranking eighth anlong n
producers. Manganese deposits art- exploited IW
Kisenge Mining Company, regi and owned by
Societe Generale de Belgique. Reserves are large
(approximately 6 million tolls, with a 425r', manganese
content), and the location of the mines near the
railroad line to the Angolan port of Lobito is
commercially advantageous. As a restilt of unsettied
market con( and rebel incursions, production
has varied considerably and stopped entirely bet%veen
November 1967 in(] March 1968. Since 1968
production has returned to near normal levels. Other
subsidiaries of the company act vs consultants oil
operations and exploration at Kisenge. A complement
of 2,0W Zairians and about 50 foreigners run the
opera tion
i. Other minerals
Various other metals and minerals are found in
Zaire. Large deposits of iron ore exist in many areas,
but the absence of coking coal and the long, costly
routes to the sea have prevented their development.
Bauxite was discovered in 1958 in Bas-Zaire Region.
The government is negotiating with two large U.S.
aluminum firms, Alcoa and Kaiser, to establish a
major metal processing facility using power from the
Inga dam, no%% under construction on the Congo
River. Limestone and clay deposits are adequate for
many years at present consumption rates. Other
constructimi materials available include gypsulli,
sandstone, granite, basalt, (loartz, all(] stone sititable
for road surfacing.
2. Agriculture, fisheries, and forestry
Agriculture. which provicivs employment for
approximately 70"1 of Zaire's population, has lagged
over tit(- past 12 years. Farin production suffered
considerably becaiise of tit( local strife which broke
out after independence gr a nted i ll 1960.
Prosperous agricultural coo1wratives, created I)% the
Belgians (hiring 1945-60 to modernize native farining
techniques, %vere abandoned, and tit(. large, export-
oriented European plantations fell into disuse. Urban
markets were frequently isol hoin Iheh niral
suppliers, and great num bei.. of native fartners
reverted to subsistence agriculture. BN 1966, cash farm
outpot was about III-Ilf that of 195 8, and officially
recordod exports fell front slNo lilillion to S70
I'llillion�pIlls all estiniatcd $40 million in goods
smuggled out of tit(- country. 'Maiiy foods all(] fibers
previously exported had to he itilported. Sine( 1965,
with the gradoal restoration of' internal security, the
trend of agricultural prodoction h be slowk
i 11) wa rd. Nevertheless, amitial oolptit of most
important crops is still belo%% preindependence levels.
reflecting the major inipediments of all inadequate
it twork of roads and waterways and the lack of
ade(Imite price and income incentives for producers
Figure 8).
a. I,and use
Zaire lies astridv the EI(Itiator, but because of its
varying altitudes, temperate and subtropical crops as
well its tropical crops are grown. The sparsely
populated. low-lying. densely forested Congo River
FIGURE 8. Production of selected ogricultural
commodities
(Thousaruk of metric tons)
COMMODITY 1959 1966 1967 1968 1969 1970
Palin oil
245
147
180
206
201
203
Palm kpi oil and
oil cake
168
68
97
105
109
107
Cotton.meed oil
90
1
1
1
2
1
Coffee
62
36
39
55
51
67
Tea
4
6
3
5
5
9
Cocoa
5
4
5
5
4
4
Sugar
39
32
35
36
39
41
Cotton
63
7
8
12
18
17
Rubber
40
30
32
41
37
33
ion er*
440
317
269
257
255
239
*Ili thousands of cubic ineters.
9
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basin covers about a third of the land area wid is %%(-Il
suited to palln, rubber, and other tropical trevs Figure
9). A high pla-teau. mostly grass covered %%itli scattered
trees and shrobs, inakes Ili) most of the rest of the
countr%. Subtropical crops sucli as cotton are grown in
this area. III southern Shaba arid aloag the eastern
border, the elevation is of suff-cient neight that crops
requiring cooler weather, stich as Arabica coffee, tea,
and potatoe. art' raised along with livestock.
In most of Zaire, the chinate is ti-tipical, with
uniformly high temperatim- and high litimidit%.
Precipitation in the Congo River basal is mainly in tile
form (if thundershowers, with no pronotinced dry
season. To the north of that region, a dry seisoll
extends from Novetnfer throtigh March, and to tile
south from April through September. Wide animal
variations in total rainfall aad periodic droughts occor
in the olatean wd highland vreas.
501643 2-73
E77 Rice
*K Fish
Land has always been inidertitilized. Only I of
the area is finder cultivation or fallo%v at all% little, and
I is in permanent pasture. Sonic 20(;i of (be area is
stfitable for crops or grazing I)kjt is unt-rent1% unnsed.
I-'oro-sts r?- ke Ili) of' Zaire's total land sin-face, and
the remainder is built-tip or %%asteland jIgure 10).
Ili pait, the tindertitilization of agrictilbiral land is
of ue to I It(- nat tira I infertility of Zairian soils.
Exceptions art- found in the Congo [liver flood plain.
where sediment front scasonal flooding is deposited,
and in Kivo Region, where volcanic soils are deep and
rich. lit most other areas, however, Ilw soils become
exhatisted r-pidl% unless fertilized and require lollit
fallow periods for regeneration.
Most of tile land is collectively owned by villages
with no right of mortgage or sale. M-tails of the
traditional land tenure systern vary widel in different
parts of the conittry, but, in general, local chiefs allow
.T Oil palm
Coffee
FIGURE 9. Agricultural zones
I
Tea
W Cocoa
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I
the usufruct of land to individual families, %%lio may
retain tile sarne "property" for mail%! years. A system
of modern land rights has developed in and arcund
the cities art(] for commercial crop growing. Mail%- of
these land rights were granted by tile Belgians dti;illg
the colonial period and are under scrutiny for possible
rc,/ocation by !he central government.
b. Food crops for export
0 1 Coffee� Two varieties of coffee a-c grown, and
most of the annual crop is exported. The cheaper
Robusta variety, used principally to producc instant
coffee, accounts for most of the production; the higher
grade Arabica is grown in much smaller quantities.
Ti,c hardy Robusta coffee tree is grown ii tropical
lowla principally around ;iro in the northeast.
Arabica coffee, native to the tr(.pical highlands, is
produced almost e.%clusively in the elevated area of
Kivu Region in castern Zaire. Most of the coffee crop
comes from large European-owned plantations; native
production occurs on small farms.
Coffee production suffered greatly from the mal)V
internal upheavals, as workers fled the plantations and
reverted to subsistence farming, Few coffee trees were
damaged, however, and the return to earlier
production levels has occurred almost spontaneously
wherever plantations have been restored by their
owners. Official reporting does ;!0t reflect all
production; all estimated 5,000 to 10,(XX) tons are
illegally harvested and smuggled out of the country.
For some time, output should exceed total domestic
consumption plus exports under the Internaional
Coffee Agreement quota: because of a massive
planting c1nipaign in the 1950's, manycoffee treesare
now in their most productive period. Officially
recorded production diifing 1970 reached more than
67AX) tons, almost double the output achieve(] in
1966. Ifigh prices caused the value of coffee exports in
1970 to surpass that of palm oil for the first tirno.
Foreign sales of coffee totaled almost $4.3 million,
about .34% of Zaire's agficultural extN)rt.i that year
Prior to July !472, coffee had been marketed bv
individual producers or through produet coopera-
tives. Several large and numerous small private firins
owned principal]% by Greeks and Portuguese,
purchased coffee alid other produce from the natives
and provided a limited variety of consumer goods to
the interior. In July 1972, a new law enacted
creating the National Coffee Office (ON Q, which has
nole responsibility for marketing coffee. All growers
must now sell to ONC, which in turn exports the
coffee.
(2) Tea and cocoa�Tea is grown primarily in Kivu
Region oil European-owned plantations and, to a
lesser extent, on native farms. Annual production is
at approximately 8,(X)o to 10,(M tons, of
which about one-lialf is legally exported and mast of
the remainder is smuggled out of the country. Most of
the tea consumed domestically is provided by native
farmers who are unablu to sell their crop to European
planters for processing and export because of its
allegedly inferior qualitN.
Cocoa is a minor food crop; it is grown oil
plantations in the Mayunibe forest near tit(- coast and
in the north near Lisala and Budjala. Production,
which is fairly stable at between 4,000-5,(YX) tons, is
almost entirely exported; oveiseas sales totaled $3
million in 1970.
c. Food crops fordoriestic consumption
(1) Cassava, plantains, and cereal grains�The
average Zairian citizen relies heavily upon starchy
foods, particularly cassava (manioc), plantains, and
corn, for his dailv diet. Although found almost
evcrv%% in Zaire cassava il produced primarily in
tile Kinshasa and Kasai areas; minor producing areas
are in Shaba and Kivu. Prior to independence,
production was high enough to allow the exportation
of 60,000 tolls of cassava flour; since 1963, however,
foreign sales have been negligible. Plantains are grown
throughout the country and, next to cassava, are the
most important domestic food crop. Corn. the
principal cereal grain, is cultivated ext, on
small patches of land. Some corn was expo,,ed before
IWO, but the subsequent civil disturbances have
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FIGURE 10. Estimated land use, 1971

forced authorities to import an average of 45,000 tons
a year. about 40% o' -'omestic consumption. Rice is
another staple grain crop, grown along the rivers in
Haut-Zaire and Equateur regions and to some extent
in Kivu. The rice production process, from the
distributi of seeds to marketing, is controlled by
private European firms. Around 20,000 tons of rice
must be imported annually to supplement domestic
production; demand for ric,-, totals about I 10,(XiO tons
annually.
