BELGIAN CONGO Public Disclosure Authorized

RESTRICTED

Report No. EA-77a

~ ~ ~- ovVEEK Public Disclosure Authorized This report was prepared for use within the Bank. In making it available to others, the Bank assumes no responsibility to them for the accuracy or completeness.of the information contained herein.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Public Disclosure Authorized

THE ECONOMY OF THE BELGIAN CONGO Public Disclosure Authorized

November 19, 1957 Public Disclosure Authorized

Department of Operations Europe, Africa and Australasia CONVERSION RATES FOR BELGIAN AND BELGIAN CONGO CURRENCY

1 Belgian franc = 1 Congo franc U.S:. $1 50 francs 1 franc = 2 U.S. cents 1,000,000 francs U.S. $20,000 CONTENTS Page

Maps

Charts

Basic Data

Summary and Conclusions

The Framework

The Country...... 1 The People...... * 1 Natural Resources...... 2 The Congo Corporations...... 3 The Governn1nt,...... 4

Past Developm-nt Record

The First Forty Years...... The 7rventies...... 5 The Setback,...... 6 World War II and the Aftermath...... 6

The Congo under the Ten Year Plan

Investment...... Financing...... 9 Agriculture...... 10 Mining...... 10 Industry...... 11 Productivity...... o...... 12 The Test of the Ten Year Plan...... 13

Present Position and Outlook

Prospects for Economic Progress...... 14 Future Investment...... 15 Political Development...... 17 Financial Position and Prospects...... 1)

Statistical Appendix 禹 IBRD一385R 一OCTOBER1957 TOc PETOWN BELGIAN CONGO ADMINISTRATIVE DIVISIONS

INTERNATIONAL CAPITALS E30UNDARIES CAPI'ALS PROVINCIAL BOUNDARIES ------PROVINCIAL

RAlLROADS

20' 24-

U D A N

......

...... r -T- ...... 5 LAKE ...... ST .4 1 BERT

KASESE BUS ýYA WARD

RUANDA-. V() KIGAq K4LIMA By RUNDI- ]NDU, suml A U-.

l<1TEf BRAZZAVI LLF 4'

K A KIGOMA

TSH

K A T A UE 5 A -WERU N G 0 L A

8,4,VGWEULU

...... 12

0 l 00 200 300 4CtIdýr- l FEDEýATION OF RHODESIA AND a N SAL

24' 281 IBRD-366 OCTOBER 1957 161 20' BELGIAN CONGO NATURAL RESOURCES

CROPS

Marketable foods C ottonX Oil palm * Coflee Cocoa X X# 6X X, AK..OT Rubber s Copal

Tobaccoan Rice E. Sugar cane

MINERALS

Copper X Cobalt * A Zinc 4A Diamonds Manganese uM BUKAV Tin A Gold ( Coal -

RT FRANU Loke Tongonyika

L-UA,O.URG MATAR T9H7KLBERTVILLE

KMI

LISABETHVILLE

'o10 20O 0 400 500 KM

OCTOBER 1957 IBRD-38 BELGIAN CONGO

GROSS NATIONAL PRODUCT AND MARKETED PRODUCTION (AT 1950 PRICES), AND WAGE EARNERS (BILLIONS OF FRANCS) (MILLIONS OF PERSONS) 6 0 , , ,I I I I I I I I I I-I I I - I-I 1 i 1.5 YEARLY

40 . 1.. WAGE EARNERS (RIGHT SCALE- ) .* /

GROSS NATIONAL PRODUCT .* ** -

20 LEFT SCALE) .5 ** . MARKETED PRODUCTION ., * '****** . ( LEFT SCALE)

0 '0 0 1920 1925 1930 1935 1940 1945 1950 1954

GROWTH OF ECONOMIC ACTIVITY (INDEX, 1948-49= 100) 400 YERY1400 YEARLY

350 350

INDUSTRIAL PRODUCTION (INDEX, 1947-49=100) 300 300

250 250 EUROPE AN AGRICULTURAL PRODUCTION

200 20000 TRANSPORT

I 5 O ...... I.5.

