SUB-SAHARAN AFRICA: GROWING DEBT AND FADING MARKETS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T00768R000400420001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 51
• Document Creation Date: December 27, 2016
• Document Release Date: March 25, 2011
• Sequence Number: 1
• Publication Date: October 1, 1986
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Iq
Next 1 Page(s) In Document Denied
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part -Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Directorate of
Intelligence
Fading Markets
Sub-Saharan Africa:
Growing Debt and
Secret
ALA 86-10043
October 1986
Copy 324
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Directorate of Secret
Intelligence
Fading Markets
Sub-Saharan Africa:
Growing Debt and
a contribution from the Office of Global Issues.
This paper was prepared byl Ithe
Office of African and Latin American Analysis, with
Comments and queries are welcome and may be
directed to the Chief, East Africa Branch, Office of
African and Latin American Analysi
Secret
ALA 86-10043
October 1986
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Sub-Saharan Africa:
Growing Debt and
Fading Markets
Key Judgments The external debt of Sub-Saharan African countries, totaling some $82
/reformation available billion in 1985, has grown rapidly over the past 15 years to become a key
as of 1 October 1986 issue in the region's serious economic problems and in its relationship with
was used in this report.
official and private creditors. As a result, African debt has received
increased attention in international forums recently, largely on the initia-
tive of the African states themselves. We expect the issue of Africa's
economic crisis will be raised with greater frequency over the coming
months as the region's debt dilemma continues.
Africa's escalating external debt was triggered by the initial leap in oil
prices in 1973-74. Since then, the region's debt problems have worsened
with chronic current account deficits attributable both to high oil prices
through 1985 and to stagnant export earnings since 1980. Most Western
observers agree that, in addition to adverse external circumstances,
inappropriate domestic economic policies by African governments have
helped to restrain economic growth. Consequently, Africa's debt burden
has grown and, in our view, has outpaced the continent's capacity to service
the debt.
Although Sub-Saharan Africa's debt is not large by global standards, it is
spread over 45 countries, and poses serious economic, financial, and
political implications for each. The individual countries are subjected to the
economic pressures of meeting burdensome debt service obligations from
meager resources and to the adverse political fallout of the domestic belt-
tightening that this debt servicing can impose.
We believe Africa's debt situation will remain serious for the foreseeable
future. Most states are caught in a dilemma: they cannot meet their debt
service requirements on existing terms; yet, failure to meet these obliga-
tions may jeopardize the inflow of new funds from abroad necessary to
maintain or improve the region's capacity to repay.
We judge Africa's ability to service its debts will continue to be hampered
by weak export markets over the longer term, despite market gains for
some products. In any given year, the debt service burden will depend not
only on the level of hard currency earnings but also on Africa's success in
rescheduling debt service payments that fall due. Prospects for private
capital inflows are not bright, and these inflows could become negative
before the end of the decade. In these circumstances, official bilateral and
Secret
ALA 86-10043
October 1986
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
multilateral sources will continue to bear the brunt of supplying foreign
loans and other capital to Africa. Accordingly, Africa's economic fortunes
will depend greatly on the support mechanisms that these sources can
develop as the debt situation remains critical.
We anticipate that African countries will make increased representations
to the United States-given the US leading role in endorsing economic
recovery programs that emphasize freer market systems and a reduced role
for government-for economic assistance over the next several years as
these states try to solve their debt and other economic problems. We
believe many African states view Washington's endorsement as an implicit
promise of increased support for their economic adjustment efforts.
Increased African requests for help, however, would provide continuing
opportunities for the United States to expand its political and economic
influence on the continent through the use of bilateral aid programs and
other forms of economic support. On the downside, however, is the risk that
many African states are likely to be acutely disappointed should US and
other Western aid fall significantly short of their expectations.
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Key Judgments
iii
The Magnitude of the Crisis
The Other Side of the Equation
10
The Longer Term
11
Implications for the United States
11
Ivory Coast
13
Nigeria
14
C. Sub-Saharan Africa: External Debt and Debt Service
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Scope Note This is one of several papers published or under way in the Directorate of
Intelligence that examine the debt problems of less developed countries
(LDCs). The paper analyzes the debt problems and prospects of 45 Sub-
Saharan African countries since 1978; an appendix examines the varied
experiences of six major borrowers-Ivory Coast, Nigeria, Sudan,
Tanzania, Zaire, and Zambia-with serious but varied debt experiences.
vii Secret
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Figure 1
Total External Debt in Sub-Saharan Africa, 19858
Algeria
Niam
u*kina~(
Ouagadougou
Niger
t Libreville
Gabon
isia Mediterranean Sea
Khartoum
Sudan
Addis
Ababa* \_1
Ethiopia
South
Atlantic
Ocean
Debt in US Dollars
] 2 billion and over
1-2 billion
500 million-1 billion
] 250-500 million
1 Under 250 million
a Study excludes Namibia and South Africa.
b Data not available.
1000 Kilometers
1000 Miles
Boundary representation is
not necessarily authoritative.
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Sub-Saharan Africa:
Growing Debt and
Fading Markets
Introduction
The external debt of Sub-Saharan African countries
has continued to move upward since 1973.' Export
earnings, the region's principal means of servicing this
debt, have failed to keep pace with rising debt service
requirements. Africa's growing inability to meet its
external debt repayments is receiving increasing inter-
national attention as African leaders press for relief
from their economic plight. The Organization for
African Unity (OAU) was instrumental in bringing
about the May 1986 United Nations Special Session
on Africa's economic problems, and the organization
now is calling for a special international conference on
Africa's debt problems next year. From an African
perspective, most countries see the need for both debt
rescheduling and new funds to assist in an economic
turnaround, and international financial institutions
and OECD countries-the principal creditors of the
region-will most likely be called upon to assume a
larger role in helping Africa to cope with the debt
crisis.
This paper analyzes Sub-Saharan Africa's external
debt problem and assesses its impact on the region.
The paper also evaluates African export production,
market performance, and probable medium-term
trends, with a view to determining their impact on the
ability of the states in the region to meet debt service
obligations.
The Magnitude of the Crisis
Sub-Saharan Africa's external debt has soared since
the initial oil price hike of 1973-74. In 1974, medium-
and long-term public and publicly guaranteed debt
totaled $12 billion. By 1985, this debt had grown to
$69 billion. Firm data on total debt are not available.
On the basis of a review of international financial
statistics, we estimate that aggregate debt reached
$82 billion by the end of 1985.
Key Debtors. A few large borrowers are responsible
for the bulk of Sub-Saharan Africa's external debt.
At yearend 1985, the seven largest debtors in de-
scending order-Nigeria, Ivory Coast, Sudan, Zaire,
Kenya, Zambia, and Cameroon-together owed 60
percent of the total debt for the region. Nigeria
accounted for 47 percent of the region's increase in
total debt since 1980 as its debt more than tripled to
$20 billion, 25 percent of the Sub-Saharan total.
Ivory Coast's debt was $7 billion; Sudan's, $6 billion;
and Zaire's, $5 billion. In contrast, the seven smallest
borrowers of the 45 countries in the region together
owed $800 million, or 1 percent of the total.
Varying Ability To Pay. The degree of the debt crisis
varies among countries. At one extreme, countries like
Liberia, Sudan, and Zaire will be unable to repay
fully their outstanding obligations, according to vari-
ous country assessments. These states are perennially
in arrears with their payments and have had to be
assisted by several debt reschedulings in order to stay
afloat. At the other extreme, countries like Burkina
and the Central African Republic do not have any
serious debt problems. These countries, among the
poorest in Africa, have never been able to borrow
heavily abroad. Also, because of these countries'
poverty, foreign grants have substantially exceeded
loans over the years as their major external source of
capital. Most African countries fall between these
extremes, with the increasing demands of debt service
payments preempting resources that could help pro-
mote economic recovery.
' We define Sub-Saharan Africa to include all countries on the
continent (except Algeria, Egypt, Libya, Morocco, South Africa,
and Tunisia) plus Cape Verde, Comoros, Madagascar, Mauritius,
Sao Tome and Principe, and Seychelles.