(2) Vegetables andfruits�The basic starchy Zairian
diet is supplemented by a variety of vegetables arid
fruits, including beans, peas, potatoes, lettuce, and
strawberries. These are grown in the Kivu upland
region of eastern Zaire. Relatively large quantities of
these products formerly were shipped to urban areas
throughout the country, but internal disorders and
transportation difficulties have reduced shipments to
below preindependence levels. With the exception of
bananas grown for export on European-owned
plantations in the Mayumbe coastal region, very little
produce is marketed outside the immediate producing
areas.
(3) Sugar�Sugarcane is produced in only two
places in Zaire: the Zairian Sugar Company (CSZ)
plantations in Bas-Zaire and the plantations of Sugar
Mills and Refineries of Central Africa (SUCRAF) in
the Ruzizi valley of Kivu. Production of cane by
SUCRAF has suffered from past rebel disturbances in
Kivu, but losses have been largely offset by expanded
produ-?tion at the CSZ plantations. The demand for
sugar continues to expand as people move into the
cities, where the commodity is more readily available
and prices are regulated. Production does not satisfy
damand, arid imports now supply oue-third of the
total domestic consumption. Expansion of dornesti
output will necessitate an increase in crop plantings
and in mill capacity, but this increase, in turn,
depeads upon higher prices than are now allowed by
the government.
d. Industrial crops
Output of Zaire's industrial crops kernel oil,
cottor., and rubber�was severely curtailed during the
postindependence disturbances and is still below 1959
levels. Only 360,000 tons of these crops were harvested
in 1970, compared with 550,000 tons in 1959. Exports
in 1959 and 1970 totaled 362,000 tons and 262,000
tons, respectively.
(1) Palm oil production of palm oil, palm
kernel oil, and oil cake increased to 310,000 metric
tons in 1970 from 200,000 tons in 1965, following the
12
return of political stability in the prodticing Lreas.
Output in 1970, however. was still only about three-
fourths that in 1959. Significant expansion in output
of this important agricultural export will require an
extensive replanting program and an adequate labor
supply, but labor has become increasingly attracted to
urban jobs, which pay more, Depressed world prices
for palm oil are forcing Zairian prod to abandon
the less efficient graves of wild palm trees arid to
concentrate production on large plantations, where
.nore s%Istematic harvesting and cultivating techniques
result in greater kields of higher quality oil. This has
caused a dechne in the harvests of the large wild palm
region in the Kwilu area, with a resultant shift to
increased plantings in Equateur Region, which has
vw;t tracts of rainforest ideally suited for palm
plantations. Major palm oil producers are relocatir-,
their facilities to this region.
Palm oil is obtained from the exterior fIc-.shy pulp of
the palm fruit, and palm kernel oil q extr3eted iron)
the hard kernels, These oils are used as cooking fats; in
the manufacture of margarine, other food products,
and soap; and ir the copper, steel, and tinplating
industries. Most processing of palm oil is done local]%
to insure a hgh-quality oil arid to reduce
transportation costs betweeo remote producing areas
and the markets. Domestic dernand for palm oil,
which is around 50,000 tons, is for use in foods, soap
production, and in the copper flotation process. Art
additional amount. currentiv unknown but believed
to be rather large, is consumed bk the rural
population. About 500X) tons of palm kernel cake. a
livestock feed, are processed and exported. Until
surpassed recently by coffee. palm oil was the leading
agricultural export, LO W prices resulted in a decline in
the value of palm oil exports in 1970 to $41 million, or
about 31% of all farm exports.
(2) Cotton is grown in three distinct areas:
north of the equatorial rainforest in Equateur and
Hat2t-Zaire regions, south of the rainforest in Kasai-
Oriental, Kasai-Occidental, arid Shaba Regions, and a
small area bordering the northern part of Lake
Tanganyika. An average of one-third to one-half
hectare per family is used for growing cotton. Prior to
independence, each native family in the cotton-
growing area was compelled to plant at least one
hectare of cotton, with Belgian-run cooperatives
supervising the entire industry from planting to
marketing. By 1959, 63,000 tons of cotton fiber were
produced, with only 10,000 tons being retained for
domestic use. During the first chaotic years of
independunce, production dropped precipitously to a
low of about 6,000 tons in 1965, arid cotton had to be
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imported to satisfy domestic requirement I)es a
slight decline in 1970. production since IW has been
generallk; upward. primarJv because ofstability in the
countryside but also because foreign-owned cotton
COmparnes resumed their earlier Practices of pmvid;ng
seed, handtools, and insecticides to the Zairian
farmers. Such assistance, however, has almost entirely
ceased, since the government no longer reimburses the
companies for their expenses.
Zairian authorifies, with assistance from Aroad
Wend to develop cotton production as a means of
increasing -Income in the rural ar-as. One crop-
intensification project is already underway and is
exceeding production goals; a second such project
anticipates an increase in output of 27,000 tons o seed
cotton in 6 years. expar.ding current output b% almost
505 Producer prices were raised in July 1969 111 all
effort to stimulate production in marginal growing
arc-as as well as the principal cotton regions. Even --vith
the increase, however, prices are still quite low,
compared with those in neighboring countries. In late
1971, a q uasi -govern men tal organization was
established. which. in May 1972, was given sole
authority over the operation ot the cotton industrv.
(3) Rubber�Rubber is principally a plantation
crop, but some is obtained from peasants who tap wild
trees and Wher sell the latex to the plantations or,
established in cooperatives, produce rubber sheets
with their own equipment. The major rubber-
producing area is the &)ende region of Equateur.
Most of the latex is exported as ribbed smoke sheets;
only a small amount is processed for domestic use.
Rubber production on plantations suffered extensive
material and manpower losses during the ]%.'4-65
rebellions, arid exports fell to a postindeperidence low
of 21,W0 tons. 1,.)w world ves have kept rubber
output below 40,000 tons annually, despite efforts to
rejuvenate the industrv.
e. Livestock
Cattle are kept by Zairian herdsmen and Etiropean
ranchers, although the natives consider the animals
more as a symbol of wealth than a marketable
commodity, usually maintaining only a subsistenc-
level of meat consumption. Animal husbandry is
largely confined to semipastoral tribes in Kivu and
Haut-Zaire Regions. 'rhese regions constituted the
center of an important meat and dairy product
industry prior to independence, whert several
European-owned herds of more than 30,000 head each
were located there. Herds were greatly reduced in size
during the first years of independence because of
indiscrimin slaughtering and the lack of ade(Itiate
disease-prevention services; veterinary facilities
continue *.o be scarce and substandard in Kivu and
Haut.-Zaire regions. Receptly, there has been a modest
but encouraging develop'nient of Zairian cattle
ownership in Bas-Zaire Region. where livestock
breeding centers are providing cattle to farmers who
eventually repay then, in kind front the offspring.
Several substantial herds have been built tip under this
system and could pr wide an important fWure source
(if meat for the Kinshasa market, which is heavilv
dependent upon meat imports. Eurowan ranchers ar'e
located mainly in Bas-Zaire and Shaba regions, where
they are (livid into either large corporate ranching
organizations with herds of 20,000-30,000 head or
Individual ranchers with generally smaller herds. In
1969 there were an estimated 650,000 head of cattle,
1.5 million goats, and 641,0W sheep in Zaire.
1)(Imestic 1 consumption was arounJ 45.CX)0 tons
in 1970, of which 12,500 tons we imported frorn
Chad. Argentina, arid South A c ol sum pti on (i f
milk, cheese, and other clairy products continues to
run well above production; tire market is suppli
primarily by imports. Poultry raising is of little
commercia! significance because (if ti.e high cost of
feed. Flocks are kept in the Kinshasa area and in other
major towns, but dornestic demand for poultn
products is met largely through imports.
f. Fishing
Zaire is rich in fresh-water fish resources. Large
catches are harvested from the Congo River
watershed, countless other rivers and streams, and
lakes along the eastern border. Annual consumption is
reportedly around 2(X),O(X) tons, 9Wj of which is from
noncoastal waters. Most of the ell is distributed arid
catc -n fresh, bui dried, smoked, and salted fish is
traded wher(-ver transportation and marketing
facilities permo. A small amotin, of frozen fish is
shipped to urban centers.
Fishing along the rivers is engaged in almost
exclusively by individual native fishermen using
pirogues and small nets, while the eastern lakes are the
domain of European firms, mostly Greek, using
motorized launches and large nets. Maritime fishing
along Za;re's 23-mile Atlantic coastline is the primary
responAbilit of the Zaire Maritime Fish Company
(PEMILRZ,0, operating out of the Matadi port area.
