AFRICA REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00289R000301390001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 23
• Document Creation Date: December 22, 2016
• Document Release Date: March 10, 2011
• Sequence Number: 1
• Publication Date: May 2, 1986
• Content Type: REPORT

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Directorate of
Intelligence MASTER FILE COY
I4 I j
Dill MAPIX ON
Africa Review
ALA AR 86-009
2 May 1986
Copy 3 8 6
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Africa Review
Central Africa Branch
Angola: UNITA Leader Savimbi-His Goals and Prospects) 1
The visit by Jonas Savimbi to Washington last January gave US
officials a closer look at the longtime Angolan guerrilla leader and
helped place him in current perspective. Savimbi's comments were
largely consistent with his earlier statements, confirming our view of
him as a pragmatic African nationalist. F--]
Mozambique: Economic Impact of the Insurgency I 9
Attacks by RENAMO insurgents have disrupted rail, road, and port
transportation, reduced mine and farm output, caused electric power
outages, enlarged refugee populations, and led to devastating food
shortages. F--]
Chad's West African Neighbors: Accommodating Qadhafi I 15
Libya's continuing occupation of northern Chad and Qadhafi's
increasing propensity to interfere in the affairs of his neighbors are
worrying moderate West African leaders and forcing many to opt
for accommodation rather than risk Libyan subversion of their
regimes.F-~
Brief Mozambique: Bank Scandal Jeopardizes IMF Agreement
Articles have been coordinated as appropriate with other offices within CIA.
Comments and queries regarding this publication may be directed to the Chief,
Production Ste Office of African and Latin American Analysis
Secret
ALA AR 86-009
2 May 1986
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Angola: UNITA Leader Savimbi-
His Goals and Prospects F-]
The visit by Jonas Savimbi to Washington last
January gave US officials a closer look at the
longtime Angolan guerrilla leader and helped place
him in current perspective. The National Union for
the Total Independence of Angola (UNITA) leader's
comments were largely consistent with his earlier
statements and confirmed our view of him as a
pragmatic African nationalist.)
Savimbi's goal is to force the Angolan Government to
the bargaining table by waging a protracted war that
convinces the Popular Movement for the Liberation of
Angola (MPLA) regime that it cannot win and must
negotiate. Confident of his staying power and South
African backing, Savimbi believes UNITA can blunt
this year's major offensive by the Angolan
Government, which managed to regain the military
initiative in 1985 for the first time in several years.
In the next 12 to 18 months, we believe that the
fighting probably will be the most intense of the civil
war, with tactical gains and losses on both sides, but
that neither side will deliver a knockout punch.
However, there is a growing risk of a direct
confrontation between South Africa and Angola's
Soviet and Cuban backers)
Savimbi's US Visit
Savimbi set the tone for his visit to Washington by
publishing his latest comprehensive statement on
UNITA's goals and strategies last December in the
United States. Throughout his visit, he paraphrased
repeatedly the key points in his article, which is
entitled "The War Against Soviet Colonialism: The
Strategies and Tactics of Anti-Communist
Resistance." In that piece, he laid down markers on
his domestic philosophy, economic approach, and his
foreign policy. Savimbi is well aware of the value of
the press-he has had extensive experience with the
Western media-and made good use of this
opportunity to seek further sympathy and support.
Propaganda motivations aside, Savimbi, in our
judgment, spoke in terms that are consistent with the
basic tenets of his philosophy.
Savimbi's Domestic Philosophy
Savimbi today, in our judgment, is first and foremost
an African nationalist. He has stated repeatedly his
firm belief that no foreign political ideology-be it
Communism or democracy-has a place in Angola
unless altered to suit local conditions. As in the past
before Western audiences, Savimbi promised again
during his Washington visit to hold free elections and
to protect basic human rights if UNITA came to
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2 May 1986
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power. He noted, moreover, that UNITA is organized
along the lines of a mass organization or a front
rather than as an elitist vanguard party like that of
the ruling MPLA government in Luanda.'
A Savimbi in power in Luanda, in our view, provides
no guarantee that a multiparty system would emerge
or long endure. With few exceptions, most African
leaders-including moderates like Kenya's Moi and
Cameroon's Biya-have centralized power under the
auspices of a one-party state. Should Savimbi follow
suit, we judge that he probably would remain sensitive
to the need to have some open discussion and consen-
sus making, as well as to include in his government
representatives from Angola's three largest ethnic
groups: his own Ovimbundu, the MPLA's Kimbundu,
and the Bakongo. F__1
Indeed, Savimbi reaffirmed privately during his
Washington visit that he would redouble efforts to
gain broader based ethnic support and include more
representatives from Angola's various ethnic groups in
UNITA's leadership. During the visit he demonstrat-
ed the ethnic mixture of his current leadership by
asking each individual to stand and state his tribal
background.
iguel Puna, the number-two man,
is a Bakongo andLthe remainder of the UNITA
senior echelon contains a sprinkling of Angolans from
other ethnic groups. In his December policy state-
ment, Savimbi stated:
Our first goal had to be to win their [the
peoples J allegiance and confidence. Without the
support of the people, our roads would be mined
with informers. With it, we have an intelligence
network alerting us to enemy troop movements
out of the cities, and we do not need to carry all
our food and supplies with us-critical to a
guerrilla movement that has to travel thou-
sands of kilometers by foot and possesses nei-
ther trucks nor access to rail travel.)
