Zaire

FOREIGN ECONOMIC RELATIONS

Trade and Balance of Payments

Spanish fishing boat at Zaire's main port of Matadi on the Congo River
Courtesy Agence Zaïre Presse

Shallow-draft dugout on Lac Tumba, Équateur Region

Total exports for 1991 were estimated at US$1.5 billion (see table 12, Appendix). Six products--copper, cobalt, crude petroleum, diamonds, coffee, and gold generally accounted for over threefourths of export earnings (see table 13, Appendix). Total imports in 1991 were estimated at nearly US$1.2 billion, with the largest single import, US$362 million, being goods for Gécamines (see table 14, Appendix). Luxury goods for expatriates and the Zairian elite also constitute a substantial portion of imports.

The trade balance was positive throughout the late 1980s, but by 1991 had dropped sharply because of decreases in world market prices for many of Zaire's commodity exports (copper, coffee, diamonds, crude oil, and cobalt), drops in production, and rises in import prices. The current account balance (which includes goods and services) was consistently negative, however, because of the massive increase in external debt-servicing requirements. Trade surpluses were more than swallowed up by outflows on the services account. Inflows on services could not make up the deficit, resulting in a negative current account balance and, generally, in a negative overall balance of payments as well because net capital transfers were also insufficient to cover the deficit. Ironically, Zaire's current account showed great improvement (by more than 75 percent) in 1992, largely because of a dramatic 52 percent decline in imports, which outweighed the 35 percent drop in exports.

Belgium, the United States, and other West European countries are the destinations of most of Zaire's exports (see table 15, Appendix). However, since 1989 South Africa has also been an increasingly important trading partner. Zaire reportedly exchanges coffee, wood, and minerals for South African food, agricultural machinery, and spare parts. Official figures on trade with South Africa are sketchy, but there is an abundance of South African food products available in Kinshasa, including large quantities of fresh produce.

The economic problems confronting developing countries that rely predominantly on extractive product exports have been well documented. In Zaire agricultural exports declined steadily from nearly half the value of all exports in 1958 to 11.6 percent in 1986. Coffee was the primary agricultural export commodity, contributing 7 percent of export revenues in 1988, while cotton was no longer being exported in the early 1990s but was produced mainly for domestic consumption. Copper and cobalt alone accounted for nearly half of all export earnings in 1987 and 1988. Three of the four largest companies in Zaire (Gécamines, Gulf, and Miba) accounted for 70 percent of export earnings and were mineral or petroleum companies. Mineral prices fluctuated dramatically throughout the decade. Even for cobalt, where Zaire and Zambia had a near monopoly, the two countries had difficulty maintaining a price floor.

Theft, looting, and smuggling also are widespread in the Zairian economy. Cross-border smuggling and unlicensed trade have been widespread since independence but have expanded markedly in the troubled 1990s. Although both activities deprive the government of revenues, they do provide consumers with goods that are otherwise unavailable or unattainable because of the lack of foreign exchange and hard currency needed for official imports. Traders smuggle out primary products such as gold, diamonds, cobalt, coffee, and ivory in order to barter for or obtain the hard currency to purchase consumer goods such as vehicles, spare parts, fuel, electrical appliances, construction materials, pharmaceuticals, and foodstuffs.

Data as of December 1993

Zaire - TABLE OF CONTENTS