PEMARZA supplies both fresh and frozen fish to the
market arid exports those varieties of seafood (such as
so!e. lobster, and shrimp) that do not appeal to Zairian
tastes. The company has experienced slow growth for
several years because of international competition in
the coastal fishing areas, high operating costs, and low
13
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gmernmentalk fixed price.. PENAARZA's total catch
ill 1970 almost I. tolls, solliv%%hat 1)(.Io%% tilt-
IS.(XX)-toii capacit% of the conipan%*s tramler,
IN-spite (he abtindance of fish ill Zairian watvr, tbe
total corninerviial. catch (66,M) toils ill 1970) is tiol
large enough to satisfy demand, and :300M-40,M)
tolls of fish and fish prodlicts llitist be imported each
%var. Man% itidustrial fisheries along the eastern Likes
m-re abandow-d thiring the rebellions of t1tv varl\
1960's, while those still operating are pla by it
lack of rt-placeincio part., for motorboats atid trtickN.
Restoration of Zaire's fishing sedor will retpfiry
substantial imestment and Welinical asistairicv,
iteither of %\hich is readil\ a\ailable at the presetit
tinle.
g. Forestry
Zaire possesses tht- largrest restnesokirgw. forc
Africa. the\ are located primarily ill the 1,ropical
rainfort-st of Ilie 'otigo fliver basin hgute I I This
vast tropical rainfore%t covi-rs most of' F(Itiateur and
I la(it-Zairy Regiotis all(] parts of Kivij, Bandtindij, and
Kasai Regions, a total of more thaii 95 millimi
liectaws. 'I'll(- Ma\ijinhe rainforilm near (if(- AtIalitic
coast is significanti% sinaller ill size. covering almid
.3(X).(XH) hectares, bid its greater acet-ssibilih ha% illade
it the principal source of' commercial Imidwr and
Iiiinher exports. The for(- indtistr\ consists of man\
indepelldvilt loggiltg outfits. [llc,-haWzcd ,awillilk
several 1)1% "ood and venver plants. and minicrotis
pitsa% carpeiRr\ shops. and ftiekood ctitting
operations.
The otitpit and export of forest pro(hicts have
dit-creased stcadil\ sitice indvix-ndence, %%ith total
domestic prodtiction falling to abotit oiie-half the
1959 Ivvd of 4400)0 cijbic t-m-ters, Log \%cre
stispentled from October 1969 to April 1971 bccausv of
the \irtual vOiaw4ion of coninierciaN\ exploitable
Rainforest
Dense forest or alpine scrub
Savanna
Tall brush and grassland
Marsh or swamp
501642 2 73
FIGURE 11. Vegetotion
I I
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7
J_
Kinshasa
,Kikwit
Kanings
Rainforest
Dense forest or alpine scrub
Savanna
Tall brush and grassland
Marsh or swamp
501642 2 73
FIGURE 11. Vegetotion
I I
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stands in the Mayumbe area. Although smine rough
limber is being shipped overseas, curretit output is
designed primarily to satisfy domestic demand. Sornv
veneers and plywood are exported, but even these
have deLlined in volume during the past 2 vear%.
Foreign cash sales in 1970 totaled $3.4 rriflilion, slightl%
over half those of 1966. A 36-year reforestatiol)
program financed by a tax levied upowi the forestry
companies should restore limited parts oi Mayum!ie to
production within 5 or 6 vears., but cutting will be
sharply reduced compared ta previous levels. The
decline of the Mayumbe forest as a major source of
v ood products has forced lumber operations to shift to
the Zaire River basin. The transfer process has been
slow, however, since the costs of transpo)rting forest
products from tire Zaire basin area are high arid profits
from ol are comparatively low.
An imu)rtant determinant of Zaire's ability again toy
become an impowtant exporter of wood arid wood
products is how well cutting operations are supervised
by -overnmental authorities. The forestry service of
the Department of Agriculture inherited from the
colonial administration an elaborate forest manage-
merit plan encompassing licensing and surveillance of
commercial operations and a comprehensive
reforestation program. Until 1972, however, the
government has had neither the technical personnel
nor the financial means to regulate the industry full%
arid forest managerrient has been extremely lax. The
consequences have been severe: royalt payments to
the government have been evaded, reforestation has
lagged, and the depletion of primary reserves has
accelerated.
I Fuels and power
The electric power industry is relatively striall, but it
ranks seventh irt Africa in installed capacity arid fifth
in the production of power; annual domestic per
capita power constimption (148 kw.-hr.) is also high.
Total installed capacity is in excess of 751,000
kilowatts, arid electric power production t'airing 1970
amounted to more than 2.9 billion kilowatt hour.%.
Hydroelectric plants produced 90%, of the total
output, and the mining industry accounted for over
70 of total consunaption. Nearly all of the large
urban areas have electric service, but rural areas are
poorly supplied or are totally lacking in electricity.
Control of the electric power industry is vested
mainly in the federal government, tinder the
Department of Energy; control is exercised through a
centralized authoritv, Water and Electricity
Distribution Administration of Zaire and Rwanda-
Burundi (REGIDESO). Four publicly owned
companies construct and operate large powerplants,
such as Public utility plants which furnish electricity
on in interregional basis. REGIDESO functions as a
holding com and is responsible for overall
management, thus providing continuity in develop-
ment and operation. The mining and other indu
companics produce electricity for their own needs.
making any surplus x)wer available for public
distribution.
The high-voltage transmission system is owned by
GECAMINES, which regulate-, interregional flows of
electricity as well as international exchanges with
Zambia, 0)ngo, Rwanda, arid Burundi.
Because of the dearth of fossil fuels. the countrv's
vast watcqxower resources have been developed to
provide the backbone of the national power grid.
H-Mroelectric development is concent rated in the
vicinity of Kinshasa and in southern arid eastern
areas of the country. Around four-fifths of the installed
hydrMectric capacitv is in four large plants located in
Shaba Region: Le Marinel (276,M0 WA Nzilo
(120,0M kw. 1 Ilebo) (%.,(X)o kw.), arid Zonzo 1 (75,000
kw.). The remainder is accounted for by -mviler
stations with capacities up to 47,000 kw.
Thermal plants. which are scattered throughout the
ctnintry, are predominantly diesel powered. These
plants are used on a standby basis, operating when
water is insufficient for full hydroelectric powerplant
operation arid during peak-load periods.
The principal consumers of electric power are the
mining art(] metallurgy industries, which accounted
for more than 72 of the domestic consumption in
1970. Other industries arid the railroads consumed
about 10%, households and comnivrAal users in the
larger towns accounted for I I%, and 6.3% of the
output was exlx)rted (Figure 12). Most nonindustrial
use is in ur6an areas, where abomt.3 million kw.-hr. are
constimed annually. mainly for household and street
lighting. Only about 10% of the country's homes have
electricity, and about one-half of these are in the
Kinshasa- M atadi area, which also accounts for much
of the commercial use (mainly street lighting). A small
amount of the total available power is used by a 42
mile-long electrified railroad extending between
Tenke, Lubudi, Lubumbashi, arid Kolwezi, A very
small' amount is also used for the operation of
irrigation pumps.
Zaire's tinharnessed hydroe'ectric potential�
estimated at 103 million kw' �represents about 13% of
the world po)tential, of which over 10% is in the lower
basin of the Congo River. Less than I% of the natioi.'s
poten'ial has been exploited. On the lower Congo
River, part of the first stage of the Inga dam
15
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Total 2.949 million kilowatt hours*
and
I'lly
2.133
72.337,
Electrified
'4Wp.Or.ts 120
Othe Railroaas
183
Kinshasa 187
Metropolitan Area
326
Comprising all industrial and nonindustrial
convimption in the Kinshasa metropolitan
area
FIGURE 12. Consumption of electric power, 1970
hydroelectric plant was completed in late 1972, and
bids are being taken for construction of the second
stage. Electricity produced by the first stage will be
transmitted to Inga, Kinshasa, Matadi, and Boma in
the lower river region. Seven transformer stations are
planned: two each at Inga and Boma, and one each at
Kwilu, Kinshasa, and Matadi. Because of inadequate
domestic technical and financial capabilities,
completion of the Inga project is dependent on foreign
assistance. Primary donor countries are Italy and the
European Development Fund (FED).
Zaire's consumption of petroleum products has been
increasing rapidly since the country's only refinery was
completed in March 1968. The plant, located at the
ocean port of Banana, was built 'Uy the Italian state-
owned company, National Hydrocarbons Agency
(ENI). Operating entirely on imported crude oil,
initial refining capacity was 650,000 tons per year, but
it was recently expanded to 750,000 tons, Production
totaled 631,000 tons in 1970, somewhat more than
75% of total domestic consumption for the year. The
refinery, which is capable of processing crude oil into
gasoline, diesel fuel, fuel oil, and jet fucl, is operated
by Zairian-Italian Refining Company (SOMR), jointly
owned by the Zairian Government and ENT. C Drily file]
oil is exported. Petroleum products destined for
Kinshasa are shipped from the refinery by barge and
pipeline products going to Shaba are sent by tanker to
Lobito, Angola, for transshipment via the Benguela
16
railroad. The major area not served by ti iafinery is
Kivu Region, which imports petroleum pr lucts from
abroad through east Africa.