While Savimbi, in our judgment, may be overstating
the success UNITA has had in broadening its ethnic
base,
'Our comments on how Savimbi would behave as a government
leader are obviously speculative in nature. They are based both on
Savimbi's performance as leader of UNITA
as well as on the programs he has publicly outlined for his
organization.F_~
JUNITA has focused on recruiting outside Ango-
la's central highlands, the traditional homeland of the
Ovimbundu. We know, for instance, that UNITA has
recently been active in recruiting personnel as far
afield as the Bakongo-inhabited provinces of Zaire
and Luanda Norte in Angola's far north. We also
believe that the MPLA's decision at its party congress
last December to expand government services to the
rural areas and include military representatives from
outlying areas in the Central Committee in part
reflects Luanda's concern about UNITA's drawing
power.F__1
misrule by
local authorities under the MPLA and its religious
intolerance have helped UNITA to gain greater hear-
ing among other ethnic groups. As opposed to MPLA
practice, Savimbi's past public statements suggest
that he would place local-level officials in or near
their home provinces and encourage them to deal
respectfully with local chiefs and headmen as allies
rather than undermine their traditional authority. In
our view, Savimbi-who claims to be a Christian and
an adherent of the United Church of Christ, which
funded his early university studies abroad-would be
more tolerant of Angola's various Christian churches
and their activities in rural areas.
Economic Theory
Savimbi has dismissed foreign economic models as
irrelevant to Angola without adaptation. Rejecting a
totally centrally planned and controlled economy,
Savimbi advocates mixed control by the government
and private enterprise. Such a system is followed in
various forms by the majority of African states and is
typically referred to as "African socialism." The
UNITA leader claimed during his US visit to be
experimenting with his version of African socialism by
operating UNITA-owned and private farms near
UNITA's capital of Jamba in southeastern Angola.
Like most African leaders, Savimbi has said he is not
a capitalist, and was careful to state during his visit
that the government must provide essential services to
the population, such as free education and medical
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Ethnic and racial rivalries underlie Angola's political
and factional divisions, including ideological and
personality clashes between its competing actors.
Angola has over 100 different tribes, but three-
fourths of its estimated 8 million people belong to one
of three major tribal groupings. Unlike Mozambique,
for instance, where during the march to independence
one primary nationalist group sought to unify the
people, in Angola three rival movements drew their
support from three main ethnic groups.n
The ruling MPLA government traditionally has
received its principal support from the Kimbundu
ethnic group, Angola's second-largest group and
about 25 percent of the population. The Kimbundu's
home territory includes the capital of Luanda, and
President dos Santos and most of his closest
supporters are of this tribe. The MPLA has been the
most multiracial of the movements, but more recently
rivalries between blacks and mulattoes have been a
source of factional contention. Neto Alves, a black
politburo member, led a black populist coup attempt
in 1977 against the late President Neto and his fellow
mulattoes, which was put down with the help of
Cuban troops. Today, dos Santos and his governing
coalition represent the ascendant black majority
within the party, but dos Santos still has to deal
carefully with a mulatto-led faction of pro-Soviet
ideologues headed by Lucio Lara, a founder of the
MPLA in the 1950s. F-1
Like Savimbi, most of UNITA's insurgent rank and
file probably are Ovimbundu, the largest single
group, with about 37 percent of the population
concentrated in the central highlands. UNITA's
leader has been making a concerted effort to broaden
his ethnic base, and has achieved some success. The
government tries to play on the theme of historic
rivalries between the Ovimbundu and other peoples,
however, frequently describing UNITA in
radiobroadcasts as Ovimbundu dominated and riven
by ethnic divisions.)
The Bakongo, who inhabit Angola's far northwest
and the exclave of Cabinda, once provided the
primary base for Holden Roberto's now moribund
Front for the Liberation of Angola (FNLA) that was
the leading opponent of the MPLA in the 1975-76
civil war before being routed. Prior to the arrival of
the Portuguese in the 15th century, Bakongo
tribesmen dominated an area that extended over
much of what in now Angola, Zaire, and Congo.
Legends of past glory remain a unifying factor among
the Bakongo.n
care. We believe, however, Savimbi would almost
certainly pursue programs that encouraged economic
growth by offering considerable scope for free
enterprise and foreign private investment. During his
trip to Washington, Savimbi repeatly em hasized his
desire for private enterprise in Angola
We believe Savimbi's economic philosophy has
evolved over time. Twenty years ago, he, along with
other African leaders, espoused economic policies
based on purer socialist models. In the wake of
European colonialism in black Africa, such models
appeared to many Africans to be the best hope for
black Africa's economic development. Today,
however, Savimbi's comments suggest that he-and
some other black African leaders-perceive things
differently, especially given the poor performance
they have seen in states that strictly followed socialist
models. Indeed, US Embassy
from other parts of the continent reveals a trend in
some countries toward less state control and more
reliance on private capital and market institutions.
During his US visit, Savimbi repeatedly criticized
Soviet collectivism, claiming it would always fail
because it offers individuals no incentive to excel. His
rejection of a Marxist-Leninist socialist model was
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i
stated clearly in his December policy statement:
The second weakness of the Communists is
economic. The Soviets may provide enormous
quantities of arms but they refuse economic aid
and, while it is UNITA's goal to damage the
export economy that finances the Cuban war
against our people, the Soviet and Cubans are
doing much of our work for us by nationalizing
all industry and collectivizing agriculture.