. .yrMINING PRODUCTION

100 100 AFRICAN AGRICULTURAL PRODUCTION

50 50 1948 1949 1950 1951 1952 1953 1954 1955 1956 I0I /57 (Prelim.) 1302 IBRD- Economic Staff BELGIAN GONGO EXECUTION OF THE TEN-YEAR PLAN (BILLIONS OF FRANCS)

0 2 4 6 8 10 12 EXPENDITURE TO DEC. 31, 1956 WATERWAYS AND RAILROADS

ROADS -ESTIMATED EXPENDITURE 1950-59 AIRPORTS

ELECTRIC POWER AND WATER SUPPLY

AGRICULTURE

URBAN HOUSING

PUBLIC HEALTH

EDUCATION

ADMINISTRATION

FINANCING PUBLIC INVESTMENT (BILLIONS OF FRANCS) 10 O

8 SOURCE OF FUNDS KEY PUBLIC INVESTMENT..,. _ ORDINLARY BUDGET6h ______6 INTERNAL BORROWING 4- BRUSSELS MARKET 4 IBRD 2 SWISS MARKET 2 U.5. GOV ERNMENT: 0 - 0 1950 1951 1952 1953 1954 1955 1956 SERVICE PAYMENTS ON THE EXTERNAL PUBLIC DEBT OUTSTANDING AS OF JUNE 30,1957 (MILLIONS OF U.S. DOLLAR EQUIVALENTS) 50 50

40 40 TOTAL 30 -30

20 -~BLGA40 FRANCS,.--*:2 20

O U.S.DOLL ARS AND SWISS FRANCS 0 0 951 1955 1960 1965 1970 1975 1303 IBRD- Economic Staff BELGIAN CONGO GOVERNMENT REVENUE AND EXPENDITURE (BILLIONS OF FRANCS)

0 2 4 6 8 10 12

1938198REV. EXP.

1946 REV

1950 REV.

1951 EV.

1952 EV.

1953 REV.

1954 REV.EV

19561955 REV.EXP. EXP,:

(Prov.)

1957 REV (Est.)

BALANCE OF PAYMENTS ON CURRENT ACCOUNT (MILLIONS OF U. S. DOLLARS) 800 800

PAYMENT S 600 -600 RECEIPTS

OTHERM 400 400 E PU

U. S. AND CANADA 200 200

BE LGIUM 0 0 1952 1953 1954 1955 1956 11/1/57 1304R IBRD - Economic Stoff BASIC DATA

Area 900,000 square miles Population (1956) (2,300,000 square kilometers) African 12,800,000 European 107,400

Gross National Budget results (1955) Product (1955) frs. 57.8 billion ($1.2 billion) Ordinary revenue frs. 10.7 billion (3214 million) 9.5 billion Of which: Ordinaxy expenditure frs. %(0190 million) Agriculture (African and European) 27 Extraordinary expendi- Mining and metallurgy 23 ture frs. 7.0 billion million) Manufacturing, processing of agri- ("$140 cultural products and construction 18 Transport 9 Other 23

Central bank reserves (June 30, 1957) External debt (June 30, 1957)

Gold $115.7 million Long-term $337,1 million 1.0 million Convertible currencies $ 47.9 million Short-term $ Belgian francs $ -9.3 million

Balance of payments (1956)

Receips Payments Balance (in million dollars)

Goods including non-monetary gold 612 372 +240 Services 85 402 -317 Long-term capital 142 68 +74 Short-term capital 32 5 +27

Increase in reserves +24 SUMNARY AND CONCLUSIONS

occupies 1. The Belgian Congo, vast in area and rich in natural resources, 13 the center of tropical Africa. Three-fourths of its native population of million still live in tribal surroundings and administrative, business and techn' cal talent is represented by a European population of 110,000.

2. The money economy is comparatively young and centers on widely scattered most of mining and urban areas. In these live the majority of the Europeans and the 1.2 million African wage and salary earners. The two hubs of economic activity are the Bas-Congo between Leopoldville and Matadi, and the Haut-Katanga around Elisabethville, Jadotville and Kolwezi.

3. Recent economic progress has been rapid. Between 1950 and 1955 gross national product rose by over 40%, productivity increased substantially and industrial African real incomes, though still very modest, went up by 50%. Some development has taken place, the internal market has broadened and the economy grown stronger. Nevertheless, the Congo is still largely dependent on world but other miner- demand for its exports. Of these copper accounts for about 35% on als and agr-cultural commodities are also important and reduce the effects the economy of fluc.tuations in copper demand.

4. At present the Congo is going through a period of financial stringency. Until now public investment has been financed without difficulty, mainly by beung, bdget surpluses and borrowing in the Congo and Brussels. For the time Treasury however, sulicient funds are not available from these sources. The position has deteriorated and the central bank is losing foreign exchange to Belgium. retrenchment 5. Consequently, public investment tends to slow down. Some in Brussels would do no harm at this stage. A Bank loan and an expected issue before long should prevent the reduction from going too deep.