There 's no domestic souree of crude oil for the
refinery, although exploration by private companies
indicates the presence of a substantial offshore
petroleum reservoir and deposits of oil and methane
gas in Lac Kivu. Methane gas has also been discovered
near Kisangani. The petroleum deposits are located
within concessions granted to foreign interests,
however, and commercial exploitation would
probably be focused upon intern.ktioral markets,
primar4y in Weste. Europe and Japo.i. Some
production may well be diverj,d to the refinery at
Banana, but it is unlikely that tiiis would significantly
ease Zaire's dependence oipon imported crude oil. At
the present time, crude petroleum s obtaimd front
Middle East suppliers by the four distributors of oil
products in Zaire: Mobil, Petrozaire, Sliell, and
Texaco.
In addition to deposits of petroleum and methane
gas, Zaire possesses rather large coal reserves�
estimated at several hundred million tons�but their
relatively poor quality has forestalled extensive
exploitation. The only two mines in operation are
located in Shaba Region-, they belong to the Luena
Colliery, an affilitate of GECAMINES. The mines
provide about one-third of the annual domestic
requirement of around 350,000 tons; the remainder is
imported, primarily from Rhodesia.
4. Manufacturing and construction
In comparison with other sub-Saharan countries,
Zaire has a large and diversified manufacturing base.
The country leads the continent in the production of
beer and ranks high in cigarettes, textiles, and metal
and chemical products used in the mining industry.
Ownership of' most manufacturing plants is held by
foreigners, primardy Feigians;' other firms are
controlled in varying degrees 1)) Greek, 1J.S., British,
Dutch, or Canadian nationals.
The establishment of local manufactitring industries
was prompted by the nation's isolation from the main
suppliers of consumer goods and spare parts during
World War 11. Production increased rapidly until
1958, spurred by the country's general economic
growth and encouraged by government policies
favorable to the establishment of new plants. Output
stagnated between 1958 and 1961 because of
depressed economic conditions and p6!:tical
uncertainties following independence. During the next
5 years, rising demand, spurred by the increased
purchasing power of the growing number of civil
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servants and by restrictions on imports of foreign
goods, encouraged manufacturers to increase
production bv 40%.
Competition became keener, however, when
monetary arid fiscal reforms enacted in June 1967
reduced urban purchasing power and removed nianv
import restrictions. Man high-cost industries cut back
production drastically because of curtailed demand
and the increased availability of cheaper import
goods. Other industries, however, used more liberal
import arid domestic credit poiicies to bring in Ladly
needed modern equipment to increase production and'
improv the quality of their products. As a result, the
manufacturing sector was better equipped to rneet the
rising demand for consumer goods, and output in most
industries surpassed totals registered before the 1967
monetary reform. Only the clothing, met
fabrication, and furniture indintries remain below pre-
1967 production levels, because of the superior quality
of imported goods. Additional improvement ill
industrial production depends laigely upon liberaliza-
tion of the current price policy, which has frozen
producer prices at June 1967 levels. Subsequent
increaSL in the cost of labor and raw materials and
reduced profit margins have decreased the amount of
local capital available for expansion arid moderniza-
tion.
Manufacturing is concentrated in the Kinshasa area
arid in the Shaba copper belt; Kalemie and Kisangani
are minor production centers. Most plants sell their
output locally because 'ransportation links between
the widely scattered industrial centers are inadequate.
Consumer goods account for the bulk of industrial
output--647c of the total value in 1970. Major
industries include the production of sugar, vegetable
oils and fats, beer and soft drinks, and cigarettes. The
textile i ndustry is also important, having all installed
capacity of about 120,000 spindles and 2,200 looms;
one large plant in Kinshasa has almost two-thirds of
this capacity. Other consumer goods, produced
primarily from local materials, include clothing,
blankets, shoes, and rubber products. Durable items,
such as automobiles, motor scooters, refrigerators,
stoves, phonographs, and radios are assembled in the
country, usually from imported parts.
Equipment requirements of the Shaba mines have
provided a steady market for several industries,
primarily chemicals and metal fabrication. The
chemical plants are located within the m-ning area
and provide sulfuric acid for processing copper, cobalt,
explosives, and various metal products.
The construction industry stagnated during the
early years of independence but has registered a
significant revival since 1965. Few major development
projects are underway, but considerable ne"
construction of homes, offices, and factory buildings is
taking place, primarily near Kinshasa. The
construction industry i5 dominated by a few large
enterprises, most of which are Belgian owned. An
increasing number of Zairian entrepreneurs are
entering the industry to take advantage of quick
profits from real estate operations. Frequently, Zairian
contractors subcontract to BeIgian-owned firms or hire
Belgian technicians.
Most construction materials are produced locally.
These include roofing and building tiles, cemen
concrete pipes, cinder blocks, and bricks. Only highly
specialized types of cement are imported. Five major
cement plants serve the Bas-Zaire Region, the copper
belt, and the eastern part of the country. The two
largest plants are expanding production i n anticipa-
tion of increased demand for cement in Zaire arid in
neighboring Zambia. Bricks and a wide variety of
other construction materials are produced at "two
plants operating in Kinshasa and Lubumbashi; the
output is consunied locally and is sufficient for present
requirements.
5. Domestic trade
Every village arid town has a public marketplace
maintained and supervised by native Zairians, who
rent space to retailers. The ;arger markets consist of a
number of specialized areas in which particular types
of merchandise are sold. Merchants and peddlers sell
goods in small quantities at prices determined by
bargaining. They purchase merchandise from local
wholesalers and traders who themselves often own
rotail shops arid employ many petty traders. The latter
are frequently non-Zairians who, in addition to
working for retailers, also travel through the
countryside peddling their wares. This Lraditional
system provides an outlet for small agricultural
surpluses and facilitates the exchange of hMcrafted
items and the distribution of imported consumer
goods.
in addition to the traditional distributior- system,
there is a modern merchandising sector, which caters
primarily to the foreign community and the Zairian
urban elite. Wholesale import houses and their retail
stores are found in all the major urban centers. Most of
their business comes from the large mining companies,
which purchase consumer goods for sale to their
employees, and from small shopkeepers and petty
traders.
The most significant requirement for the expansion
of Zaire's domestic trade sector is the upgrading of the
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country's road, rail, and water transportation systems,
which deterioratcO, markedly during the years of civil
strife following independence. Roads have fallen into
serious disrepair. and most river and rail transportation
has b affected adverselv b administrative
disorder, lack of maintenance, and the absence of
imported replacement parts. After independence, the
volume of traffic handled by major transportation
companies fell to about one-half of the pre- 1960 level.
Since the mid-1960's, the railroads have been
reequipped to some extent, and the volume of traffic is
rising. The most acute problem is the 000r condition of
the roads, which, as adjuncts to the railroads and
waterways, are basic to domestic trade. The
transportation problem is being studied by the Zairian
Government and various aid donors; commitments to
upgrade parts of the system have been made b% the
United States, the ELropean Development f tind
(FED), and the International Bank for Reconstruction
and Development (I BRD).
C. Economic policy and development
1. Polic
The main goal of Zaire's economic policy has been
the reduction of foreign dominance over the economy.
A special target has been the Belgians, who, when they
departed their former colony at the time o f
independence, left behind virtually no experienced
native entrepreneurs or managers. The chaos of the
early 1960's was followed by efforts to Africanize the
ec(snoniv and to renegotiate those agreements of prior
g(; ernments which were considered overly favorable
to ireign interests. The culmination of Zairianiza-
tion" came in 1966, when the Mobutu Government
passed a series of laws which (1) canceled al'. land,
forestry, and mining rights granted prior to 1960 and
required reapplication by all foreign concessionaires;
(2) required foreign firms to move their headquarters
to Kinshasa; and (3) permitted greater financial
control of foreign firms by the government.
In practice, government action against foreign
interests has been very limited, the most notable
exception probably being its seizure of the assets of
UMI-IK in 1966. Indeed, the government has eased
many extreme aspects of Africanization in an effort to
improve the investment climate. An investment code
promulgated for this purpose in June 1969 p
fc r the possible extension of fiscal and other benefits to
firms whose investment projects are considered
important for the country's economic and social
development. Fo-eign managers, a rarity during the
upheavals of the early years of independence, are
18
permitted again in the public sector to supervise
municipal electricity and water systems and to
reorganize water transport and road maintenance.
a. Government finance
The central government, with assistance from the
IMF, initiated a general economic stabilization
program in June .1967. Important fisca! aspects
included the presentation of a formal budget with
provisions for development allocations, expansion of
the tax base, improved collection of taxes, and
procedures for limiting expenditures. Fiscal powers
todav are primarily in the hands of the central
authorities, with previously uncontrolled provincial
expenses now dependent upon funds from Kinshasa.
In addition to its new control over the disposal of
public funds throughout Zaire, the central government
has expanded its taxing power in a combined effort to
increase revenues and help stabilize the economy. The
main feature of the prourram is the i!eavy reliance on
e'
indirect taxes, particularly on exports. Remaining
sources of government incorne-direct taxes, portfolio
investments, fees, service charges, and receipts frorn
governmcn! property-contribute about 30 of total
tax revenues and 35% of badgetary income (Figure
13). The heavy dependence on taxes on international
trade, however, makes public finances vulnerable to
fluctuations in the level of trade and in world market
prices.