Around the world, Communist governments
lower the standard of living, destroy chances to
work, and impoverish the people in a way that
guerrilla wars never do.
Moreover, he made it clear while in the United States
that he believes the philosophies of Mao fail to
provide an appropriate model for running an economy
or a nation, despite his admiration for and emulation
of Mao's guerrilla warfare tactics.
Foreign Policy
While Savimbi said little about foreign policy goals
during his recent visit, he did state clearly that:
? He does not want Angola caught up in an endless
struggle between the United States and the USSR.
? He views the USSR and Cuba as the new colonial
masters in Africa, who are causing greater damage
throughout Africa than West European colonialism
ever did.
Moreover, Savimbi stated his intention to visit West-
ern Europe later this year in an effort to gain
additional aid.)
The wide range of foreign governments that have at
one time or another supported UNITA-from Beijing
to Pretoria-suggests that a Savimbi regime would
pursue a nonaligned foreign policy, but probably with
a pro-Western slant. Because of his pragmatic nature,
we judge that Savimbi in power would probably
continue to retain close links not only to old friends
that have provided him assistance-some conservative
Arab and moderate Africans, together with France
and conservative politicians in West Germany-but
also to additional countries that he viewed as capable
of playing a useful role in Angola's domestic affairs.'
Such countries could even include some East Europe-
an countries, although we believe Savimbi would
almost certainly view any Soviet or Cuban overtures
with deep suspicion. At the same time, in our view,
Savimbi could be expected to exert a strong measure
of control over any foreign activities in his country.
Savimbi has been forthright in acknowledging his ties
to South Africa,
During his recent visit,
for instance, Savimbi told several audiences that the
geographic realities of southern Africa compel many
black African leaders, including Mozambique's Ma-
chel and Zambia's Kaunda, to deal openly with
Pretoria.)
The Angolan guerrilla leader is especially sensitive to
charges from black African leaders that he is a South
African lackey. If in power, we believe he probably
would distance himself-at least outwardly-from
South Africa, and might stop short of establishing
diplomatic relations with Pretoria. Only one other
OAU country-Malawi-has such relations. Savimbi
might also attempt to work with moderate black
leaders inside South Africa.
Insurgent Goals: On the Battlefield
and at the Bargaining Table
Basic Strategy. Various US officials with whom
Savimbi talked report that he spoke both confidently
and realistically-for the most part-about his goals
on the battlefield and at the bargaining table. Al-
though acknowledging candidly that UNITA cannot
win an outright military victory, he told several
audiences that UNITA hopes to "kill the MPLA's
illusion that there can be a military solution." This, he
asserted, could only be achieved by making the war a
continued standoff, and he stressed the need for
defensive rather than offensive weapons to enhance
his military staying power. F_~
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The UNITA leader admitted that the military
momentum had swung last year for the first time to
the Angolan forces after several years of steady
insurgent progress. However, he asserted-and we
agree-that the guerrillas are far from beaten and
that his movement will remain a major threat to the
MPLA and to Soviet-Cuban domination of Angola.
Savimbi believes that UNITA's ability to blunt the
Angolans militarily over the near-to-medium term
will provide bargaining strength over the longer term,
hopefully as the military struggle evolves into a
political contest. Savimbi repeated during his visit his
longstanding contention that, in order for Angola to
be at peace, Luanda must return to the Alvor accord.
The MPLA, UNITA, and National Front for the
Liberation of Angola signed this accord with the
Portuguese in January 1975-10 months before
independence was granted-to create the framework
for a coalition government and for eventual popular
elections. Savimbi adamantly insists that, had the
MPLA not undermined the agreement by bringing in
Cuban troops, the Angolan people would have
selected their government at the polls rather than on
the battlefield.F___1
In addition, Savimbi claims he could work
comfortably with the MPLA in a new transition
government-a view we find hard to believe after
years of bloody and bitter conflict. He told one
audience such a government could need up to three
years to rehabilitate the country before free and fair
elections could be held. Not surprisingly, Savimbi has
expressed certainty-as he did in 1975-that he
would win such an election. F_~
While avoiding giving specifics
Savimbi suggested that he and other UNITA
members have "regular" contact with MPLA
officials-which we cannot confirm-and that, public
protestations aside, strong sentiment for a
reconciliation exists within the MPLA. Savimbi's
belief that a successful UNITA-MPLA reconciliation
could be achieved appears to be based, in our
judgment, as much on his perceptions of popular
yearning in Angola for such a move as on any specific
talks he or other UNITA leaders might have held
with Angolan officials. Savimbi told several audiences
during his trip that it mattered little who specifically
sat in the MPLA leadership slots. More important, he
claimed, is that all Angolans are fed up with the war
and want it to end. The average Angolan, according
to Savimbi, shares the view of the Catholic Church,
which has repeatedly called for national
reconciliation.
