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Zaire ECONOMY
General Character: Since colonial times,
dependent on
exports of few commodities, particularly copper, cobalt,
and
coffee. Heavy government participation in and ownership of
enterprises in all sectors, especially mining; management
often
inefficient, corrupt. Postindependence development
undermined by
misguided, overambitious economic policies. Key sectors
and
infrastructure neglected. In early 1990s, economy on verge
of
collapse despite vast mineral resources; formal sector
barely
operational; most activity in informal economy.
Gross Domestic Product (GDP): GDP growth
negative since
1989, estimated at -8.0 percent in 1992. Statistics rough
approximations not including large informal economy,
estimated to
be three times size of official economy.
Currency and Exchange Rate: Consistently
overvalued zaire
(Z) leading to huge discrepancy between official and
black-market
exchange rates. Dramatic decline in value since 1985.
Exchange rate
in 1985: Z50 = US$1; rate in December 1993 estimated at
Z110,000,000 = US$1.
Budget: Government regularly overspent since
independence. Financial administration characterized by
widespread
mismanagement, corruption, and poor budgetary control.
Budget
deficit Z703,632 million in 1992, projected to total
Z1,097,909,000
million in 1993. Government generally regarded as bankrupt
in early
1990s.
Debt: Massive foreign debt, estimated at
US$10,705
million in 1991. Debt-service ratio 15.4 percent in 1990.
In 1992
Zaire essentially terminated debt repayment, paying only
US$79
million of US$3,450 million due. Main bilateral and
multilateral
lenders froze financial aid programs in early 1990s,
regarded as
unlikely to agree to reschedule or cancel existing debt or
to
approve further borrowing.
Agriculture: Main economic sector, employing 65
percent
of work force, accounting for approximately 32 percent of
GDP
throughout 1980s. Potential to be net exporter of
agricultural
produce, but greatly underutilized; as little as 1 percent
of land
under cultivation. Zaire not self-sufficient in food
production in
1990s. Sector neglected, suffered from nationalizations in
1970s,
lack of investment funds, and inadequate infrastructure
for
transport of produce. Major food crops cassava, corn,
rice, and
plantains, followed by bananas, beans, peanuts, millet,
sorghum,
yams, potatoes, and fruits. Main staple food cassava.
Principal
cash crops coffee, palm oil and palm kernel oil, sugar,
cocoa,
rubber, and tea. Coffee most important cash crop; prices,
exports,
and quotas tightly controlled by government. Estimated 30
to 60
percent of coffee crop smuggled out of country.
Mining: Mining, mineral processing, and
petroleum
extraction 17 percent of GDP in 1990. Mineral exports,
principally
copper, cobalt, diamonds, and gold, provided nearly 75
percent of
export earnings in 1990. Sector major source of government
revenues. Traditionally world's largest producer of
cobalt, fifth
largest copper producer, second or third largest producer
of
industrial diamonds. Copper mining mainstay of economy,
but had
virtually collapsed from many years of neglect and from
economic
chaos in 1990s.
Industry: Manufacturing sector accounted for
only 1.7
percent of GDP in 1988. Concentrated in Kinshasa and
mining area of
Shaba, consists largely of consumer goods, mainly food
processing,
textile manufacturing, beer, cigarettes, metalworking,
woodworking,
and vehicle assembly. Manufacturing in formal economy
virtually at
standstill by 1992 in wake of general economic chaos and
militaryled looting and rioting. Many enterprises in informal
sector.
Energy: Sector largely government-controlled,
but lacks
coordination and planning. Tremendous hydroelectric
potential,
estimated at 100,000 megawatts. Installed capacity
estimated at
2,486 megawatts in 1987, with 95 percent hydropower.
Largest
hydroelectric site at Inga dams on lower Congo River
supplies
mining center, main power consumer, in Shaba Region via
1,725-
kilometer high-voltage transmission line. Operational
status of
line precarious in early 1990s because of lack of
maintenance.
Fuelwood and charcoal primary household energy sources and
used by
small industries, contributing to deforestation. Offshore
oil
production since 1975, onshore since 1979. Reserves
estimated at
140 million barrels in early 1990s, likely to be depleted
unless
new exploration successful. Domestic production heavy
crude that
cannot be refined domestically; all production (9.9
million barrels
in 1991) exported for refining. Petroleum imported for
refining to
meet domestic need for fuel and other finished petroleum
products.
Foreign Trade and Balance of Payments: Copper,
cobalt,
crude petroleum, diamonds, coffee, and gold most
significant
exports. Primary imports machinery and other capital goods
for
mining industry as well as fuels, consumer goods, and
foodstuffs.
Belgium, United States, and other West European countries
main
partners. Trade balance positive in 1980s but dropped by
1991
because of decrease in world commodity prices, drops in
production,
and rises in import prices. Current account balance
consistently
negative because of massive increase in external
debt-service.
Overall balance of payments generally negative; net
capital
transfers insufficient to cover current account deficit.
Crossborder smuggling widespread.
Foreign Aid: Multilateral aid and bilateral aid
from
West, especially Belgium, France, Germany, Italy, and
United
States, once significant. All but humanitarian assistance
(primarily food aid) cut off in 1990-91 because of Zaire's
economic
chaos and human rights abuses.
Fiscal Year: Calendar year.
Data as of December 1993
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