Direct ta.es. although still a secondar%, source. of
government revenue, are increasing in importance,
FIGURE 13. Government revenues
(Millions of U.S. dollars)
Total tax revenues 535.9 588.2 5 15. 4
Other revenue 9.5 25.1 54A
Adjustments* 6.4 17.2 0.0
Total government revenue 539.0 630.6 569.8
*Adjustments result from receipts not yet classified by
revenue category or not yet transferred to the central account
of the Treasury.
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1969
1970
1971
'faxes on net income and profit
139.1
144.1
134.4
Corporations
86.2
92.8
76.0
Wages and salaries
41.1
37.0
43.5
Other
11.8
14.3
14.9
Taxes on property
7.2
6.0
9.8
Taxes on production, consumption,
and domestic transaction
56.1
72.2
102.1
Internal turnover tax
35.2
49.3
72.1
Excise
20.9
22.9
30.0
Taxes on international trade
332.3
364.2
268.3
Other taxes
1.2
1.7
0.8
Total tax revenues 535.9 588.2 5 15. 4
Other revenue 9.5 25.1 54A
Adjustments* 6.4 17.2 0.0
Total government revenue 539.0 630.6 569.8
*Adjustments result from receipts not yet classified by
revenue category or not yet transferred to the central account
of the Treasury.
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reflecting increased wages an(] corporate profits.
Personal income is subject to it progressive tax ranging
from 4% to 60%. Corporate income is taxed at a single
rate of 40%: prior to 1967, it was taxed at a sliding
scale ranging from 14% to 40%. Collection of
corporate taxes has been accelerated by the
requirement that companies pay in advance 50% of
the previous year's tax as an initial installment toward
the current vear's tax liabilitv.
Total bulget experidittires, including public debt
amortization, increased by more than 60% in 1968-70
(Figure 14), before declining export revenues forced a
decline in the rate of growth of spending in 197 1. Both
current arid capital expend it tires increased during the
1968-70 expansion, but the 1971 retrenchment
affected only capital outlays, since investment
spending stagnated (F'igure 15). Current expenditures
continued rising primaril% because of increases in
wages and salaries, financing operations of various
government ministries (particularly defense and
education), the central government's assumption of
provincial budgets, and special outlays directed by the
presideacy. These functions accounted for about two-
thirds of projected government spending in 1972. as
shown in the following percentage distribution of
central government expenditures according to
functions:
Administration (incl. Office of the President) 30
Investment
FIGURE 14. Consolidated government financial
Education
I 20
operations*
11
Regional budgets
6
Debt service
(Millions of U.S. dollars)
Others
4
1968
1969
1970
Expenditures
45W3
586.4
730.0
Revenues**
.1lo.".
588.0
686.1
Deficit
-40.0
1.6
-43.9
Financing the deficit
40 J
-1.6
+43.9
Domestic
1 0. 2
10.6
28.3
Central Bank
7.6
-11.0
25. 7
Commercial banks
7.7
-0.3
0.4
Post Office
-0.1
1.7
-0.3
Other borrowing
3.9
2. 5
Foreign
20.8
9.0
15.6
Lung-term loans
14.9
11.6
12.3
Suppliers' creuits
13.7
9.5
WA
Reimbursements
-7.7
12.1
13.2
*Totals may not add because of rounding.
**Include government revenue
and foreign aid.
reflecting increased wages an(] corporate profits.
Personal income is subject to it progressive tax ranging
from 4% to 60%. Corporate income is taxed at a single
rate of 40%: prior to 1967, it was taxed at a sliding
scale ranging from 14% to 40%. Collection of
corporate taxes has been accelerated by the
requirement that companies pay in advance 50% of
the previous year's tax as an initial installment toward
the current vear's tax liabilitv.
Total bulget experidittires, including public debt
amortization, increased by more than 60% in 1968-70
(Figure 14), before declining export revenues forced a
decline in the rate of growth of spending in 197 1. Both
current arid capital expend it tires increased during the
1968-70 expansion, but the 1971 retrenchment
affected only capital outlays, since investment
spending stagnated (F'igure 15). Current expenditures
continued rising primaril% because of increases in
wages and salaries, financing operations of various
government ministries (particularly defense and
education), the central government's assumption of
provincial budgets, and special outlays directed by the
presideacy. These functions accounted for about two-
thirds of projected government spending in 1972. as
shown in the following percentage distribution of
central government expenditures according to
functions:
Administration (incl. Office of the President) 30
Investment
22
Education
I 20
Armed forces
11
Regional budgets
6
Debt service
7
Others
4
Total 100
Actual expendiLures have consistently exceeded
budgetary appropriations (by 43% in 1969 and 48% in
1970), with overruns of $160 million and about $200
million in those respective years. Even a reduced 1971
budget underestimated actual spending by 25%, or
around $150 million.
The public debt at the end of 197 1 was estimated at
$519 million, 45% of which was foreign debt.
Domestic debt consisted almost entire]% of claims held
by the banking system, mainly the Bank of Z.iir,. the
country I s central bank. A favorable budgetary
situation permitted a reduction in the domestic debt in
1969. but increased government borrowing has taken
place since inid-1970, again raising the debt level. The
country's foreign debt was eased considerably in July
1971, when Belgium agreed to take over the
indebtedness of the Belgian-Congolese Amortization
Fund. The fund had been created in 1965 to refinance
the outstanding foreign debt incurred while the Congo
was a colony but %vhich had not been guaranteed by
the Belgian Government. The liabilities of the fund
represented over 40% of Kinshasa's total foreign debt
by 1971. The remaining foreign debt is owed in large
measure to the United States, Italy, France, Belgium,
and the IBRD.
Since 1960. deficit spending has characterized
public finance. The only exception was in 1969, when
revenues from copper exports were much higher than
had been anticipated. To finance budgetary deficits,
the government has borrowed heavily from domestic
iources, particularly the country's banking system. By
1967, easy financing of excess spending, combined
ith frequent increases in an(] salaries, had led
to rampant inflation and it marked deterioration in the
countrv's overall financial Posture. The reforms of
June 1967 instituted several restraints on government
spending; an annual budget to be drawn LIP in
balance with anticipated revenues; wage and salary
increases were to be limited; and a ceiling was placed
upon commercial bank credit to the central
government. Although these measures have not always
been adhered to, the% have maintained some degree of
constraint upon current operating expenditures.
Foreign sources-principally private bank loans arid
Eurodollar loans-are being used increasingly for
financing budgetary deficits, but these are costly.
Overall credit developments %vere moderately
expansionary from June 1967 through 1969, with more
than 60% of total borrowing coming from the private
sector. With the deterioration of the national
budgetary situation in 1970 and 1971, however,
domestic credit increased rapidly, by perhaps as much
as $120 million in 1971 alone. Credit expansion in
both the public and private sectors is controlled by a
H
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system of credic ceilings, probably the most important
monetary too! currently being used. The government
may receive direct advances from the central bank tit)
to 15% of the average annual receipts in the precedin
3 years; these advances are not to be extended for more
than 300 days during each calendar year. Quantitative
credit restraints may be imposed upon the private
sector as well, but more important is the selectivity
which the central bank h,s utilized to allocate and'
redistribute credit resources among various economic
constituencies. By using the cilement of selectivity, the
bank has become influential in directing the country's
economic development, especially transportation arid
export projects.
b. Money and banking
The Bank Zaire is the country's central bank it
operates under statutes incorporated in the 1967
reforms. Central bank policy is determined bva board
headed by the bank's governor. In addition 'to voting
members, the board has a nonvoting delegate who
represents the Department of Finance. Besides its
control over domestic credit, the Bank of Zaire is
authorized to act as banker arid cashier for the central
and provincial governments as well as for public arid
sernipublic enterprises and to manage the country's
foreign exchange transactions. The central bank ni'ay
also establish reserve requirements, set discount rate%',
and regulate commercial bank credit operations. Bank
resources may he used to finance public participation
in private ventures that contribute to the economic
development of the country.
The commercial banking systern consists of eight
operating institutions, most of which are branches or
affiliates of foreign banks. The only commercial bank
established by private Zairian inte
rests is the Batik of
Kinshasa, founded in November 1970. The
government has pressured quasi-governmental
organizations to use the bank for all transactions, and
native depositers are also strongly urged to avail
themselves of the bank's services. Further 10Cal
involverrient in the banking system came in August
1971, when the country's second-largest foreign-
owned bank, Congolese Banking Company (SOCO-
BANQUE) was reorganized as the People's Bank and
placed tinder sernipublic control. The largest foreign-
owned commercial bank is the Commercial Bank of
Zaire, with deposits accounting for more than 60% of
all commercial bank deposits. Principal ownership is
shared equally by the Societe Generale de Belgique
and the Zairian Government; the Morgan Guaranty
Trust of the United States is the largest minority
shareholder. Several branch offices of the bank have
20
limited authority to act for the central bank in cashier
arid depository roles. The First National Citv
Bank/Zaire is the only wholly owned U.S. branch
bank in the country, having begim operations in
November 1971.