Savimbi's optimism on negotiations contrasts with the
seeming determination of the MPLA government and
its Communist backers to pursue a military solution
after regaining the initiative in 1985. The MPLA at a
major party congress last December stated publicly
that prosecution of the war against UNITA is its top
priority, and Luanda has recently taken an
increasingly hard public position on regional
settlement talks and on the prospects for a withdrawal
of Cuban troops.F__1
Arms and Tactics. In private discussions with US
officials, Savimbi outlined the arms and tactics
UNITA needs to blunt the MPLA's next major
military offensive that could begin soon after the end
of the rainy season in April. Savimbi repeated his
request for antiarmor and antiaircraft weapons, and
believes he has gained valuable lessons from last
year's fighting. He plans a tenacious defense of
UNITA's stronghold territory in southeastern
Angola, increased activity in urban areas, and
continued-if not stepped-up-operations in central
and northern Angola. Savimbi said UNITA will
employ a flexible, mobile defense that makes fuller
use of guerrilla tactics and tries to avoid conventional
setpiece battles. He also acknowledged that UNITA
would give some ground-possibly including Mavinga
in the southeast-rather than risk costly losses. In
private, Savimbi claimed he had no reason to believe
that Pretoria would not assist him militarily if "push
came to shove," as it did in 1985.
Implications for US Regional Interests
In our judgment, UNITA is unlikely over the next 12
to 18 months to be able to put enough military
pressure on the MPLA to force it to the bargaining
table. We believe the fighting this year probably will
be the most intense of the civil war, with tactical gains
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and losses on both sides, but that neither side will
deliver a knockout punch. While Luanda may regain
some UNITA-held territory or positions, such as the
town of Mavinga, the MPLA will not be able to
suppress UNITA as a significant threat. Savimbi's
comment to one audience in Washington that "I've
been at this for over 20 years," suggests a man who
expects nothing less than a protracted struggle and is
prepared to continue itF_~
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Our most likely scenario-a continued standoff
between UNITA and the MPLA-carries old
problems and new challenges for the United States:
? The continued presence in Angola of large numbers
of Cuban troops as well as 1,200 Soviet military
advisers.
? Undiminished South African concern about its
security and reticence to move toward granting
Namibia genuine independence.
? Uneasiness on the part of both Zaire and Zambia
about the spillover of fighting into their territory.
Zairian officials are probably already concerned
that Angola, with Soviet backing, may arm Zairian
dissidents in retaliation for Zaire's behind-the-
scenes support for Savimbi.
? Despite the apparent Soviet and Cuban aversion to
frontline combat, we believe there is a growing
danger that the Soviet, Cuban, and South African
support to their clients in this year's fighting to
come may draw these outside backers into more
direct conflict.)
A much less likely scenario, but one that carries even
greater liabilities for US interests, would be an
outright MPLA victory against UNITA in the near
term. Such a victory would necessitate, in our view, a
sustained, Soviet- and Cuban-backed, Angolan
Government push-in spite of a tenacious UNITA
defense and likely South African counterstrikes-that
reclaimed most of UNITA's stronghold territory in
the southeast, including its capital at Jamba, and
? A major blow to UNITA would provide no
guarantee, in our judgment, that all of the Cuban
troops now in Angola would depart.
Luanda government almost certainly would remain
concerned about the perceived threat of South
Africa and the possibility of a UNITA revival with
stepped-up Western assistance. Moreover, Cuban
President Castro's public announcement at a recent
Cuban party congress that there can be no total
withdrawal of Cuban troops from Angola until
apartheid has ended suggests that the Soviets and
Cubans may see a Cuban presence in Angola as
useful for their long-term ambitions in Namibia and
in South Africa.
? An MPLA victory would probably harden South
Africa's position on Namibia. Pretoria's concerns
about SWAPO incursions into Namibia would
intensify, as would South Africa's desire to assist a
Namibian-based UNITA in regaining lost territory
in Angola. An overly confident Angola might-at
Soviet or Cuban urging-increase its assistance to
SWAPO in an effort to heighten military pressure
on Namibia.
? Zaire would fear that Luanda, with Soviet and
Cuban encouragement, would give greater attention
to anti-Mobutu dissidents that invaded Zaire's
mineral-rich Shaba region twice in the late 1970s.
An equally unlikely scenario, in our view, during the
next year would be UNITA gains on a scale that
would lead the MPLA to negotiate seriously with
Savimbi. We believe that, even if talks were to begin,
' Additionally, the death of Savimbi himself-a distinct
possibility-would have similarly dire consequences for UNITA's
prospects. We have no information to predict an imminent
assassination attempt against Savimbi, but sporadic reports appear
from the open press of recurrent
planning by the MPLA and the Cubans to assassinate the UNITA
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the obstacles to an agreement on a coalition
government would be very difficult to surmount after
a decade of bitter fighting. F-1
During and after negotiations toward the formation of
a coalition government, each side would face a
number of key internal strains:
? Personal rivalries within the leadership.
Undoubtedly fearful of Savimbi's charisma and
political skills, the MPLA has always maintained
that it could never reconcile with Savimbi himself
but only with UNITA's rank and file. Savimbi has
repeatedly and openly stated that he regards his
leading role in a coalition government as a given,
and he is unlikely to compromise on the issue.
? Tribal and regional differences. These factors have
deeply divided Angolan political groups beginning
with the preindependence struggle against
Portuguese colonial rule. More than a decade of
civil war has only sharpened ethnic differences.
There is no tradition of rule by compromise and
consensus so necessary to the success of coalition
government. In our view, Angola's rivalries are no
less acute than those in such states as Nigeria,
Chad, Zimbabwe, Uganda, and Ethiopia.
