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Zaire Budget
The government has regularly overspent since
independence,
largely because of enormous and costly development
projects.
Financial administration has been marked by poor budgetary
control,
accompanied by widespread mismanagement and corruption.
Money for
the ambitious plans to make Zaire a regional industrial
power was
provided by foreign governments and commercial banks,
anxious to
channel the country's enormous potential petrodollar
surpluses into
assets.
The budget was drafted by the financial ministries and
promulgated by the National Legislative Council.
Accountability was
lacking, however, and much of Zaire's government spending
was
untraceable until reform efforts began in the mid-1980s.
World Bank
and IMF technical experts who tried to audit Zairian
government
expenditures were only partially successful. Budgets in
the early
1980s distributed 50 percent of outlays to political
institutions
and government, 23 percent to the military, 3 percent to
health,
and 3 percent to education. Agriculture was not a high
budgetary
priority.
The budget for fiscal year (
FY--see Glossary)
1987,
drafted
under IMF tutelage, estimated revenues at Z100 billion.
Current
revenue accounted for Z82.3 billion, and counterpart funds
(contributions from external sources) accounted for Z17.7
billion.
The main sources of current revenue were: customs and
duties, Z28.3
billion; direct and indirect taxes, Z25.9 billion;
Gécamines, Z15.3
billion; and oil revenue, Z7 billion.
Expenditures for FY 1987 were Z106 billion. Of that
amount,
Z88.3 billion went to current expenditures, with costs
broken down
into administration, Z26.5 billion; external debt service,
Z26.5
billion; personnel, Z16.8 billion; capital, Z13.2 billion;
and
internal debt service, Z5.3 billion. The defense ministry
was the
largest item under administrative costs, receiving Z5.2
billion or
50 percent of all ministry expenses. The IMF permitted
Zaire to run
a Z6 billion deficit in FY 1987. The investment budget
stood at
Z13.2 billion, compared with planned investment
expenditures of
Z167 billion in the 1986-90 period.
The public finance deficit widened to over Z60 billion
in FY
1988, when revenue stood at Z134.4 billion and
expenditures at
Z195.1 billion. First-quarter revenues in FY 1989 exceeded
expenditures by 9.5 percent, creating a small budget
surplus. But
the situation greatly deteriorated in FY1990 when
consistent and
credible economic policy was made impossible by a
prolonged
political crisis, resulting in several revisions of the
fiscal
year's draft budget
(see Political
Reform in the 1990s
, ch. 4). The
initial draft budget providing for Z584,300 million and
revenue of
Z554,300 million was revised after the government admitted
that the
economy was uncontrollable because of a fall in export
revenues
resulting from weak commodity prices, and a hyperinflation
rate of
an estimated 1,300 percent (other figures for the
country's
inflation rate were vastly higher). Following devaluation
of the
zaire, the revised budget approved in July 1991 estimated
expenditures at Z4,600,000 million, with revenues
projected at
Z3,600,000 million. The budget deficit for FY 1992 was
Z703,632
million, more than ten times higher than planned; the FY
1993
deficit was projected to total almost Z1,098 billion.
All reports indicate that the government is bankrupt.
The tax
collection system is defunct, few if any customs revenues
are
collected, and foreign aid (other than humanitarian
assistance) has
been virtually cut off. Copper production, formerly a
major source
of government revenue, has dropped off significantly;
however, many
sources believe that the Mobutu regime continues to obtain
funds
from the diamond trade (both legal and illicit). To pay
its bills,
the government has had new currency printed abroad, first
in
Germany and then in Britain, and flown in but increasingly
has had
difficulty even paying these printing bills. In late 1993,
Zaire
was reported to be deeply in debt to the British and
German firms
that printed Zairian money for the Mobutu regime.
Data as of December 1993
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