Financial institutions other thaa commercial banks
play only a minor role in Zaire's money arid credit
operations. The handling of savings deposits has been
the responsibility of the National Institute of Social
Security (INSS), the National Insurance Company,
arid the Ceneral Savings Batik; li(p6dity problem's
have hampered their activities, howeve A lie
holding agency, the National Trust and Finance
Company (SOGEFI), was set tip in late 1970 to
encourage domestic savings by investing in local
enterprises. Most of its portfolio is in the country's fotir
main automobile importing agencies. fit air attempt to
step tip industrial expansion, the Development
Finance Company (SOFIDE) was created in January
1970, with initial capital supplied by the central
government, several private investment groups, arid
the World Batik. Loans through June 1971 totaled
almost $14 million, primarily to agricultural
industries, light mechanical industries, and beverage
and chemical industries.
The Republic of Zaire's currency is the zaire, which
replaced the franc in conjunction with devaluation in
the 1967 reforms. The official buying rate is 0.5 zaire
to US$I.
2. Development
Recent economic progress in Zaire has occtirred in
accordance Nvith established economic prioritivs,
rather than through it formal development plan. The
"Pheavals following independence forced the
government to shelve a 10-year program, begun in
1960, which envisioned $1 billion ill public investment
with emphasis oil improving agric"Itural production.
The government has made subsequent attempts to
initiate a development plan, but a lack of trained
personnel and of funds doomed most of them to
failure. The most recent effort to promote the
formulation of a rational economic investment
program was the creation in carly 1972 of the Ministry
(now Department) of Plan. headed bv Presiden
Mobutu. The department is to be staffed bv a small
number of experts, including foreigners who are. to
develop and sectire fin.Ancing for specific projects
within the framework of established priorities--
primarily the transportation arid agricultural sectors.
The department is also responsible i"or preparing the
investment budget, but there. to I)e no coilcerted
effort to formulate all overall economic development
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I
plan for several years. The concentration within one
agency of all functions related to development should
make investment planning more orderly than it has
been.
Although Zaire's generally acknowledged economic
priori ty-restoration of the country's infrastructure
and its agricultural prod-iction apparatus-has
remained essentially unchanged since 1965 capital
budgets have emphasized other sectors of the
economy. Since the capital budget was inaugurated in
1968, the largest single allotment of funds hai always
gone to the presidency, which has placed more
prestigious projects above the more urgent goals of
integrating the rural population into the country's
economic mainstream and of rehabilitating the
transportation network. L ader the government's
proposed 1972 capital budget, for example, only I I%
of the total outlay is earmarked for agriculture arid
transportation, compared to almost 30% allocated to
the President's office for other projects favored by
Mobutu (Figure 15).
Development prospects are brightest for the mining
sector, which has provided the major stimulus for tbe
country's economic development. A decline in world
copper prices, however, has already forced GECA-
MINES to borrow several million dollars abroad to
finance its current investment effort. A continued
declin in world copper prices might force a revision of
expansion programs planned for the post- 97.5 period.
The power sector received art important boost
during 1972, when two 50,000-kw. generators of the
massive Inga hydroelectric powerplant complex began
operations. The plant is to provide cheap electricity for
FIGURE 15. Distribution of public capital budgetary
expenditures
(Millions of U.S. dollars)
1968 1969 1970 1971* 1972*
Indirect investments**. 10.6
Direct investments. 40.7
Presidency
13A
Public Works
7.0
Transport and com-
119.9
munications
.7
Energy
.5
Agriculture
3.6
Other***
15..j
12.5
4.9
9.6
14.1
92.5
119.9
124.2
131.2
50.1
68.5
52.1
43.0
15.6
2.7
5.9
7.4
3.3
5.9
8.4
9.2
8.5
12.3
20.7
38.7
6.8
4.3
4.1
7.1
8.3
26.3
33.0
25.8
Totalt 51.2 105.0 124.7 133.9 145.3
*Budgeted, not actuai expenditures.
"Capital participation equipment subsidies and loans.
***Includes Che repayment of suppliers' credits.
tTotals may not add because of rounding; they do fil
include investments funded by foreign aid.
the raushrooming Kinshasa metropolitan area and
power for the planned expansion in Shaba's mining
region. Four other 50,000-kw. generators are to he
installed before the first of the three-stage prote,-t at
Inga is completed. The estimated 30 million km
potential of the Inga power complex is far in excess of
the surrounding region's contemplated power needs.
and further development of the project will probabl%
depend upon finding additional users.
Manufacturing production depends largely upon
the existence of sufficient domestic and foreign
markets, adequately trained Tnanpo�. and an
investment climate conducive to fo-eign participation.
Foreign capital arid management are particularly
important to the development of Zairian industry,
since native sources of both inputs are relatively
scarce. Cost reduction and quality improvement are
essential for the expansion of markets.
Planned development of the transportation network
appears extensive, but past experience has shown that
government investment probably will be belwv
planned levels arid accomplishments will he limited to
rehabilitation of the existing network rather than
expansion. There is strong interest in the construction
of a rail line from llebo to Kinshasa to provide a
continuous link from Shaba to Matadi, Zaire's main
port. The World Batik is engaged in a comprehensive
study to determine the costs of building that line plus
alternate transpintation routes from Shaba to the sea;
costs are 6, he calculated within the context of
projected traffic flows during the next 20 years.
Mining, electric power, arid manufacturing
continue to be favored by both public and private
investment, but it is agriculture, the most
fundamental sector of the e that desperately
needs rejuvenation and expansion. Increased farm
output after 1965 was a spontaneous response to the
return of law and order further increases require the
allocation of additional domestic resources, which the
government has been reluctant to do. The mere 7.1
of the 1972 public investment budget reserved for
agriculture is continued evidence of the low priority
assigned to that sector.
The Zaire Government has tried in recent years to
make conditions attractive for private investment,
particularly foreign investment. The Africanization
campaign following Mobutu's ascendancy to the
presidency has been superseded by a more realistic
effort to promote Zairian participation in private
enterprise, but not necessarily Zairian control.
Although foreign investment is encourage(], at least a
S1104 equity is frWrVed for the government it% mest
loroeigii capifid 11(4-"A A personal visit to the
21
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United States by President Mobutu in the fail of 1970
initiated an active campaign to secure American
capital, not only for technological reascns but also to
dilute the country's dependence upon Belgium.
Although U.S. investments lia%e risen significantly
during the past 18 months, they have not reached the
levels hoped for by Mobutu. Major deterrents have
been the limited domestic market arid the policy of
Africanizing foreign-owned businesses already in
country. Although applicaiion of the policy has been
limited primarily to a few Belgian banking and
commercial interes!s, even this restricted application
has been sufficient to discourage prospective foreign
investors.
Primary facets of Kinshasa's program to promote
domestic and foreign capital investment in Zaire are
the investment code of June 1969, which grants fiscal
and other benefits to firms undertaking new
investments, and the creation in January 1970 of a
new investment agency, SOFIDE. The role of this new
agency in stimulating local enterprises will be limited
to small firms, since the size of any single investment is
restricted to 20% of the paid-up share capital of the
enterprise; investors interested in large undertakings
will have to turn to other sources for financing.
Specific provisions of the investment code that
encourage investments include profit and dividend
repatriation, corporate tax concessions, and the
removal of duties on epaital goods imports.
New investment during 1971 continued an upward
trend, totaling an estimated $650 million, W/i of
which came from private sources. The 1971 total
represented an annual increase of 6%, compared with
increases of 32% in 1970 and 45% in 1969, when
government investment budgets were minimal. New
actual puNic investment in 1971 stagnated at the
1970 level of $176 million, reflecting bodgetary
stringencies, while private capital expenditures of $474
million were 8% higher than the year before. The
Zairian Government has drawn tip a comprehensive
listing of capital projects for the period 1971-
combining major elements of a development program
for the 1970's. The total planned 5-year investment is
about $1.4 billion, of which about $1 billion is to come
from public funds and $400 million from private
sources. In addiJon to these special development
efforts, private investments are expected to continue at
current levels in traditional endeavor%. Large-scale
iFIVOlVement by domestic and foreign private
enterprises in the plan is emphasized as it means to
complete the rather ambitious list of projects, which
stresses manufacturing, extractive industries, and, to a
much smaller degree, transportation.
22
3. Manpower
At the time of its independence in 1960, the Congo
was handicapped by a severe dearth of trained
manpom-er, a situation that forced the vountr,- to rely
upon foreign personnel for managerial and technical
expertise. Kinshasa has established an increasing
,lumber of specialized training institutions, but the
supply of skilled native personnel is still far below the
demand. Acute shortages will 'he felt in the operation
and management of transportation, communications.
and civil aviation services and in the management of
public works programs and agricultural schemes.
In 1%.8, the last year for which statistics are
available, the population of legal working age-14
years and over�was estimated at 8.3 million, 495i of
the total estimated population and Wi of the
population aged 14 years and over. Males accounted
for only 48 of the total labor force. but thev had a
labor force participation rate (percentage of a
populaCon group that is ec(onomically active) of 82
compared with 81 for fernales. In addition to the
legally defined labor force, large numbers of children
aged 6 to 13 are traditionally active in the subsistence
economy.