? Frictions between rival UNITA-MPLA military
forces. Even if tribal and regional differences could
be contained, any coalition government would face
the severe challenge of merging the now opposing
armies. In this regard, Africa's track record holds
little promise, in our view. Indeed, we regard
Zimbabwe, where the militaries of three rival
preindependence groups have successfully merged,
as the exception rather than the rule.
Moreover, the temptation to call on external backers
would always be lurking in the background if the key
interests of any party appeared to be threatened. F-
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Mozambique: Economic Impact
of the InsurgencyF-l
Mounting insurgent activity has created severe
problems for Mozambique's already weak economy.
Attacks by the Mozambique National Resistance
(RENAMO) have disrupted rail, road, and port
transportation; reduced mine and farm output; caused
electric power outages; enlarged refugee populations;
and led to devastating food shortages. Falling exports
and transport services to neighboring countries have
caused severe foreign exchange shortages and forced
Maputo to make major cuts in imports. Finance
Minister Rui Baltazar Alves reported in December
1985 that GDP contracted by 20 percent last year
despite the end of a severe drought. F___-]
Reacting to the economic crisis, President Machel's
government has initiated a limited reform program
designed to increase the role of the private sector and
reduce the inefficiencies of the socialist economic
system. Although production has increased somewhat,
the improvement will not be sufficient to reverse the
economic contraction in 1986, in our judgment. We
believe economic problems will remain a major force
behind the political threat posed by the insurgency to
the government.F_~
Although none of Mozambique's three ports has been
seriously damaged, reduced rail traffic and electric
power outages because of the insurgency have
contributed to a steep fall in port shipments. Attacks
against electric power lines to Maputo in January, for
example, cut power to cargo-handling cranes and
slowed loading for more than a week. Tonnage
handled through Maputo has dropped by about two-
thirds since 1982, according to our estimates on the
basis of US Embassy reporting. Beira is being used at
about one-half its capacity, according to press and
IMF reporting. Malawian goods that in normal
circumstances would have been shipped through
Nacala have been diverted to South African ports.
RENAMO's destruction of pylons on the electric
power line to South Africa has virtually shut down
Mozambique's Cabora Bassa hydroelectric complex.
Railroad closures have cut coal production at Moatize
by over 90 percent since 1980. Tantalum mining at
Morroa in Zambezia Province has been at a standstill
since the kidnaping in late 1983 of 24 Soviet
geologists there. F_~
Economic Targets
Land transportation facilities have been major
insurgent targets. Rocket fire, derailments, mines,
and blown-up bridges have closed the main rail lines
from Maputo to Zimbabwe and from Mozambique's
northern port of Nacala to Malawi for more than a
year each. Also closed or operating at sharply reduced
rates are the three rail lines from the port of Beira to
terminals in Zimbabwe, Malawi, and at domestic coal
mines and farms in Tete Province. Attacks have
repeatedly interrupted traffic on the two cross-
country railroads from Maputo to South Africa and
Swaziland. Insurgent activity has forced road traffic
to travel in armed convoys protected by troops and
armored vehicles, and in some areas the military has
felled trees and leveled houses to create free-fire zones
along heavily attacked roads.
Severe Food Shortages
Abetted by alternating drought and floods over the
past few years, RENAMO has caused deep cuts in
the production of food and export crops. Attacks on
farm installations and road transport, for example,
cut corn harvests on the large state-owned Caia farm
complex in Tete by 95 percent, despite a sharp
improvement in weather. Farmers abandoning their
land because of insurgent pressures have more than
doubled the population of Moatize to about 75,000,
according to US Embassy reporting. In January,
insurgents destroyed the sugar refinery at Marromeu,
one of only three in the country that had still been
operating. F_~
Secret
ALA AR 86-009
2 May 1986
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Tanzania
Cabo
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Zambia
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hydroelectric
L complex
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r.
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$Nacala
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arromeu
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Cas Banana
u ent base
Beira
M6zambique
L.
Bdtswana
1~` f
OInhambane
Gaza
Sou,th Afric
PRETORIA
'
MAPUTO
(MBASAN
cSwaziland
-Province boundary
0 150 Kilometers
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RENAMO has an estimated strength of 15,000
guerrillas and operates in rural areas of all 10
Mozambican provinces. RENAMO regained the
tactical initiative early this year following setbacks in
August 1985, when a government offensive,
spearheaded by troops from neighboring Zimbabwe,
pushed the guerrillas out of the Gorongosa
mountains. Significant RENAMO developments
since then include the recapture-and subsequent
loss-of its former headquarters at Casa Banana and
an increase in terrorist-type activities near Maputo.
Mozambique's Army, which numbers about 35,000
troops and several thousand militia, is poorly led,
demoralized, and short of everything from boots to
helicopters
The active combat role played by more than 5,000
Zimbabwean troops has been all that has prevented
RENAMOfrom dominating the central region of
Mozambique. When the Army was unable to hold
Casa Banana, however, Zimbabwe temporarily
ordered its forces to cease large offensive operations
in the belief that it was pointless to seize territory
that the government could not hold. F__]
Drought cut harvests of corn, rice, and other staple
crops in half in 1984, according to Embassy reporting.
