Country Listing

Zaire Table of Contents


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