Large portions of the labor force are either
underemployed or, particularly in urban areas,
unemployed. Underemployment is especi preva-
lent in the subsistence economy of the rural areas,
where tribal traditions dictate that adult males
participate in the production of subsistence crops only
to the extent of clearing the land; the cultivating,
harvesting and processing of the crops are done by
%%omen and children. Unemployment was unofficiallN
estimated at 800,W0 in 1968, or about 10% of the
labor force, and has probably increased since that time
because of the continue(] influx of inigrants from the
farms to the u. areas. Government efforts to
relocate urban unemployed in their home villages
have met with little success; most of those forced to
leave cities simply return and try to avoid periodic
roundups by the authorities.
I n 1968 approximately 85% of those employed were
in agriculture., fishing, forestry, and hunting. The
majority of those engaged in agricultur in the
subsistence economy, working for themselves or as
unpaid family workers. Some subsistence farmers also
raise cash crops; others periodically work for wages as
cutters of palm fruit or as seasonal workers on
plantations.
Most of the remaining 1.3% of the employed were
wage and salary earner% in the monetized sector of the
economy and in government service; significant
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numbers were small-scale trader.%. primarily in rural
areas. and smaller numbers were self-
artisans (Figur 16). Zairians dominate semiskilled and
unskilled positions, but a small number of workers
from other African countries also compete for these
lower paying j Managerial and highl technical
Positions continue to b filled primarily by non-
Africans.
Labor productivity is generally low. Major limiting
factors are a general lack of skill's and. particularly in
agriculture, the low 1,-vei of government procurement
prices. Other detrimental factors include the lack of
equipment, low salaries, and poor working conditions.
In subsisteriLv farming, output is hampered by the
widespread use of primitive techniques, which requires
a heavy input of labor and restricts the amount (if land
that call be cultivated. Subsistence farmers plant crops
to fulfill food requirements for their families.
regardless of the crops' suitability to soil and climate.
Government programs initiated to increase agricul-
tural output by replacing traditional farming practices
have foundered because of shortages of trained
agricultural agents. Even with the acquisition of wore
advanced technical knowledge, farmers have
difficult obtaining credit to buy necessary equipme
and materials to utilize the newly learned 'techniques.
fr. contrast to subsistence farmers, Most commercial
farmers use machinery and advanced techniques of
soil preparation. seeding, and insect control, as well as
FIGURE 16. Employment by sector, 1968*
SFL rOR
EMPLOY- P KRC E NT
%I K N"r OF TOTAL
Agriculture, forestry, fishing. and
hunting
120,549
Mining and metallurgy
59,347 9
Manuiacturing
89,930 13
Construction
Transportation and communications.
11,953 2
64,550 9
Commerce, banking, and services.
36,985
Government
301,400 44
Career civil servants
26,500 4
Armed forces
43,000 6
Police
20,900 3
Teachers
60,000 9
Contract employees
150,000 22
Public officeholders and staffs
I, wo Negi.
Total
684.714 WO
Statistics f"! 41 0 0 4WHIllpht personnel
are based on a
rensus conducted by 0� former Ministry
of Ndtional Economy
The data cover 1,100 enterprises, rel -senting about "I'll O f
e eon 0 mic activity in the monetized sector.
Not included are
Individual farmers, personnel on small
plantations, artbsans,
and employees in small commercial establishments.
modern soil conservation Practices. Agricultural
Prodt'Ctivitv is two to ten times greater on commercial
farms than on subsistence smallholdings.
In the private nonagricultural secto-s of the
econonly, a difference in labor productivity e
between the small- and medium-sized firms which
often lack the capital and sometimes the motivation to
develop the skills of their labor force, and that of
larger enterprises, which frequently train their workers
for more high]%- skilled tasks. Larger enterprises have
been ahle to increase further their labor productivity
bN utilizing advanced equipment and by improvin'
9
living standards. Large firms also provide prod uctivi t v
incentives such as Ilonuses based on output and
promotions to more responsible poniti stich
Policies have contributed to relatively low rates of
absenteeism and job turnover in the larger enterprises.
Efficiency in government suffers from a surplus of
unskilled workers at the lower echelons and a shortage
of trained adminktrators. The failure of government
service to attract more highly trained supervisory
personnel is due in part to higher salaries offered in
nongovernment sectors; recent substantial wage
increases have reduced, but 'lot eliminated, this salam
gap. Because of lo%v pay, mail% government worker
spend much of their time in' supplementing their
income, primarily through illegal Pavoffs or
embezz!ement of funds. The hiring of contrac workers
has created administrative Problems and hampered
productivity it s w ll. These workers are often hired
because of personal or family obligations by
employers. who then make irregula'r deductions from
the emplovees' wages as compensation for the favor.
Strikes have occurred. particularly by teachers, over
nonpayment of wages and salaries resulting from fund
shortages or embezzlement. These strikes are generall%
illegal because striking workers usually do not complv'
with the complex .nd lengthy conciliation and
mediation procedures prescribed. In addition, tile
government has declared strikes illegal unless
authorized by the general secretary of the trade union
center. The union leadership ha kept strikes at a
minimum, however. because of a continuing dialog
with both management and government.
Diverse working conditions contribute to variations
in productivity. The heat and humidity of the central
hasin inhibit heav% work, while the tenitwrate
peripheral highlands provide an environment more
conducive to physical effort. Unprotected and often
Polluted water S 1110es, especially in rural areas.
undermine the lailorers' physical well-being and
production Potential. Another' deleterious aspect of
rural life is the absence of animal protein in areas
23
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infested -with the cattle-d t setse fl worker,
in these regio stiffer front malnutrition and related
diseases. Meat Const mption among lo%%er paid urban
workers also is precluded or greatly limited because of
high prices.
Also affecting productivit are laws covering hours
of work, tight work, weekly rest, holidays, paid
annu leave, an(] health and safety conditions. All
employed %%orkers�e those in the judiciary. ci% il
service, police. and armed forces, who art- cove 'red 1w
separate laws�are protected by ti
ic 1967 Labor Code
and its impl legislation. Statutes establi a
maximum S-hour day and a 6-day week, with limits
()it the amou o f overtime work according to the job's
difficulty overtime and nightwork premiums are also
defined by law. Workers are entitled to a rest
period of 24 consec hours to 12 holidax's per
year; and. after I year of service, to annua paid' leave
of 12 working days if over IS years of age or 18 days if
under 18. Legislation also') requires e%er%
establishment to provide health sen 'for its
employees a fe%% inadequate government-sponsored
clinics are provided for subsistence farmers who
generally suffer front lower health standards.
Enforcement of all provisions of the 1967 Labor
Code is the responsibilit,.. of the Geveral Inspectorate
of Labor. Staff shortages. poody qualified personnel,
lack of transportation, and corruption have greatly
hampered the inspectorate's effectiveness, allowing
wany small- and medium-sized establishments to
conduct I ms i riess with working conditions below the
standards required by law.
D. International economic
relations
1. Foreign trade
Zaire is pfincipally an exporter of mineral and
agricultural prod ticts and an importer of raw materials
and consumer and capital goods. Copper alone
accounts for about two-thirds of the value of tot
exports; such heavy dependence on copper exports
makes the country's entire export picture and, indeed,
th- entire econom highly vulnerable to fluctuations
in the world copper market.
Exports increased from a total of about $470 million
it' 196 to alrn( $800 million in 1970. The major
1111petus for (his growth in export receipts has been the
high price of copper, which rose from $0.49 per pound
in 1967 to an average of $0.73 per pound by mid-1970.
Since June 1970, however. prices have steadily
declined to an estimated average of $0.54 a pound it
24
1971, and overall exports dropped to around $670
million in 197 1, resulting in an iinfavorable balance of
trade for the first time since IW3 (Figure 17).
Agricultural expowts continue to lag behind pre-jjW)
totals because of a general weakening in world market
prices and domestic transpowt prohlcms.
The composition of exports has changed consider-
ably since I%.) due to the decline in agricultural
prodtiction and the rise in the mineral trade. The share
of mineral products in total exports increased from
roughly 60 it. i-)59 to 83% in 1970; during the same
period. copper alwie rose from 28( of all export
receipts to WC. Although agricidwral output I)
increased since the restoration of security in rebel-
damaged areas, farm exports have not rec() their
relative share of tot foreign sales (Figure IS).
Accompanving the increase in exports an
equall% signi fic upsurge in imponts. reflecting i t
rapid growth of domestic demand and the easing of
irtipont restrictions in June 1967. Imports totaled $693
million in 1971, compared %vitb $326 million in M'7,
and were about equally divided among consumer
goods, raw materials, and capital goods. In an effort to
alleviate the countn's deteriorating foreign exchange
Position. Zairian authorities recent]% passed two
measures to reduce the volume of imports without
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FIGURE 17. Foreign trade, 1966-71

resorting to the rigid import licensing program used
before the 1967 fiscal reforms. Duties were raised
sharply on imported luxury items and products which
compete with domestically produced goods, arid
impom licenses were to he denied on all goods whose
Prices were not at least 3r/i below the minimum prices
for 1971. Exemptions to the latter provision are
reviewed on an individual basis, arid have been
limited primarily to foodstuffs and equipme
deliveries covered by approved investment agree-
merits.
