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Zaire Investment Projects
The early 1970s saw a rash of poorly conceived
industrial
development projects, which were launched without sensible
and
comprehensive economic planning and institutional support.
Moreover, Zaire displayed a penchant for massive
industrial and
energy projects, neglecting the rural sector and
transportation,
both of which were in dire need of an infusion of
resources. For
example, an Italian consulting firm sold the idea of a
steelproducing facility in Bas-Zaïre Region to Mobutu as an
importsubstitution scheme. The consulting firm that developed
the plant
at Maluku was a subsidiary of the contracting company. The
project,
begun in 1972 and completed in 1975, cost the Zairian
government
US$250 million. There were no foreign equity investors.
Because
there was no serious planning to develop iron-ore
deposits, the
mill operated on costly imported scraps at 10 percent of
capacity
until it ceased operations in 1980.
The massive Inga I and Inga II hydroelectric facilities
also
created a severe drain on Zairian resources. The project
was
initially scheduled for completion in 1978 but was not
finished
until 1982. The load forecast used to justify the project
was based
on overly optimistic expectations of copper price rises,
mining
expansion, and rapid expansion of the economy generally.
Its cost
was estimated at US$2 billion in 1983 prices, financed by
the
United States Export-Import Bank and the governments of
Italy and
Sweden. But cost overruns and underestimated management
costs for
foreign managers turned cheap power into expensive
electricity as
Zaire struggled under the heavy debt burden incurred to
build and
maintain the project. In 1990 Inga II generated only 14
percent of
its total capacity. A planned free-trade zone and a Swiss
aluminum
refinery near the dam had also failed to materialize.
The Zairo-Italian Society Refinery (Société
Zaïro-Italienne de
Raffinage--Sozir) oil refinery, in Moanda on the Atlantic
Coast,
was another costly operation built by an Italian firm. It
was
constructed in 1967 before offshore crude oil production
began. The
refinery was designed to refine a lighter crude than was
eventually
produced from Zaire's coastal wells. Refining Zaire's
production
would result in too much heavy fuel and not enough lighter
products. It was therefore more economical to export
Zairian crude
oil and to import most refined products and all the crude
petroleum
to be processed at the Sozir plant. The refinery ran at 10
percent
of capacity until September 1984 when it was closed.
Subsequently,
in 1986 small shipments of Nigerian crude were refined,
but the
refinery remained essentially idle.
Data as of December 1993
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