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Figure 2
Sub-Saharan Africa: Selected
Economic Data, 1978-85
tim
30
20 1978 79 80 81 82 83 84 85
10
0
- Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Figure 3
Sub-Saharan Africa: Selected
Economic Data, 1978-85
30
20
10
0
3 Secret
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Figure 4
Sub-Saharan Africa:
Price Indexes of Major Export
Commodities, 1978-85
Because of their generally poor credit ratings, most
Sub-Saharan countries have to rely on official
sources for foreign loans. We estimate that these
sources accounted for 60 percent of all medium- and
long-term loans outstanding at yearend 1985. Private
creditors are important loan sources for only a small
number of countries including Congo, Gabon, Ivory
Coast, and Nigeria.
Most of the official loans to Sub-Saharan Africa are
bilateral-61 percent of medium- and long-term debt
at yearend 1984, according to World Bank data, for
example. For most countries, the principal bilateral
creditors are OECD countries. In a few cases (Guinea,
Guinea-Bissau, Mali, Mauritania, Somalia, and
Sudan) the main bilateral lenders are Arab OPEC
and Communist countries.
rll~li~e
50 1978
The World Bank and the International Development
Association (IDA), the Bank's concessional loan arm,
provided 64 percent of multilateral lending to Sub-
Saharan Africa at yearend 1984, with the balance
coming from organizations like the African Develop-
ment Bank, the African Development Fund, the Euro-
pean Community, and Arab OPEC agencies. The
IMF's lending role is substantial, but less than that
of the World Bank/IDA. IMF lending was $6 billion
at yearend 1985, compared with $10 billion by the
World Bank/IDA at midyear 1985.
The Debt Service Burden. Most experts on Africa
agree that the region's debt servicing requirements
have outstripped its capabilities. According to IMF
data, all major indicators of Sub-Saharan Africa's
debt and its ability to repay have worsened dramati-
cally since 1978 and now compare unfavorably with
similar data for other less developed areas.
Africa's debt crisis is seen most vividly in the bur-
geoning size of the debt, in weak export-import values
and prices, and in a faltering overall economic perfor-
mance. Linked to these factors have been chronic
current account deficits, a compression of imports
80 85
because of foreign exchange shortages, and a general-
ly poor performance in all elements of the region's
external accounts (see table 1). According t6-interna-
tional statistics, total debt nearly doubled between
1978 and 1985. Over the same period, exports of
goods and services grew by only 16 percent. Excluding
oil-exporting Nigeria, the region's terms of trade-the
ratio of export prices to import prices-fell by a total
16 percent, adversely affecting export earnings and
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Table 1
Sub-Saharan Africa: Current Account Balances a
Exports (f.o.b.)
27.3
37.3
49.8
39.1
32.1
29.7
32.5
32.1
Imports (f.o.b.)
30.5
33.3
41.9
44.5
38.2
32.0
29.4
27.8
Trade balance
-3.2
4.0
7.9
-5.4
-6.1
-2.3
3.1
4.3
Net services and private transfers
-8.3
-10.3
-14.0
-12.7
-12.4
-10.2
-10.1
-10.4
Exports of goods and services
(32.5)
(43.3)
(57.6)
(46.4)
(38.0)
(35.3)
(37.9)
(37.6)
a Excludes Angola, due to unavailability of data.
b Estimated.
the capacity to import. Imports fell by 9 percent, and
real GDP growth declined from 4 to less than 3
percent.
Although there are differences between countries,
debt servicing requirements for the region have con-
tinued to push upward. According to IMF statistics,
interest and amortization payments in 1985 were $12
billion or 32 percent of exports of goods and services,
compared with $3 billion and 10 percent in 1978. The
total debt outstanding last year was more than twice
the region's annual exports of goods and services;
exports equaled outstanding debt in 1978, according
to the IMF. With the rise in debt servicing obligations
relative to the capacity for payment, two-thirds of the
Sub-Saharan countries have had debt servicing diffi-
culty in the period 1980-85, including the four largest
borrowers-Ivory Coast, Nigeria, Sudan, and Zaire.
In order to obtain relief from the debt service burden
in 1980-85, 18 Sub-Saharan countries were forced to
reschedule $13 billion of debt owed to commercial
banks and official bilateral and multilateral creditors,
according to IMF data (see table 2).
Roots of the Problem
Sub-Saharan Africa's debt problems result mainly
from its poor economic performance. Economic data
show that the region's productive capacity has fallen
relative to the resources required to service the debt.
We believe the lagging economic performance can be
attributed to several internal and external factors.
Inappropriate Policies. A review of country perfor-
mance suggests that African economic conditions
have been undermined in part by policies that pro-
mote inefficiency in production. According to Embas-
sy and press reporting, as well as financial studies,
these policies include:
? Overvalued exchange rates that keep import prices
artifically low (Liberia, Nigeria, and Tanzania).
? Low producer prices for agricultural output and a
general neglect of rural development (Guinea, Nige-
ria, Zaire).
? Large-scale capital projects of little productivity,
largely financed by external borrowing (Ivory Coast,
Tanzania).
? The pervasive presence of money-losing government
corporations in economic life (Guinea, Ivory Coast,
Kenya, Zambia).
? Government bureaucracies with excessive employ-
ment rolls (Central African Republic, Congo,
Ghana).
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Table 2
Sub-Saharan Africa: Official Multilateral and Commercial
Bank Debt Restructuring
Total
543
1,724
390
5,796
3,026
2,014
13,493
Paris Club
72
1,079
305
2,872
1,514
1,205
7,047
Commercial banks
471
645
85
2,924
1,512
809
6,446
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Table 2 (continued)
Paris Club
Commercial banks
Togo
536 269 885
Structural Factors. Sub-Saharan Africa's productive
capacity also has been hampered by serious structural
problems, in our judgment. The region remains short
of technically trained personnel, managerial expertise,
and skilled labor. World Bank data, for example,
show that only 15 percent of the secondary-school-age
group for the region was enrolled in 1982; only 2
percent of the 20- to 24-age group was enrolled in
higher education. Africa's physical facilities have
suffered from years of neglect and inadequate mainte-
nance, due, in our view, to a lack of funds and
foresight. Open sources indicate this decay has affect-
ed factories, public utilities, roads, railroads, and
transportation equipment. The situation in Ghana and
Tanzania is illustrative of this point.
Unfavorable Export Patterns. Africa's economic per-
formance and its ability to service its external debt are
highly dependent on its exports of goods and services,
which provide its principal source of foreign exchange.
Exports also provide the means of paying for the
imports of capital goods and other inputs needed to
promote economic growth. Africa's export perfor-
mance has been generally poor since 1978, and,
according to IMF data, prices of key export products
like cocoa, copper, cotton, peanuts, and tea remain
well below 1978 levels. International trade statistics
show that export volume is also down, with the 1985
level 5 percent lower than in 1978.
We believe Sub-Saharan Africa's export performance
since the 1970s has been mixed because of the
combined effects of external forces and domestic
factors relating to production. Production has been
hampered by official agricultural policies with insuffi-
cient incentives to producers, a three-year drought
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Differences Between African and
Latin American Debt
The magnitude and nature of the debt crisis in Sub-
Saharan Africa are markedly different from those in
Latin America. Africa's total external debt in 1985
was $82 billion; Latin America's was $394 billion-
of which Brazil's totaled $109 billion and Mexico's,
$104 billion. Eighty-one percent of Latin American
medium- and long-term debt was owed to private
creditors, mainly international banks, compared with
40 percent for African countries. With Ivory Coast
and Nigeria excluded, only 28 percent of Africa's
medium- and long-term debt was owed to private
creditors.
The predominance of official lending in Africa's debt
has led to lower interest rates and interest payments
than the LDC average. For example, we estimate the
implicit average interest rate-interest payments rel-
ative to total debt-for Sub-Saharan Africa at 6
percent for 1985. For Brazil and Mexico, where loans
from banks carry an interest rate premium over the
benchmark US Prime Rate or the London Interbank
Offer Rate, the implicit interest rates were 9 and 10
percent, respectively.
that ended for the most part last year, and, in the
Sahel region, the more serious impact of a longer
drought and continuing desertification. The impact of
the problem can most clearly be seen from a country
perspective where, for example, Ghana and Nigeria
have experienced major declines in cocoa output and
Tanzania's sisal production has fallen markedly. At
an aggregate level, FAO data for 1978-84 show no
positive shift during that period in Africa's trade
shares in industrial country imports of the major
exports of cocoa, coffee, sisal, or tea. A trade share
gain in peanut oil was counterbalanced by a fall in the
trade share of peanuts.