Belgium is Zaire's principal trading partner, arid
other member countries of the EC' constit tile
second-largest trading bloc. The U.S. share of inipon s
continues to decline because of reduced U-1.
government financing through the aid program;
exports to tile United States are minimal, and are
principally agricultural commodities. Japan's share of
Zaire*s imports has been rising rapidly in recent ycars,
from 2% in 1%.7 to 10 ill 1970 (Fig 19).
2. Balance of payments
Prior to 1970, Zaire almost always had it favor
trade balance, but the narrowing trade surplus, plus
rising deficits in the services accomia and the
repatriation of investment income and salaries carried
by foreigners, brought the country ill 1970 its first
adverse balance of payments since tile 1967 fiscal
reforms. Some easing of pressure oil tll serv
account was expected following the impositi of liew
exchange controls i October 1971. restricting
Otitflows of expatriates' incomes to one-half of net paV,
instead of merely requiring that a minimum of $2(X
per month remain in the country. Increases in grants
arid import-financing lo inder bilateral and
multilateral foreign assistance programs have boosted
government transfers to Zaire in recent v ars
reaching a po)stindependence low in 196,S.' e after
Private capitz I outflo% Con t exceed foreign
capital inflows. although the latter have risen
significantl%. since tire 1969 UMHK settlement
removed a major obstacle to foreign investment. The
.'aPital account received a UcIC lx)ost in June
I *R' it. when Belgium agreed to assume the Belgian-
Cong(-Jese Amortization Fund. responsible for
liquidating all nonguaranteed debts contracted when
Zaire was a Belgian colony. At the time of til
agreement. the fund represented almut 40% of
Kinshasa's outstanding foreign debt arid a significant
portion of official capital payments.
Gross holdings of gold and foreign exchange reserves
increased from $48 million to $229 million from June
1967 to tire end of IW9, reflecting the favorable
balance of payments. With the deterioration in the
balance of payments in 1970, resen declined by
nearly $5 million and had declined b% art additiona
$18 million through September 1971 Gross foreign
exchange holdings of the Bank of Zaire were $171
million b% October 197 1, equivalent in value to about
two months' imports of goods air(] services (Figure 20).
3. Foreign economic policy and agreements
Zaire has maintained it llondiscriminatorY foreign
trade po)li following the pattern established %%-hen
the country was under Belgian control. No preferential
trade agreements exist. arid all countries receive the
same treatment in matters of trade and investme
Along with 17 other African states, Zaire in 1964 arid
1969 signed the Yaounde Convention, which governs
economic relations between the EC arid the :ignatory
African countries. Although its single column tari 6
precludes extending special treatment to goods
purchased from the EC, Zaire, as all associated
overseas country of the EC. receives preferential
treatment in EC markets all(] receives assistance from
the Common Market*s European Development Fund
(FED). Zaire does not maintain all% bilateral
payments agreements, ex those concluded with
the no. 'ighboring states of Uganda arid the Central
African Republic in IW6 to facilitate transit traffic
and reexports.
Zairp concluded an investment guarantee agree-
Illent with the United States in 1962, under which the
U.S. Government guarantees U.S. investors against
inconvertibility, loss due to expropriation, and loss due
to war. revolution, or insurrection. Zaire also is a
member of tile IMF, tile IBRD. the IFC, the African
Development Bank. arid the U.N. Econonli
Commission for Africa.
25
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FIGURE 18. Principal exports, 1967-70

A
ZAIRE
FIGURE 19. Direction of trade, 1970
FIGURE 20. balance of payments
Other EC
France Countries
Federal Republic
of Germany
1968
1969
1970
balance (f.o.b.)
278.0
277.4
256.-1
Services (net
-209.0
-215.8
-266.0
IMPOR S
-55.o
-63.4
-69.0
U.S. $626 Million
A
ZAIRE
FIGURE 19. Direction of trade, 1970
FIGURE 20. balance of payments
(Millions of U.S. dollars)
1968
1969
1970
balance (f.o.b.)
278.0
277.4
256.-1
Services (net
-209.0
-215.8
-266.0
Private transfers
-55.o
-63.4
-69.0
Government transfers
35.0
47.4
57.2
Balance on current accoLnt
49.0
45.6
-22.0
Private capital
-12.2
-0.2
Government capital
14.8
8.6
11.6
Balance on capital account
2.6
8.4
2.4
Frrors and omissions
-3.0
0.2
Allocation of SDRs
15.2
Net balance of payments.
48.6
55.4
--4.6
Net change in reserves*.
-48.6
55.4
4.6
Assets held by banking sy-t-
tem
21.6
4.6
-5.5
Gold and other assets
--70.2
60. 0
10.1
"Increase in reserves indicated
by minus 1.
26
Italy
970
Other IC
Countries
United States
United Kingdom
4. Foreign aid
Zaire has received large amounts of economic aid
from numerous individual countries and imiltina-
tional organi7ations. Prior to 1969, most (of this
assistancv was to support its balar of payments, by
providing essential ef)mmodities and technica'l
assistance; major donor% have been the 13nited States
and Belgium. U.S. economic aid to Zaire totaled
almost $450 million through 1971, with $396
million being support assistance and P.L. 480
shipments. Belgian aid has averaged around $25
million annually since 1966, primarily in the form of
technical assistance. Other sources of foreign aid
include West German%' France, the World Bank, and
the United Nations.
Since 1969, Zaire has begun to focus upon its long-
range development goals, with increasing emphasis
now being placed on project aid. In this field, the FED
is the principal financial source. Allocations by the
FED totaled over $90 million through 1969, centering
upon projects in the agriculture. education. and
electric power sectors.
UniuW
States
14%
1111W!11111111
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81""M
AazazvxATrox
i
FoREPUN
ENcLm
I CSZ
ENI
Compagnie Sucriere du Zaire
Zairian Sugar Company
FORMINIERE
Ente National 1 -%Lwburi
Societe jnt~j Fo restiere et
National Hydrocarbons Agency
International
Miniere du Congo
Forestry an Mi n i ng
C Of the Congo
GECAMLNES
La GeneWe des Carrie'es et des
Gerwral Quarries and Mines Com-
CECOIAINES
Mines du Zaire
Soci G enera l e Congolaise des Min-
pany of Zaire
General Congolese Ore Co.
erair
GEOMINES
Compa G eo l og i que et Mi niere des
Geological and Mining Co. of Bel-
INSS
Ingeneurs Industriels Belges
Institut National de Securite Sociale
gian Industrial Engirwers
XIVUMINES
Compagnie, Miniere 4de Kivu
National Social Security Institute
Mining Company of Kivu
METALZINC
Societe Miniere de Zinc
Zinc Mining Company
MCL
MIBA
Mini t Grarmis Lacs Africains
African Great Lakes Mining Co.
Societe Miniere de Baku;anga
Bakwanga Mining Company
ONC
Office National du Cafe
National Coffee Office
PEMARZA
Societe des Peches Maritimes du
Zaire Maritime Fishing Co.
Zaire
RECIDESO
Regie de Dirtribution crEat. et dElec-
Water and Electric Power Distribu-
tricite au Zaire et Ru;anda-Burundi
tion Administration of Zaire and
SCM
Societe Genmale de Minerais
Rwanda-Burundi
General Ore Company
SIBEKA
Societe crEntrepris et d'Investime-
Business and Investnwnt Compo
ment du Beceka
of Beeeka
SMTF
Societe Uiniere de TenkeFungurume
Mining Company of Tenke-Fungu-
SOCOBANQUE
Societe Congol de Banque
rume
Congolese Banking Company
SODIMIZA
Societe de Deveh4mement Industriel
Industrial Development and Mining
ct Miniere du Zaire
Company of Zaire
SOFIDE
Societe Financiere de Developpement
Development Finance Company
SOCECHIM
Societe Generale Industrielle et
General Industrial and Chemical
Chemique de Shaba
Company of Shaba
SOCEFI
Societe Nationale de Ges.ion et de
National Trust and Finance company
Financement
SOZIR
Societe 7 aire-Italienne Raffinage
Zairian-Italian Refining Company
SUCRAF
Sucrerie et Raffinerle do l"Afrique
Sugar Mills and Refineries of Cen-
Centrale
tral Africa
SYMETAIN
SVndlOat Miniere de rEtain
Tin Mining Syndicate
VMHK
Union Miniere du Hafst Katanga
Mining Union of Upper Katanga
Banque Commerciale Zairoise
Commercial Bank of Zaire
Banque de Kinshasa
Bank of Kinshrisa
Banque de Peuple
People's Bank
Societe Generate de Belgique
General Company of Belgium
Societe Miniere do Kisenga
Kisenga Mining Company
Societe Nationale dAssurancet
National Insurance Company
Zaire-Etain
Zaire-Tin Company
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FOR OFFICIAL USE ONL Y
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