The decline continued because of the insurgency
during 1985-86, and the FAO projects that grain
marketing-over and above that consumed by
subsistence farmers-in the crop year beginning this
May will total little more than one-tenth of
requirements. Foreign exchange shortages forced
Maputo to cut commercial imports of grain in 1985
and to increase heavily its dependence on deliveries by
foreign aid donors to meet minimum food
requirements.
Foreign Exchange Constraint
The impact of the insurgency on the country's ability
to earn foreign exchange has hurt the economy more
than direct damage from armed attacks, in our
judgment. Sketchy data indicate that exports declined
from about $230 million in 1982 to only $75 million in
1985. The shutdown of cross-country railroads,
moreover, has slashed foreign exchange earnings from
services, which historically had offset large
merchandise trade deficits. As a result, Mozambique
has had to pay more since 1983 for foreign services
than it has earned. Maputo has reacted by cutting
imports by nearly one-fourth since 1982. The large
current account deficit-about $600 million in
1985-has been covered by foreign aid inflows and a
rapid buildup of arrearages on foreign debt
repayments.F__1
Shortages of imported commodities have caused
production losses throughout the economy:
? A variety of press and US Embassy reports
indicates that shortages of spare parts have idled
large numbers of farm tractors throughout the
country, and that fuel shortages limit the usefulness
of serviceable tractors.
? Four of the five sawmills in Cabo Delgado Province
are inoperable because of lack of maintenance and
spare parts, according to Embassy reporting.
? Fuel shortages that have held up truck and train
deliveries have hamstrung a program to distribute
clothing and other consumer products to rural areas
to barter for farm crops. With nothing to trade,
local officials have been unable to induce farmers to
increase planting for urban food markets and to
expand the harvesting of cashew nuts, which have
declined by more than three-fourths since 1982 and
have fallen from first to third among Mozambique's
exports.
? Shortages of raw materials, fuel, and spare parts
have severely restricted production of items ranging
from soft drinks and hand-pushed plows to
vegetable oil, shoes, and batteries during the past
few years. F__1
The cuts in imports and fall in industrial and farm
production have shrunk the tax base significantly. As
a result, government revenues have fallen by nearly
one-half since 1982 to about $380 million in 1985.
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Central to Mozambique's bleak economic
performance is its loss of competitiveness in providing
services to South Africa and other neighboring
countries. Foreign exchange earned from transport,
labor, tourism, and electricity sales had covered a
large annual Mozambican trade deficit. Spurred by
the deterioration of services following Mozambique's
independence in 1975, the South African government
and private firms have constructed major alternative
facilities:
? South Africa has developed a large new Indian
Ocean port at Richards Bay and has significantly
upgraded railroads to ports at Durban, East
London, and Port Elizabeth since Mozambique's
independence. As a result, South African shipments
handled by Maputo dropped to less than I million
tons in 1985, compared with 4.3 million in 1979
and nearly 7 million in 1973. In addition, South
Africa now has sufficient port and rail capacity to
handle virtually all overseas trade by neighboring
countries that formerly had relied heavily on
Mozambique-Zimbabwe, Zambia, Malawi,
Swaziland, and southern Zaire.
? South African mines have reduced their hiring of
Mozambican migrant workers from about 120,000
at independence to 45,000 currently, and Pretoria
has ended a gold-for-labor agreement that had
netted the Mozambican Government about $2.5
billion in foreign exchange annually.
? Major new hotels and casinos constructed by South
African firms in Bophuthatswana, Lesotho, and
Swaziland have provided attractive alternatives to
formerly popular Mozambican hotels and beaches.
? Large new electric power plants fueled by coal have
eliminated South Africa's need for electricity from
Mozambique's hydroelectric plant at Cabora
Bassa.
Despite this reduction, the pressing need to battle the
insurgency induced the government to increase
military spending in 1986 to 42 percent of budgeted
expenditures. In contrast, Mozambique has closed
large numbers of schools since 1983 because of
funding shortages.
Government Reaction
Rising concern over the continuing economic
deterioration induced the government to launch a
limited economic reform program during its fourth
party congress in early 1983. The program, which is
designed to increase the participation of private firms
in the economy and attract foreign investment, has
five elements:
? Distributing agricultural land from state farms to
cooperatives and private farmers.
? Increasing selected prices, particularly of food, to
encourage production and marketing.
? Returning some nationalized manufacturing firms
to private ownership.
? Strengthening Western economic ties by joining
international financial organizations such as the
IMF and the IBRD and soliciting private
investment by US and other Western firms.
? Reestablishing economic ties to South Africa
Steps taken to implement the program thus far
indicate that the government is willing to make a
substantial effort toward increasing Western and
South African ties and stimulate production by
reducing government control. In 1984 Mozambique
joined the IMF, the IBRD, and the Lome Convention;
signed an OPIC agreement with the United States;
and enacted a liberalized investment code that
guarantees profit repatriation and offers tax
incentives to potential investors. Maputo also signed
an accord with South Africa at Nkomati in 1984
designed to end South African aid to RENAMO and
attract South African investors. Following these
initiatives, the Paris Club agreed to reschedule
Mozambican debt in October 1984, and the IBRD
granted a $45 million loan in 1985. Maputo currently
is considering IMF conditions for a standby
agreement. F-~
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Maputo distributed about 13,000 hectares of state-
owned land during 1983-84 from the Limpopo agro-
industrial complex in Gaza Province to private
farmers. Prices of manioc, sweet potatoes, fruits,
onions, ducks, and turkeys were deregulated in May
1985, and other farm prices were increased. As a
result, a variety of vegetables that had been
unavailable for more than two years began to appear
in Maputo's urban markets by mid-1985, according to
press reporting.F_~
The government also has turned over more than 20
manufacturing firms to local businessmen, and a
small number of US and other foreign firms are
interested in investment projects. The UK-based
London Rhodesia Company (LONRHO), which has
large farm and industrial investments in neighboring
southern African countries, has begun projects in
farming, mining, tourism, and railroad rehabilitation
that may total $30-40 million by 1990. US firms have
undertaken preliminary oil exploration activities and
are looking at mining and farming projects. South
African firms have completed feasiblity studies for a
large farm project, and a Zimbabwean firm has
entered a small joint venture project with the
Mozambican Government to mine bauxite.