On the demand side, Sub-Saharan Africa's exports
have been curtailed by slow economic growth in
industrial countries, where an average annual growth
of 4 percent in the late 1970s has been followed by an
average annual rate of 2 percent from 1980, according
to IMF data (see table 3). We believe the sluggish
response of African exports to industrial country
economic recovery reflects both the traditional weak
impact of higher industrial country GNP on African
food exports like cocoa, coffee, and tea and a probable
gradual erosion of the link between industrial country
growth and the demand for African raw materials like
copper and bauxite.
technological changes in industrial countries are
increasingly allowing the use of synthetic materials
and other substitutes for metals like copper and
aluminum.' In our view, this development aggravates
already faltering prospects for African exports and
increases in export earnings.
Resistance to Economic Adjustment. In our judg-
ment, the African states have given a mixed accep-
tance to the economic adjustment programs needed to
help stem economic decline and ease their debt prob-
lems. The economic adjustment programs are increas-
ingly required by multilateral organizations spear-
headed by the IMF and by bilateral donors, as a
condition for continued economic support.' Because
the programs usually include unpalatable measures
like currency devaluations, tight government budgets,
and reduced consumer subsidies, African leaders run
the risk of sparking domestic protests or playing into
the hands of their political opponents:
? In the Ivory Coast, teachers organized a strike
against reduced housing subsidies in 1984, and
elements of the General Union of Workers attempt-
ed to block certain price increases in 1984. The
government has continued to implement reform,
however, and some trade unions have now endorsed
the government's policies, according to US Embassy
reporting.
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Table 3
Industrial Countries: Estimates of Economic Growth Rates
? According to US Embassy reporting, Zambia's
reform efforts have run into opposition from the
labor movement. In July 1984 the Congress of
Trade Unions threatened to boycott a national
conference on the economy unless an announced 20
percent price increase for maize (corn) was canceled.
According to press reporting, key critics of the
government remain bitterly opposed to reductions in
central planning and subsidies.
In our view, countries that have more aggressively
tackled economic reform include Cameroon, Ivory
Coast, Kenya, Senegal, and Zaire. Liberia, Nigeria,
and Sudan have been among the less aggressive
countries.
Gloomy Prospects
Medium-Term Trends in Debt. Africa's debt crisis
probably will remain serious over the next few years,
despite periodic signs of improvement or stabilization.
On the positive side, lower oil prices should provide
additional relief to hard currency outlays including
debt service. Also, the weaker US dollar should help
dollar-denominated foreign sales. On the other hand,
most experts predict continued slow economic growth
for industrial countries that implies little upsurge in
foreign demand for Africa's primary products. On the
basis of foregoing developments, we believe that debt
service pressures will intensify. This bleak debt servic-
ing outlook will particularly apply to the many low-
income countries that depend on loans from official
sources. The grace periods on the heavy borrowings of
the 1970s will be expiring, according to the IMF.
These countries will, therefore, face substantially
higher amortization payments. Because of the higher
debt levels, total scheduled interest payments will
grow, despite the concessional terms of official loans
to low-income African countries. In our view, coun-
tries that will particularly find themselves in these
adverse circumstances include Burundi, Cape Verde,
The Gambia, Mali, and Sierra Leone. We believe that
the expected debt service pressures will bring addi-
tional requests for debt rescheduling by Organization
for Economic Cooperation and Development (OECD)
official creditors, the main source of funding.
Although many African countries have been making
efforts to restructure their economies and to assign a
larger role to private-sector economic activity, we do
not believe these policy changes will be sufficient to
reverse the recent trend of a diminishing net flow of
private capital to Sub-Saharan Africa. Bilateral
sources and multilateral institutions like the World
Bank and the European Community will continue to
be pivotal in the supply of new lending to the region.
Export Prospects. In our judgment, export prospects
for the region are mixed, but several factors will work
against a strong recovery over the medium term.
According to empirical studies, economic growth in
industrial countries is an important determinant of
the demand for LDC exports. This impact is greater,
however, for Asian and Latin American countries
than for African states, in our view. According to
trade statistics, Asian and Latin American exports to
industrial countries have higher proportions of manu-
factured goods while African exports are principally
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
primary products. According to academic studies,
manufactured goods are more responsive to income
changes in industrial countries. Various economic
forecasts from official and commercial sources sug-
gest industrial country economic growth rates of 3
percent or less annually for the next few years, despite
lower oil prices. For example, Chase Econometrics
forecasts of annual economic growth rates for OECD
countries average 2.6 percent for 1987-90; Wharton
Econometric Forecasting Associates forecast an aver-
age 2.8 percent for the same countries for 1987-91. In
our judgment, growth rates of this magnitude are not
strong enough to generate a resurgence in world
demand for Africa's exports.
We expect the export earnings of a few African
countries, including Ethiopia, Ivory Coast, Uganda,
and Tanzania, to benefit substantially this year from
the high coffee prices of the first half of this year that
resulted from the impact of drought on Brazilian
coffee production. Ethiopia, for example, will be likely
to earn $500 million from coffee exports, according to
press reporting. However, this windfall is temporary,
in our view, and masks the overall gloomy commodity
price picture for Sub-Saharan Africa over the medi-
um term. Coffee prices are presently declining. Prices
of at least nine commodities of major export interest
to the region have been depressed since 1980 with no
major turnaround in sight, according to available
forecasts. These commodities include cocoa (Ghana,
Nigeria), with a market price currently 22 percent
below 1980 levels; copper (Zaire, Zambia), 38 percent;
palm oil (Benin, Ivory Coast), 62 percent; sisal
(Kenya, Tanzania), 33 percent, and sugar (Mauritius,
Sudan), 23 percent.
In our judgment, Sub-Saharan Africa's exports will
become increasingly vulnerable over the medium term
to competition from non-African LDCs, as these
countries expand or diversify their exports. For exam-
ple, we believe that Zambia's and Zaire's copper
exports will become less competitive with those of
Chile, the lowest cost producer, since the African
countries cannot expand production to compensate for
continued low prices to the extent that Chile can.
Liberia's rubber market share probably will be ad-
versely affected by the expansion plans of large
producers like Indonesia, Malaysia, and Thailand. In
cocoa exports, Benin, Cameroon, Ghana, and Togo
probably will continue to lose market share to Brazil,
which is aggressively increasing its cocoa production.
Tanzania's sisal exports already have been hit hard by
expanded production of sisal by Brazil.
The Other Side of the Equation
We believe Sub-Saharan Africa's current debt trends
will be influenced by shifts in the economic aid
policies of bilateral donors and multilateral organiza-
tions. Accompanying rising debt, Sub-Saharan Afri-
ca's living standards continue to fall, despite net
official development assistance of $7 billion a year.
Several recent academic and international forums on
Africa's economic problems agree that more economic
assistance will be necessary to arrest the region's
economic decline. The World Bank estimates that at
least an additional $2.5 billion in annual financial
flows will be needed over the next five years to
rehabilitate the stricken Sub-Saharan economies.
We have seen no sign that OECD donors are willing
to increase bilateral aid to Africa much beyond the
present substantial support of about $5 billion net
annually. The OECD has forecast a modest increase
in worldwide concessional aid from its member coun-
tries of, at most, 2 percent a year in real terms for the
foreseeable future. This growth translates into an
annual increase of a mere $160-200 million a year for
Africa. We do not expect any policy changes on
economic assistance for Africa from Communist
countries or the financially beleaguered OPEC coun-
tries that would lead to significant increases in bilat-
eral economic assistance.
In our judgment, however, recent policy moves by the
IMF and World Bank should have a favorable impact
on the present debt trends in Africa. The IMF's $3
billion Structural Adjustment Facility announced in
March 1986 will provide concessional loans over the
next six years to support growth-oriented economic
reform in sharply depressed economies, mainly in
Africa. This facility will, in effect, substantially roll
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 - Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Factors Affecting Debt Trends
Sub-Saharan Africa's current debt trends will also be
affected by the recent sharp decline in oil prices.
Much will depend on the level at which these prices
stabilize. Oil exporters will be hurt, with Nigeria
being the most seriously affected. With the recent
decline in oil prices, Lagos cannot afford to service its
external debt on existing terms and will need major
rescheduling. Angola, Congo, and Gabon face serious
losses of oil export revenues, but their debt problems
were less severe than Nigeria's before the oil price
in export values or the prospect of extensive relief
from debt service obligations from major creditor
countries in the coming years.
