Zaire Table of Contents
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
Zaire Table of Contents