Gloomy Outlook for 1986
The economic impact of insurgent attacks will
continue to outweigh the positive effects of Maputo's
limited reform program during 1986, in our
judgment. We believe that Zimbabwe's reluctance
during February and March to engage in large-scale
offensive operations in Mozambique made it easier for
RENAMO to attack roads, trucks, and farms in the
central third of the country. As a result, the problems
of distributing farm inputs, such as fertilizer and
spare parts, and of moving farm products to urban
markets over the already badly disrupted transport
system worsened. Food imports will plummet in 1986
because of foreign exchange shortages, and the
country will require almost 450,000 tons of food aid
deliveries, according to Embassy reporting. Fuel
shortages will increase this year, in our judgment
because requirements for arms imports and servicing
of massive foreign debt-which now exceeds $2.4
billion, according to Embassy reporting-will
continue to drain foreign exchange.
Mozambique: Million US $
Balance of Payments
Current account
-577
-505
-476
-610
Exports
229
132
95
75
Imports
-836
-636
-539
-650
Net services
30
-1
-32
-35
The insurgency and foreign exchange crisis also will
undermine any positive effects from the return to
private ownership of urban businesses and the
enthusiasm of private foreign investors. Fuel,
electricity, and raw material shortages will continue
to hamper factory output. Major investors will have to
bear significant additional costs for security because
of the Army's inability to provide protection.
private farmers are providing
room and board to troops in return for protection.
We believe Machel is acutely aware of the negative
impact his government's socialist policies have had on
Mozambique's economic situation. In a speech to the
Mozambican People's Assembly, he criticized "ultra
leftist errors" that had reduced food production by
interfering with the distribution of tractors and other
farm inputs to private farms and cooperatives.
Machel's concern with redressing the shortcomings of
the socialist system, however, has little chance of
offsetting the economic impact of the insurgency, in
our judgment. As a result, we expect the economy to
contract again this year and to continue to comprise a
major part of the political threat posed by the
insurgency to the Machel government.
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Chad's West African Neighbors:
Accommodating Qadhafi ~
Libya's continuing occupation of northern Chad and sizable Libyan communities in Kano and Maiduguri
Qadhafi's increasing propensity to interfere in the have access to religious and economic circles that
affairs of his neighbors are worrying moderate West facilitate recruitment efforts.
African leaders and forcing many to opt for
accommodation rather than risk Libyan subversion of F
their regimes. Libya already has attempted to
undermine the pro-Western governments in Niger,
Nigeria, Cameroon, and the Central African
Republic by providing arms, training, and funds to
dissident and exile movements. It has recruited
students and migrant workers in these countries to
undergo ideological and military training in Libya,
and most recently it has carried out terrorist attacks.
Libya also has stepped up efforts to gain influence
among large and influential Muslim populations in
these states. These moderate regimes have found it
almost impossible to stem Libyan infiltration across
their porous borders or curb illicit activities by
officially accredited Libyan diplomats. F--]
Nigeria
Nigeria has tried to provide a counterweight to
growing Libyan influence in West Africa, but it has vulnerable to Libyan influence peddling among the
been powerless to prevent Tripoli from meddling even
within Nigerian borders because of serious domestic
troubles and a large and influential Muslim
population. The US Embassy reports that Islamic
fundamentalism is growing in northern Nigeria,
especially in schools and universities, where growing
numbers of students criticize Western culture and
idealize Muslim asceticism. To accommodate this
movement and to garner Arab economic aid,
President Babangida recently announced Nigeria's
membership in the Organization of the Islamic
Conference, a move that has triggered an
inflammatory debate between the country's Muslims
and Christians. We believe Babangida will remain
reluctant to condemn Libyan activities publicly for
fear of offending the Muslim communities.)
Libya has exploited Lagos's preoccupation with
internal problems to recruit West Africans residing in
Nigeria to fight in northern Chad. We suspect the
The Embassy in Lagos reports that Libyan activity
among Chadians resident in Nigeria has included
subversion and efforts to undermine Chadian
President Habre's reconciliation programs.
Frequently changing governments have left Nigeria
leadership, in our view.
Secret
ALA AR 86-009
2 May 1986
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Niger
Niamey's ability to oppose Libyan subversion is
complicated by Niger's proximity to its more powerful
neighbor, the vastness and ungovernability of the
northeastern border region, and its tenuous economic
circumstances. The US Embassy reports that
President Kountche is keenly suspicious of Qadhafi's
regional objectives and believes he is on Qadhafi's hit
list, but he rarely takes public stands against Libya.