The long-term picture is one of growing external
indebtedness as current account deficits continue and
as external financing remains necessary to promote
economic recovery, in our view. While we expect the
economic growth record to improve with extensive
economic adjustment programs, we do not see African
growth rates, on average, approaching those of the
Latin American or Asian regions where countries
have the advantage of larger internal markets (Argen-
tina, Brazil) or broader export bases (Brazil, India,
decline.
The fall in oil prices should favorably affect current
debt trends for oil importing countries. The region's
oil import bill was at least $7 billion in 1984 before
the price drop, according to our calculations. The
price decline should reduce payments for oil imports
and effect savings of scarce foreign exchange. We do
not believe, however, that the import bill will fall by
the same degree as the price decline.
over debt repayments of $3 billion due from poor
countries to the IMF-administered Trust Fund
through 1991 and, thus, will cushion the debt service
obligations of Sub-Saharan countries. Increased lend-
ing to Africa by the World Bank will also continue
from the Bank's second 3-year $1.5 billion Special
Facility for Africa and from a $12 billion replenish-
ment of the International Development Association
(IDA), the Bank's soft loan arm, effective in 1987.
Because we see no substantial increase in bilateral
economic assistance to Africa, we believe that multi-
lateral financial institutions like the IMF and the
World Bank will be required to play an increasing role
in providing economic support for the region.
The Longer Term
In our judgment, Africa's debt problems are likely to
continue over the longer term, despite major efforts to
cope with them. We foresee no substantial increases
South Korea)
years to come.
Over the longer term, we do not see a bright outlook
of high and stable export receipts for African coun-
tries in world markets until they can substantially
broaden their export base by shifting to more manu-
facturing or technologically oriented production. Sub-
Saharan Africa's shortage of technically trained per-
sonnel, managerial expertise, and skilled labor will
remain serious obstacles to this shift. Structural short-
comings such as inadequate transportation, lack of
cheap power supplies, and cumbersome administrative
systems are likely to remain major roadblocks in the
Implications for the United States
Most financial experts agree that Sub-Saharan Afri-
ca's external debt does not pose a serious threat to the
stability of the international financial system. Despite
its lesser financial importance in a global context,
Africa's debt burden has serious economic implica-
tions for individual countries and the continent itself,
and for the relationship of the region with creditor
countries.
As Africa's debt crisis continues, we expect increasing
joint representations in international forums by Afri-
can states for reductions in their debt service burden
and for increased economic assistance on concessional
terms to promote economic recovery with minimal
future debt service obligations. With the United
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
States playing a leading role in endorsing African
economic recovery programs that emphasize freer
market systems and a smaller role for government, we
believe that countries implementing these programs
will increasingly look to Washington for economic
assistance.
In our judgment, a greater economic support role for
the United States could provide opportunities to ex-
pand US influence on the continent through enhanced
bilateral economic aid programs. Such programs
could not only cement more firmly relationships with
countries like Kenya and Somalia that allow US
forces to use local military facilities, but could provide
some inducement to socialist-oriented countries like
Mozambique and Tanzania to be more receptive to
US political approaches. Conversely, any major US
foreign aid reductions over the medium term could
complicate US efforts to assist Africa and to gain
leverage in the region. Further, the international
political importance of economic support for Africa
will grow if, in the years ahead, the hopes of some
African countries for expanded exports under eco-
nomic recovery programs are frustrated by trade
restrictions in the US and other industrial country
markets.
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Appendix A
Sub-Saharan African
External Debt:
Country Examples
This appendix illustrates the varying debt problems
for six of Africa's major borrowers who together
account for 55 percent of the region's total external
debt. The countries covered range from Nigeria, the
region's largest debtor-$20 billion-with unusually
tangled finances, to Tanzania, whose failed economic
policies have rendered it incapable of repaying some
$3 billion received mainly from bilateral official
creditors.
in 1979. The debt climbed further to $7 billion in
1982, according to our estimates, and has since
stabilized at that level.
Ivory Coast has had debt service problems since 1982.
Debt service payments escalated between 1980 and
1984 because of:
? Depreciation of the CFA franc against the US
dollar that increased the franc burden of US-dollar-
denominated debt.
? High levels of floating interest rates.
? An increasingly high amortization burden, as repay-
Background
Ivory Coast is Sub-Saharan Africa's second-largest
debtor, after Nigeria. Dispite efforts at diversifica-
tion, the Ivorian economy remains based on agricul-
ture, with exports dominated by coffee, cocoa, and
timber. When commodity prices were booming in
1976, Ivory Coast embarked on a heavy borrowing
program to promote economic development. With a
weaker commodity market performance since then,
the government has found it increasingly difficult to
service its external debt and has only managed to do
so with substantial debt rescheduling since 1984.
Some 65 percent of Ivory Coast's medium- and long-
term external debt is owed to private creditors. The
country is, therefore, greatly exposed to high and
floating interest rates associated with commercial
credit.
Elements of the Debt Problem
Ivory Coast's external debt has grown sharply since
1976, mainly because of large investment programs
undertaken by the government to upgrade infrastruc-
ture and diversify the economy. In addition, the
Ivorian authorities guaranteed a large number of
foreign loans obtained by nonresident multinational
organizations and by official development banks, ac-
cording to the IMF. In the process, total external debt
obligations leaped from $1 billion in 1976 to $4 billion
ments of earlier borrowings fell due.
Ivory Coast's debt problems have triggered extensive
debt renegotiations, which have also been a part of a
continuing structural adjustment program being car-
ried out with financial support from the IMF and the
World Bank. Since 1984, Abidjan has refinanced
debts due to official creditors, commercial banks, and
trade suppliers. Through 1985, the rescheduled
amounts exceeded $1 billion. In May 1986, Ivory
Coast's commercial bank creditors agreed to resched-
ule an additional $1 billion of loan repayments falling
due in 1986 through 1989. We expect the regime of
rescheduled debt to continue for several more years
because scheduled debt service payments, despite
ongoing debt relief, would consume nearly 50 percent
of export earnings.
The Political Dimension
In our judgment, Ivory Coast faces no serious political
challenge as a result of the external debt burden.
Indeed, we believe that much of the Ivorian debt was
incurred to minimize domestic tension as the govern-
ment launched expensive public projects in the 1970s,
some without economic justification.
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Table 4
Ivory Coast: Selected Economic Data
Gross domestic
product (billion US $)
8
9
11
Real GDP growth
(percent)
11
2
5
Trade balance
(million US $)
573
490
399
Exports f.o.b.
(million US $)
2,616
2,723
3,013
Imports f.o.b.
(million US $)
2,043
2,233
2,614
Current account
balance a
(million US $)
-879
-1,388
-1,836
International reserves
(million US $)
449
149
22
a Goods, services, and private transfers.
b Consumer prices.
There have been isolated protests against economic
austerity measures as the Ivorian Government imple-
mented the general economic reform that would,
among other things, reduce the debt burden. For
example, teachers organized a strike against reduced
housing subsidies in 1983, and trade unionists at-
tempted to block some price increases in 1984. As the
government continued to implement reform, some
trade unions have come to endorse these new policies,
according to US Embassy reporting.
Background
Nigeria's external debt of $20 billion was run up
principally since 1978 under both favorable and unfa-
vorable economic conditions. During the oil market
boom of 1978-80, the country's external debt more
than doubled to nearly $7 billion as oil exports rose to
for 1986, according to one forecast.
$25 billion. In this period of relative prosperity,
Nigeria obtained extraordinarily large amounts of
trade credit for financing the imports that accompa-
nied the government's expansionary fiscal and mone-
tary policies. Nigeria's economic boom ended with the
price and volume downturn in the world oil market in
1981. Oil exports, which provide 95 percent of the
country's export earnings, plummeted to $10 billion in
1983. Because of a major collapse in oil prices this
year, oil exports will most likely be less than $8 billion
Elements of the Debt Problem
The size of Nigeria's external debt is not unduly large
by Third World standards when related to its GDP.
In 1984, for example, Nigeria's total external debt
was approximately one-third of GDP; for Mexico, the
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
same ratio was nearly two-thirds. The IMF has
termed the country's borrowing policies
"conservative."
Nigeria's debt problem has three major elements:
? The country's medium- and long-term debt has an
average maturity of only five years with an average
interest rate of 10 percent, according to the IMF.
Also, the debt is "front-loaded," with unusually
large repayments due in 1986-88.
