Zaire Table of Contents
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
Zaire Table of Contents