Kountche has noted to US officials that Qadhafi has
attempted to infiltrate the Nigerien Army without
success, turn minority tribesmen against the regime,
and penetrate student and labor movements. There
are some 1,100 Nigeriens in Libya, including
politically motivated opponents, mercenaries who
have joined the "Islamic legion" in the Libyan Army,
and individuals seeking employment. Kountche fears
that many of these people will return to Niger to
subvert his regime, according to Embassy reporting.
Kountche believes that Qadhafi has territorial designs
on Niger's far northeastern territory, on the basis of a
claim in the unratified Laval-Mussolini accords of
1935 the Libyans
built an airstrip last year at Toummo, just inside their
border.
Chad, which allows large numbers of Chadian
refugees to seek safehaven from the intermittent
In our view, the porous border between Cameroon an
Cameroon
insurgency in southern Chad, also provides Libya wit
opportunities to penetrate Cameroon's predominantly
Muslim north.
Moreover, the US Embassy reports that
Yaounde may reestablish relations with Israel later
this year. We believe such a move could trigger
resentment among Muslims-which make up about
one-third of Cameroon's population-and further
stimulate the rise in Islamic fundamentalism recently
noted by the Embassy.
President Biya is wary of the Libyans and seeks to
keep them at arm's length. According to the US
Embassy in Yaounde, Biya fears Libya may retaliate
for his diplomatic and material support of President
Habre-Cameroon has provided some $800,000 to
N'Djamena to help pay military salaries.
Nevertheless, by permitting a five-man People's
Bureau in Yaounde, Biya hopes to maintain cordial
ties to Tripoli and avoid giving Qadhafi a pretext for
meddling in Cameroon's internal affairs. F__1
Central African Republic
We believe that Qadhafi probably hopes to overthrow
President Kolingba's regime, which supports
President Habre and has close ties to France and
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The Embassy notes that the Libyan People's Bureau
in Bangui has not been effective in promoting better
bilateral relations because of many clumsy acts
committed by its personnel. The Libyans have been
observed surveilling the airport and the President's
residence at odd hours, and authorities in Bangui
allege Libyan involvement with Central African high
school and university students, who are currently on
Bangui has tried to pull away from Tripoli in the past,
without offending Qadhafi, but recently has more
boldly protested Libyan subversion. Press reporting
indicates the Central Africans expelled two Libyan
diplomats in early April for their alleged involvement
in the student strike
Nevertheless, we believe that Bangui's firm
response to Libyan subversion probably stems from
the sense of security provided by the presence of some
1,500 French troops, who are prepared to intervene in
Chad in the event of renewed hostilities. We expect
Libya to continue efforts, however, to weaken the
Kolingba regime and embarrass the French in the
eyes of Central Africans.)
Outlook
Niger, Nigeria, Cameroon, and the Central African
Republic remain vulnerable to Libyan meddling and
thus are likely to tread lightly where Qadhafi is
concerned. While taking strong private stands against
Libyan aspirations, they probably will publicly project
an image of openness to Qadhafi and at least give the
appearance that they are willing to accommodate
him:
? In our view, Niger remains easeasily accessible to
Libyan encroachment, although the Libyan
sightings in northeastern Niger are probably related
to operations in Chad or to Libyan interest in what
Tripoli believes may be a mineral-rich region.
? Nigeria's serious economic and political problems
make it an attractive target for Libyan inroads, in
our view. Since President Babangida came to power
last January, Nigeria has not defined its policy
toward Libya or Chad. The northern cities of Kano
and Maiduguri provide fertile ground for Libyan
influence peddling among Chadian exiles and
Nigerian Muslims.
? Although Cameroon remains one of Chad's most
stable West African neighbors, Chadian refugees
are attractive to Libya as potential recruits for
Libyan-backed aggression in Chad. Qadhafi may
hope to exploit the budding of Islamic
fundamentalism to gain access in an effort to
undermine the pro-Western Biya regime.
? Although the Central African Republic has been
the target of recent Libyan subversion, we believe
that it will continue to take a strong stand against
Qadhafi so long as French troops remain to protect
the regime. Nevertheless, Tripoli almost certainly
will continue to try to exploit latent anti-French
sentiment among Central Africans and attempt to
raise the cost to Paris of its backing for the Habre
government by opportunistically striking out at
French installations.
Until a durable solution is found to the Chad conflict,
these moderate West African states will continue to
provide attractive targets for Libyan subversion aimed
at undermining pro-Western states and French and
US interests in the region. F__1
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Africa
Brief
Mozambique Bank Scandal Jeopardizes IMF Agreement ^
Revelations of high-ranking, large-scale corruption in the foreign exchange
department of the Bank of Mozambique may jeopardize a much-needed new IMF
agreement for Mozambique, according to US Embassy reporting. Several bank
employees have been detained, and there are unconfirmed reports that a former
director and the current governor of the bank are implicated in the embezzlement
scheme, which is said to involve the diversion of $10 million to foreign personal
accounts. The arrests coincide with final government deliberation over adopting an
IMF-World Bank reform strategy advocated by the accused bank governor. The
scandal is likely to delay announcement of new reforms, previously anticipated at
the end of this month, and international donors may be less forthcoming in
responding to Mozambique's desperate need for capital inflows. F__1
Secret
ALA AR 86-009
2 May 1986
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