? Several billion dollars of trade claims on Nigeria
remain unpaid because of chaotic conditions in their
documentation. In our judgment, the delays in
payment have impaired the country's standing with
its foreign creditors. According to an economic
publication, foreign exporters claimed about $10
billion as unpaid in 1984, with a sizable proportion
of the claims fraudulent or inadequately document-
ed. About $4 billion of the total is expected to be
declared genuine, according to the same source,
with some legitimate claims not expected to be
honored because of flawed paperwork.
? While weak oil markets have caused debt servicing
problems since 1981, the collapse of oil prices since
January of this year has created a major foreign
exchange crisis for Nigeria.
Lagos's inability to service its external debt under
existing terms appeared shortly after 1981, as the
decline in oil export earnings came simultaneously
with a period of high import growth and domestic
credit expansion. This combination of factors led to
severe foreign exchange losses. Although the import
bill was later reduced by restrictive official measures,
foreign exchange shortages led to rising arrears in
import payments by late 1982. By the next year,
Lagos was forced to conclude two separate agree-
ments with dozens of foreign commercial banks to
refinance nearly $2 billion owed for letter-of-credit
exposures.
Trade Arrears. Since 1983, Nigeria has been trying to
refinance its trade arrears, much of which was origi-
nally due in less than 12 months, by negotiating a
stretching out of repayments. During 1984, some of
Lagos's uninsured trade creditors agreed to refinance
their claims by accepting promissory notes that would
mature in six years inclusive of a two-and-a-half-year
grace period. According to one estimate, Nigeria
currently owes about $2.6 billion in uninsured trade
credits.
The bulk of Nigeria's trade arrears remains unresche-
duled. At yearend 1984, the unrescheduled arrears
totaled an estimated $7 billion, according to the IMF,
of which at least $1.7 billion was owed to export credit
agencies abroad. Other sources currently estimate the
exposure of foreign export credit agencies at $1.4
billion, of which Britain's Export Credits Guarantee
Department is owed about $700 million. Other export
credit agencies with important involvement in Nigeria
include those of France, the Netherlands, and West
Germany.
Medium- and Long-Term Debt. We estimate that
Nigeria's medium- and long-term debt totaled $13
billion at yearend 1985. According to the IMF, most
of the debt was incurred in relatively small amounts,
with the exception of two "jumbo" loans totaling $1.8
billion in 1978 for balance-of-payments support, plus
$2.3 billion borrowed to establish a now-faltering steel
industry. However, because of front-loading, debt
service is expected to rise to $5 billion in 1986 and
1987 before falling again to $4 billion in 1988 with
subsequent declines, according to one financial report.
Recent Developments. After introducing an austerity
budget in December 1985, Lagos announced that it
would spend only 30 percent of its foreign exchange
earnings on debt service and would seek debt resched-
uling. The subsequent collapse of oil prices rendered
Nigeria incapable of meeting its debt service pay-
ments. Since April the country obtained from com-
mercial bank creditors three consecutive 90-day mor-
atoriums on the repayment of some $7 billion in
medium- and long-term loans. Nigeria hopes to nego-
tiate a new repayment plan during the moratorium
period. The country also is seeking to reschedule its
official (Paris Club) debt.
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Table 5
Nigeria: Selected Economic Data
Gross domestic product 52
(billion US $)
66
86
Real GDP growth
(percent)
7
6
6
Trade balance
(million US $)
-1,177
4,912
11,105
Exports f.o.b.
(million US $)
10,508
16,774
25,741
Imports f.o.b.
(million US $)
11,685
11,862
14,636
Current account
balance b
(million US $)
-3,766
1,703
5,270
International reserves
(million US $)
1,886
5,547
10,235
Inflation c
(percent)
a Estimated.
b Goods, services, and private transfers.
Consumer prices.
The Political Dimension
We believe the political impact of Nigeria's debt
problems to be serious. According to press accounts,
Nigeria's creditors require an economic reform pro-
gram as a condition for rescheduling the country's
external debt and providing badly needed new financ-
ing. In such situations foreign creditors normally
expect an IMF-sponsored program, but the military
government rejected the IMF linkage for some time in
the face of opposition by the public and certain
elements in the military itself, according to US
Embassy reporting.
In an effort to come to grips with the economic crisis,
President Babangida announced a two-year structural
adjustment program last June. In September Nigeria
signed a Letter of Intent for the IMF standby ar-
rangement that its creditors were insisting on. The
political problems of debt and economic adjustment
remain. According to US Embassy reporting, the
structural adjustment program faces opposition from
government bureaucrats and elements of the military
who stand to lose privileges. According to an open
source, Nigeria does not intend to draw IMF funds
under the standby agreement, because that would be
politically dangerous. However, the IMF agreement
gives needed credibility to Nigeria's debt negotiation
and economic adjustment efforts, in our view.
Background
Sudan has been experiencing external debt problems
since the mid-1970s as the country's external pay-
ments position worsened from stagnation of output
and exports, deteriorating terms of trade, and distor-
tions in costs and prices. The country's economic
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
problems have been compounded by a decade of
drought, a massive refugee problem mainly from
unrest and drought in neighboring Ethiopia, a strong
insurgency movement in the south, and considerable
mismanagement by Sudan's leaders.
By mid-1978, Sudan had severe foreign exchange
shortages that led to a buildup of external payments
arrears. The external payments crisis has continued
since that time.
Elements of the Debt Problem
Sudan's external debt tripled to $6 billion between
1978 and 1981 and has since stabilized at that level,
as external financing has become more difficult to
obtain. Some 90 percent of Sudan's external debt is in
medium- and long-term loans. This unusually high
percentage reflects not only a drying up of new trade
and bank credit, but also the rescheduling of old,
similar obligations to longer periods.
Because Sudan has been unable to fully meet its debt
service obligations for several years, the country has
sought debt relief from Paris Club and other bilateral
creditors, as well as from the commercial banks.
Between 1980 and 1985, rescheduled Paris Club and
commercial bank debt totaled $3 billion.
Since 1978, Sudan has launched a series of economic
recovery programs with financial support from multi-
lateral institutions, including the IMF and the World
Bank, and from bilateral creditors. Much of the
country's debt relief has been linked to these pro-
grams.
Sudan was formally excluded in February this year
from access to the IMF's resources because of over
$200 million in unpaid arrears to the Fund. Actually,
Sudan had been excluded de facto since mid-1984,
when the IMF arrears started to accumulate. Al-
though the ban was partly lifted in September after a
token payment to the Fund, we believe Sudan's
problems with the IMF probably have convinced
many foreign donors of the hopelessness of any mean-
ingful resolution of Sudan's debt problems. Because of
this, the country's ability to obtain continued foreign
assistance has been sharply curtailed. Sudan's debt
service prospects remain highly unfavorable over the
medium term, according to the IMF. Khartoum's
debt servicing ability continues to decline, with the
country being openly described as the "world's most
bankrupt."
The Political Dimension
In our judgment, Sudan's massive debt and economic
problems will not ease any time soon, because of a
lack of governmental resolve. According to US Em-
bassy reporting, no meaningful effort has been made
since 1983 to check the economic slide, and Prime
Minister Sadiq al-Mahdi's new administration may
lack the economic understanding or political will to
implement major reform. According to the Embassy,
such reform would probably be opposed by powerful
public-service unions and the public at large, because
they would be likely to involve reduced government
employment, restructured government corporations,
currency devaluations, and a general increase in
hardship.
Background
Tanzania's economic situation has deteriorated rapid-
ly since the late 1970s because of a long list of
internal and external factors. Prominent among them
have been the collapse of the East African Communi-
ty in 1977 with an adverse impact on Tanzania's
exports, the costly 1978-79 war with Uganda, recur-
rent droughts, the oil price shock of 1979-80, and
worsened terms of trade sparked by weak export
prices.
These adverse developments have been compounded
by a longstanding and ill-fated Tanzanian economic
development policy emphasizing rural development
and self-reliance and largely supported by expansion-
ary monetary policies. The net impact of these factors
has been unsustainable current account deficits,
mounting external debt, a sharply declining ability to
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Table 6
Sudan: Selected Economic Data
Gross domestic
product (billion US $)
7
7
7
Real GDP growth
(percent)
Trade balance
(million US $)
-61
-222
-438
Exports, f.o.b.
(million US $)
563
514
689
Imports, f.o.b.
(million US $)
624
736
1,127
Current account
balance b
(million US $)
-123
-248
-337
International
reserves
(million US $)
29
67
48
Inflation c
(percent)
a Goods, services, and private transfers.
b Consumer prices.
c Fiscal years ending June.
service the debt, a sizable accumulation of payments
arrears, and a near collapse of the Tanzanian econ-
omy.
Elements of the Debt Problem
Because of Tanzania's relative poverty, a large pro-
portion of its external debt was obtained on conces-
sionary terms from multilateral and bilateral official
sources. In 1980, for example, multilateral sources
accounted for 51 percent of external loan commit-
ments to Tanzania, according to IMF reporting. The
loan commitments had an average maturity of 31
years, an average seven-year grace period, and an
average interest rate of 1.5 percent. Bilateral loan
commitments, 43 percent of the total, were only
slightly less generous, with an average maturity of 29
years, an average seven-year grace period, and an
average interest rate of 2.4 percent.
Most of Tanzania's bilateral official creditors are
OECD countries, with Japan, the United Kingdom,
and the United States prominent among them. Tanza-
nia receives substantial economic support from Nor-
dic countries, but mainly as grants. China and the
Soviet Union are major creditors from non-OECD
countries.
Tanzania's external debt data are incomplete, despite
substantial effort by the government and consulting
financial institutions to determine more accurately
the details of the country's external obligations. We
estimate the total medium- and long-term external
debt at $2.8 billion at yearend 1985. The correspond-
ing estimate by the Tanzanian authorities, with the
assistance of a Swedish commercial bank, was $3.1
billion, according to IMF reporting.
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Table 7
Tanzania: Selected Economic Data
Gross domestic
product (billion US $)
4
4
6
Real GDP growth
(percent)
-4
3
4
Trade balance
(million US $)
-519
-415
-561
Exports, f.o.b.
(million US $)
477
546
508
Imports, f.o.b.
(million US $)
996
961
1,069
Current account
balance b
(million US $)
-618
-492
-679
International reserves
(million US $)
100
68
20
Inflation
(percent)
a Estimated.
b Goods, services, and private transfers.
Consumer prices.
Despite the highly concessionary nature of Tanzania's
external debt, the country has been in a serious
financial crisis since the early 1980s. Balance-of-
payments pressures have increased with declines in
export volume and a worsening in the terms of trade.
The government has responded with sharp import cuts
and an economic adjustment program that includes
increases in agricultural producer prices. In the IMF's
view, the program has been inadequate to turn the
economy around.
The Political Dimension
Tanzania is being forced to consider major economic
reform at the urging of foreign donors, in order to
avoid a drying up of economic aid. On the basis of US
Embassy reporting, the reform effort is supported by
President Mwinyi, but is being stymied by a firmly
entrenched bureaucracy committed to socialist ideolo-
gy and by the doctrinal influence of ex-President
Nyerere, who has long resisted an IMF-sponsored
Background
Zaire's external debt problems are among the oldest
in Sub-Saharan Africa. Crisis conditions that
emerged in 1975 have continued ever since, despite
considerable effort and foreign assistance to resolve
them.
The bulk of Zaire's external debt was contracted in
the early 1970s. By 1979, this debt totaled nearly
$5 billion. Prompted by a 1973-74 copper boom,
Kinshasa launched an overambitious investment pro-
gram with little or uncertain economic benefits, ac-
cording to the IMF. Prominent among these ventures
was a $2 billion project to construct the Inga Shaba
dam and an 1800-km powerline that, according to one
academic study, was primarily intended to increase
reform program.
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Table 8
Zaire: Selected Economic Data
Gross domestic
product (billion US $)
7
6
6
Real GDP growth
(percent)
-5
0
2
Trade balance
(million US $)
810
727
566
Exports, f.o.b.
(million US $)
1,834
1,834
2,038
Imports, f.o.b.
(million US $)
1,024
1,107
1,472
Current account
balance
(million US $)
311
158
-419
International reserves
(million US $)
126
207
204
Inflation b
(percent)
a Estimated.
b Goods, services, and private transfers.
Consumer prices.
the dependence of copper-rich Shaba Province on the
rest of the country and, thus, discourage secessionist
tendencies.
Zaire borrowed heavily on international financial
markets to fund its investment projects, often on
unfavorable terms involving floating interest rates.
Incipient debt service problems were aggravated by
expansionary economic policies by the Mobutu re-
gime, extensive "Zairianization" of economic activity
that, although substantially rescinded later, severely
hurt the prospects for foreign capital inflows and
sharply declining copper prices. By 1975, Zaire had
started to accumulate trade arrears due to balance-of-
payments pressures, and, by 1978, the country had
lost its creditworthiness in international financial
markets, with payments arrears of $1.3 billion exceed-
ing the year's exports.
Elements of the Debt Problem
Because Zaire traditionally depends on copper exports
for some 50 percent of its foreign exchange earnings,
its debt service capacity has been unstable because of
variations in copper prices. Debt service payments
have absorbed high proportions of the country's for-
eign exchange earnings, and have thus contributed to
low levels of the imports necessary for economic
adjustment.
Because of its inability to meet scheduled debt service
payments, Zaire has had to rely almost continuously
since 1979 on Paris Club debt reschedulings by
bilateral creditors and similar agreements with groups
of foreign commercial banks to stretch out debt
repayments as they fall due. Between 1980 and 1985,
these two groups of creditors rescheduled $2.9 billion
of Zaire's external debt.
According to a 1983 IMF report, Kinshasa will need
annual debt rescheduling and/or other exceptional
financing each year through 1988. We believe these
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
reschedulings will continue well beyond that time as
the country's debt service problems persist, because of
weak copper prices. Debt service payments in 1985
were a record at $465 million, as was the total debt of
$4.7 billion.
Zaire has been attempting to cope with its economic
problems since 1979, with IMF and World Bank
financial support. In our judgment, it is the presence
of these sponsored adjustment programs that has been
instrumental in Zaire's obtaining debt reschedulings
on an almost continuous basis. The economic adjust-
ment efforts, however, have not been consistently
vigorous and sustained, in the view of the IMF. This
inconsistency has helped to delay Zaire's economic
recovery.
The Political Dimension
We do not perceive any serious adverse political
fallout in Zaire from its debt problems and accompa-
nying economic reform programs. President Mobutu
remains firmly in control. The economic problems,
however, reinforce ethnic tensions, continuing de-
mands for a less autocratic political system, and
expectations of improved living standards.
According to the US Embassy, Mobutu is becoming
increasingly frustrated with the stabilization effort as
budget austerity affects wage scales, public health,
the education system, and the economic infrastruc-
ture. Labor leaders are reportedly unhappy with the
austerity measures, and university personnel orga-
nized strikes in protest last year. We believe Mobutu
will be tempted to retreat from or abandon economic
reform, if he sees his political position to be weaken-
ing because of it.
Background
Zambia's economy has been severely weakened over
the past decade, mainly because of a declining trend
in the prices and production of copper, the country's
main export that in some years accounts for over 90
percent of export earnings. According to the IMF, the
real purchasing power of Zambia's exports has fallen
by more than 70 percent since the mid-1970s. The
resulting tight foreign exchange position has, in turn,
adversely affected copper production because of a
shortage of hard currency to import mining machin-
ery and equipment.
Zambia's economic problems have been exacerbated
by earlier expansionary fiscal policy and unsustain-
able domestic expenditures that contributed to rapid
increases in debt and the accumulation of debt pay-
ment arrears. By 1980, Zambia's external debt had
topped $3 billion and, by 1985, had reached $3.6
billion.
Elements of the Debt Problem
Zambia's debt problems first emerged in August 1975
as the country's commercial payments arrears began
to build up with a decline in copper prices. These
arrears mounted to $646 million by the end of 1978,
according to IMF reporting. Commercial arrears de-
clined to $328 million by May 1982, as the economic
picture improved with a cyclical upturn in copper
prices. The price upturn was not sustained, however,
and by yearend commercial arrears had assumed
crisis proportions as they surged to $800 million,
according to the IMF.
By 1983, Zambia was forced to ask its foreign
creditors for debt relief. By yearend, however, Lusaka
was again in arrears to Paris Club and other creditors
for $235 million. To ease the debt burden in 1984,
rescheduling arrangements were made with official
creditors outside the Paris Club (East Germany, the
Soviet Union, and Yugoslavia); with the London Club
of commercial bank creditors; and with some other
private creditors.
Despite widespread debt rescheduling on favorable
terms, Zambia has been unable to meet its debt
service obligations since 1983. The country fell deeply
in arrears last year. According to IMF reporting,
Lusaka could not meet the 1985 payments on debt
rescheduled from the previous year. Practically
no payments were made to commercial bank and
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Table 9
Zambia: Selected Economic Data
Gross domestic
product (billion US $)
3
3
4
Real GDP growth
(percent)
1
-3
3
Trade balance
(million US $)
213
652
343
Exports, f.o.b.
(million US $)
831
1,408
1,457
Imports, f.o.b.
(million US $)
618
756
1,114
Current account
balance b
(million US $)
-321
69
-444
International reserves
(million US $)
51
80
78
Inflation
(percent)
Estimated.
b Goods, services, and private transfers.
Consumer prices.
bilateral creditors. These failures have made it even
more difficult for Zambia to obtain badly needed new
financing.
In the face of its economic crisis, Zambia has under-
taken economic adjustment programs with IMF and
World Bank support. The country's longer term ob-
jective is a diversification of the economy in both
agriculture and manufacturing. In our judgment,
however, no significant progress has been made so far.
Until this objective is achieved, and because the
copper market remains weak, we see no medium-term
solution to Zambia's external debt crisis.
The Political Dimension
Because of the usual conditions imposed by its Paris
Club creditors, Zambia has implemented IMF pro-
grams that have been a requirement for the reschedul-
ing of its external debt. Also, in our view, economic
reform is necessary for Zambia to continue to receive
assistance from abroad for diversifying its economy
over the longer term. According to US Embassy
reporting, Zambia's reform efforts have run into
opposition from the labor movement. According to
press reporting, key critics within the government
remain bitterly opposed to reductions in central plan-
ning and subsidies.
Although Zambia has made impressive economic
policy changes over the past two years, according to
the US Embassy, we believe that the prospect of
increased political opposition to these policy changes
contributed to a retreat from economic reform this
year. Lusaka has exceeded domestic credit targets,
and its fiscal position has worsened because of poor
management. We believe this development to be
temporary and aimed at putting together, with the
approval of foreign donors, a less austere economic
package, thus defusing potential unrest.
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Appendix B
Methodological Note
Debt and Debt Service Data
Data on African debt and debt service are estimates.
Substantial data deficiencies exist for several coun-
tries, particularly for debt owed by the private sector
and for short-term debt in general. The data differ
according to the source of the estimates. Principal
compilers of African debt data besides the CIA's
Directorate of Intelligence are the World Bank, the
OECD, and the IMF. The various data sources agree
on overall trends, but may differ on specifics for
individual countries. When we use estimated debt
data from outside sources, we cite these sources in the
text.
Estimating Medium- and Long-Term Debt
For most countries, we estimate medium- and long-
term debt from World Debt Tables (WDT), published
by the World Bank; International Financial Statistics
(IFS), published by the IMF; and Maturity Distribu-
tion of International Bank Lending, published by the
Bank for International Settlements (BIS). We took
data on debt from official sources from the WDT. We
derived the base for debt from private sources by
comparing WDT data on disbursed debt owed to
financial markets with medium- and long-term debt
estimates derived from IFS and BIS data.
To obtain IFS/BIS estimates of medium- and long-
term debt held by foreign banks, we subtracted BIS
assets maturing within one year from total BIS assets,
and then added the prior year's BIS assets maturing
within one to two years. We then compared total BIS
assets with IFS foreign bank assets located in develop-
ing countries. If the IFS total exceeded the BIS
number, we multiplied the IFS number by the ratio of
the BIS medium- and long-term estimate to total BIS
assets.
If the IFS or BIS estimate on medium- and long-term
debt exceeded the WDT debt owed to financial
markets, we used these estimates instead of the WDT
figure. When the WDT had data on nonguaranteed
debt, we compared the IFS or BIS medium- and
long-term estimate with WDT total debt-including
private nonguaranteed-owed to financial markets. In
cases where the IFS or BIS estimate exceeded the
WDT estimate, that amount again was used in place
of the WDT figure.
To obtain 1985 debt estimates, we projected the WDT
1984 estimates to yearend 1985. Although the WDT
does not have 1985 individual country estimates, it
does publish aggregate estimates under regional coun-
try groupings. These aggregates are divided between
debt owed to official and private sources. To obtain
specific country base estimates on official and official-
ly guaranteed debt for 1985, we multiplied the 1984
WDT debt totals for each LDC by 1 plus the
percentage change from 1984 to 1985 of the WDT
aggregate debt estimates. We also used OECD data
to form a base estimate for countries that do not
report their debt to the World Bank, or in cases where
we believed a large portion of nonguaranteed debt was
not represented in the WDT, IFS, or BIS data. We
used other information, including US Embassy re-
ports and LDC government data, to adjust the base
estimates.
Estimating Short-Term Debt
For most countries, we estimated short-term debt by
first subtracting our BIS medium- and long-term debt
estimates from total BIS assets. When the IFS debt
held by foreign banks exceeded the BIS number, we
multiplied the IFS total by the ratio of the BIS short-
term estimate to total BIS assets. We then added the
short-term estimate derived from the BIS or IFS to
the IFS data on nonbank deposits in developing
country banks to get a base estimate. We used open-
source data when available. Short-term debt estimates
for Liberia-where major offshore banking activities
prevent separating loans used by the country from
loans involved in the offshore facilities-were estimat-
ed from OECD data rather than BIS or IFS data.
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88TOO768ROO0400420001-6
Appendix C
Sub-Saharan Africa: External Debt
and Debt Service a
Principal (medium/long term)
2,160
3,001
3,476
3,784
4,280
5,360
6,419
Interest (total)
2,194
3,271
3,906
4,365
4,370
5,133
5,153
Medium/long term
1,502
2,353
2,640
3,093
3,182
3,779
4,045
Total debt
210
358
616
741
697
768
1,258
Medium/long term
201
317
453
553
554
625
964
Official sources
120
160
212
238
260
280
320
Principal (medium/long term)
35
79
87
94
95
104
160
Interest (total)
14
29
65
72
55
66
92
Medium/long term
13
24
38
49
41
51
68
Short term
1
6
27
23
14
15
24
Benin
Total debt service
8
52
66
16
28
42
81
Principal (medium/long term)
3
31
44
9
11
22
50
Interest (total)
5
20
22
7
17
20
31
Medium/long term
3
18
20
6
13
17
26
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88TOO768ROO0400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Sub-Saharan Africa: External debt
and debt Service a (continued)
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
(continued) a
1,018
1,218
1,319
1,351
1,362
1,365
1,375
Principal (medium/long term)
103
148
174
247
217
255
307
Medium/long term
79
140
163
Medium/long term
18
Official sources
18
20
39
59
67
66
70
Principal (medium/long term)
0
0
0
1
3
4
5
Interest (total)
0
0
0
1
3
5
4
Medium/long term
109
160
190
Principal (medium/long term)
0
1
3
2
11
6
8
Interest (total)
1
1
2
3
7
6
8
Medium/long term
0
1
1
3
7
6
7
Short term
I
I
I
1
0
0
0
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Sub-Saharan Africa: External Debt
and Debt Service a (continued)
Short term
0
1
0
0
1
1
2
Total debt service
0
0
1
2
2
3
4
Private sources
351
452
649
932
1,006
1,054
1,072
Short term
162
207
65
121
123
130
235
Total debt service
153
137
202
269
328
382
447
Principal (medium/long term)
87
64
105
158
211
241
296
Interest (total)
66
73
97
111
117
141
151
Medium/long term
46
44
86
96
106
127
131
Short term
19
29
11
15
12
14
20
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
(continued) a
Medium/long term
21
26
22
46
56
123
135
Official sources
21
21
16
18
28
58
70
Total debt service
2
3
5
9
10
20
21
Principal (medium/long term)
1
2
2
6
7
10
11
Interest (total)
1
1
2
3
4
10
10
Medium/long term
1
1
1
3
3
8
7
Short term
0
0
1
1
1
2
3
Private sources
3
7
10
24
26
25
20
Short term
1
5
1
1
2
0
8
Total debt service
1
3
5
3
3
1
5
Principal (medium/long term)
1
2
4
3
2
1
2
Interest (total)
0
1
1
0
1
0
3
Medium/long term
0
0
0
0
1
0
2
Short term
0
1
0
0
0
0
1
Ethiopia
Short term
74
55
84
77
71
93
96
Total debt service
37
42
57
64
83
121
140
Principal (medium/long term)
15
17
26
33
49
68
85
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Sub-Saharan Africa: External Debt
and Debt Service a (continued)
1,760
1,631
1,234
1,376
1,351
1,362
1,346
1,566
1,403
1,087
1,203
1,115
1,105
1,195
Total debt
83
136
161
175
190
222
219
Medium/long term
71
118
145
160
174
184
187
Official sources
51
82
111
122
127
128
130
Principal (medium/long term)
3
2
1
9
7
7
10
Interest (total)
3
4
5
4
4
10
10
Medium/long term
2
1
3
2
3
6
7
Total debt
1,243
1,340
1,521
1,627
1,478
1,454
1,578
Medium/long term
1,063
1,230
1,261
1,438
1,326
1,237
1,250
Official sources
701
878
928
953
988
996
1,050
Private sources
362
353
333
484
338
240
200
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88TOO768ROO0400420001-6
Secret
(continued) a
Guinea
Total debt
1,144
1,158
1,359
1,383
1,319
1,252
1,279
Medium/long term
1,064
1,111
1,301
1,328
1,259
1,203
1,210
Official sources
806
837
1,068
1,057
1,054
990
1,000
Private sources
258
274
234
271
206
214
210
Short term
80
47
58
55
60
49
69
Total debt service
117
122
104
105
77
119
140
Principal (medium/long term)
76
85
68
66
49
89
107
Medium/long term
31
30
26
32
23
24
28
Short term
10
7
10
7
6
5
6
Guinea-Bissau
Total debt
62
106
112
137
157
161
184
Private sources
17
30
26
34
33
23
25
Short term
2
2
1
0
9
12
24
Total debt service
2
3
3
4
4
5
10
Principal (medium/long term)
1
2
1
3
3
3
5
Interest (total)
1
1
1
1
2
2
5
Medium/long term
1
1
1
1
1
0
3
Short term
0
0
0
0
1
I
2
4,467
5,782
6,039
7,288
6,935
6,821
7,013
Official sources
1,075
1,209
1,156
1,440
1,623
1,987
2,200
Private sources
2,778
3,668
3,995
4,891
4,517
4,198
4,100
Short term
614
906
888
957
795
636
713
Total debt service
709
1,122
1,268
1,405
1,164
1,039
799
Principal (medium/long term)
385
598
655
696
566
427
205
Interest (total)
324
524
613
709
598
612
594
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88TOO768ROO0400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Sub-Saharan Africa: External Debt
and Debt Service a (continued)
2,086
2,975
2,931
3,028
3,168
3,328
3,708
1,867
2,653
2,681
2,813
2,891
3,062
3,400
Official sources
1,064
1,264
1,397
1,623
1,748
2,149
2,500
Short term
1
0
0
1
1
0
0
Liberia
Total debt
553
643
705
765
887
960
1,010
Medium/long term
468
564
630
644
742
821
875
Official sources
313
402
475
489
533
596
650
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6 -
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88TOO768ROO0400420001-6
Secret
(continued) a
Medium/long term
728
1,171
1,662
2,129
2,066
2,136
2,150
Principal (medium/long term)
32
55
55
120
120
156
170
Interest (total)
39
52
46
77
60
9
135
Medium/long term
25
39
35
69
48
83
130
Medium/long term
566
747
760
749
751
748
725
Principal (medium/long term)
27
48
53
36
34
53
52
Interest (total)
39
55
62
44
38
38
37
Medium/long term
29
43
56
36
32
34
32
Total debt
713
842
797
827
925
1,093
1,167
Medium/long term
533
692
739
823
916
1,040
1,120
Official sources
490
649
714
791
873
930
1,000
Principal (medium/long term)
9
9
8
5
8
21
23
Interest (total)
26
27
14
8
8
21
28
Medium/long term
5
6
4
7
7
16
24
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88TOO768ROO0400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Sub-Saharan Africa: External Debt
and Debt Service a (continued)
Total debt service
122
164
219
220
246
283
281
Principal (medium/long term)
76
97
134
131
150
154
161
Interest(total)
47
68
85
89
97
129
120
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88TOO768ROO0400420001-6
Secret
(continued) a
Medium/long term
406
704
908
837
814
840
860
Official sources
200
271
377
389
455
522
600
Principal (medium/long term)
27
68
81
102
83
62
50
Medium/long term
19
43
61
Short term
11
21
21
18
12
12
12
6,702
9,260
14,033
19,598
19,864
20,465
4,182
5,466
7,488
9,862
13,038
12,710
13,160
Private sources
3,245
4,474
6,377
8,520
11,073
10,528
10,960
1,236
1,772
4,171
6,560
7,154
7,305
Total debt service
558
986
1,635
2,271
2,957
4,245
4,817
Principal (medium/long term)
187
278
644
837
1,230
2,191
3,000
Interest (total)
371
708
991
1,434
1,728
2,055
1,817
Medium/long term
257
535
693
Private sources
4
5
9
13
0
0
0
Principal (medium/long term)
1
1
2
5
2
3
7
Interest (total)
4
6
7
7
5
8
6
Medium/long term
1
2
3
3
2
3
3
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88TOO768ROO0400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Sub-Saharan Africa: External debt
and debt Service a (continued)
1,098
1,226
1,384
1,807
2,098
1,870
2,006
835
929
1,055
1,518
1,834
1,662
1,755
451
577
710
967
1,286
1,358
1,450
384
352
345
551
548
304
305
Short term
263
297
329
289
264
208
251
Total debt service
158
225
162
149
158
141
183
Principal (medium/long term)
80
127
60
52
66
56
64
Interest (total)
78
98
102
96
92
86
119
Medium/long term
46
57
47
61
67
63
98
Short term
32
42
55
35
25
23
21
Total debt
477
89
45
70
72
84
91
Medium/long term
18
32
37
60
65
67
74
Official sources
13
25
28
31
36
37
40
Private sources
5
7
9
30
28
30
34
Short term
459
57
8
10
7
17
17
Total debt service
56
10
4
8
9
11
13
Principal (medium/long term)
1
1
2
4
5
6
8
Interest (total)
56
9
2
4
4
6
5
Medium/long term
I
I
1
3
3
4
4
Short term
55
8
1
1
1
2
1
Sierra Leone
Private sources
191
156
162
159
116
276
263
Short term
35
79
135
153
186
84
128
Total debt service
64
64
79
44
34
71
83
Principal (medium/long term)
43
41
43
17
11
39
47
Interest (total)
20
23
37
26
23
32
36
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
(continued) a
Medium/long term
679
749
1,027
1,151
1,314
1,441
1,522
Principal (medium/long term)
15
12
43
10
27
53
54
Interest (total)
14
12
6
13
21
32
48
Medium/long term
8
5
4
9
16
24
42
Principal (medium/long term)
32
62
58
99
50
43
50
Interest (total)
97
130
247
120
93
124
121
Medium/long term
43
47
92
17
37
65
75
Principal (Medium/long term)
7
11
13
20
20
22
25
Interest (total)
7
12
11
15
18
18
17
Medium/long term
6
10
10
14
14
17
16
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Sub-Saharan Africa: External Debt
and Debt Service a (continued)
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
(continued) a
4,374
4,417
4,417
4,254
4,570
4,297
4,681
Short term
306
252
291
205
196
213
281
Total debt service
201
394
240
161
146
375
465
Principal (medium/long term)
69
164
66
64
39
143
150
Interest (total)
131
230
174
97
106
233
315
Medium/long term
95
194
125
72
88
210
292
Short term
37
35
49
25
19
23
23
Zambia
Total debt
2,477
3,053
3,038
3,235
3,293
3,434
3,560
Total debt service
365
413
438
275
185
181
249
Principal (medium/long term)
215
202
230
91
48
50
50
Interest (total)
150
212
208
184
137
132
199
Medium/long term
106
116
111
84
75
63
151
Short term
45
96
97
99
62
68
47
Zimbabwe
Total debt
558
773
1,313
1,817
2,078
1,871
1,833
Medium/long term
524
697
893
1,256
1,609
1,523
1,535
Official sources
39
103
167
301
398
482
580
Private sources
485
594
726
955
1,210
1,041
955
Short term
34
76
420
561
469
348
298
Total debt service
19
55
144
216
480
314
364
Principal (medium/long term)
7
34
41
53
329
157
221
Interest (total)
11
20
103
163
151
157
143
Medium/long term
7
10
32
95
106
119
118
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
 Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6
Secret
Secret
Declassified in Part - Sanitized Copy Approved for Release 2011/12/13: CIA-RDP88T00768R000400420001-6