6. Prospects for continued economic growth are favorable. The supply of labor should be adequate now that the population is increasing more rapidly. have been Transport and power facilities are being improved and good foundations plantations are laid for more rapid development of native agriculture. European next few years. expanding and production of tree crops should rise by 50% in the Reserves of most minerals are large and their production costs competitive; increases in out- programs now nearing completion will make possible substantial put. Further advance in industry can also be expected.

7. As in the past, economic progress will require imports of capital.Belgiai long-term capital has traditionally been available to the Congo and, although be at its disposal in there may be temporary interruptions, should continue to the future. With good prospects for economic growth, the Congo, whose existing debt. external debt burden is modest, should be able to service additional THE FRAMEWORK

The Country

1. The Belgian Congo forms the center of tropical Africa, taking up most of the Congo River basin. The square shaped interior, eighty times larger than Belgium and nearly one-third as large as the United States, is linked to the sea by a narrow strip of land along the lower reaches of the river. Sparsel populated by numerous tribes differing in language and custom, and having little sense of national unity, the country is held together by the Belgian Administra- tion.

2. The central lowlands covered with equatorial rain forest are bounded by savannah belts on either side. Mountains rise in the east and a plateau in the south. In the west, a rocky range across the lower Congo River forms the cata- racts which long barred access to the interior. Tropical climate prevails over most of the country but the highlands of the Kivu and the Katanga offer fairly comfortable weather conditions.

3. Size and topography make transport a problem. The backbone of the trans port system is the Congo River and the main outlet to the rest of the world is the Atlantic Ocean nDrt of Matadiy which handles about 60% of the foreitn trdl.e. The non-navigable river sections are by-passed by parallel railroads: Matadi- Leopoldville, Stanleyville-Ponthierville and Kindu-Kabalo. Three other rai- roads branch out from river ports: from Boma into the Mayumbe, from Port Fra.ncqui into the katanga and from Aketi into the northeast. Another railroad cuts across the country from Dilolo on the Angola border to Albertville on Lake Tanganyika, forming part of a trans-continental connection between the Atlantic Ocean port of Lobito and the Indian Ocean port of Dar es Salaam, which together handle over 20% of Congo exports and imports. Roads radiate from the centers, bring goods to water or rail and serve local traffic. The principal towns are linked together by frequent air service.

The People h. The Belgian Congo is the home of 13 million Africans of whom more than three-quarters live in tribal surroundings (Table 1). Average population den- sity is low, only l4 per square mile. Moreover, the people are unevenly dis- tributed; there are vast empty spaces in various parts of the country while, on the other hand, Leopoldville has 350,000 inhabitants and the three industrial centers in the Haut-Katanga 280,000 (Table 2). A pronounced cultural contrast exists between the tribal society still largely concerned with growing food for subsistence and the urban wage- aisalary-earning community. There is further a cultural gap between the sexes. The man was the first to go to the mission school, to come into contact with the Europeans and settle in town. The woman long remained dependent on family and tribe; even now, she seldom does paid work. Of the 1.3 million school children - about 55% of all children of school age - only a small fraction are girls.

5. After years of very slow increase, the population appears to be entering a new phase of fairly rapid growth. The present annual rate of increase is - 2 -

estimated at 2.2% but varies substantially between regions. The urban population of the Bas-Congo and the Haut-Katanga, and the highland population in the Kivu have a rate of natural growth higher than the average, whereas certain areas in the center and north show stagnation or decline.

6. The Congo has never been considered a place for large-scale European settlement and strict health, financial and other requirements have kept immigration down and "poor whites" out. The Europeans number 110,000, or less than 1% of the African population. As a consequence of improved health and living conditions, women and children now account for well over half the total and the present expansion in the European population is a result of natural growth as well as immigration. The men are primarily administrators, missionaries, managers and supervisors; independent European settlers, i.e. merchants, craftsmen and farmers, number less than 10,000 (Table 1).

Natural Resources

7. Large tracts of unused land could eventually be made available for agricultural purposes. However, two factors restrict the utility of most of this land. Transportation problems confine its exploitation for cultivated crops to areas alorg navigable rivers, railroads and roads. Second, the leached-out condition of the soils and their low capacity to utilize fertilizer limit their productivity and make necessary a long rotation and a system of fallowing the land.

8. More than four-fifths of present output is produced on tribal lands by the Africans using a system of shifting cultivation with long-term fallows. Given the generally prevailing technical knowledge of the producers, the system, which employs little or no animal or mechanical power and only the simplest of tools, is well adapted to the poor soils and climatic conditions of the country. African agriculture is directed primarily towards subsistence crops plus the local produce required to supply urban centers, the mines and the plantations. The main crops for local consumption are manioc, maize, sweet potatoes, rice, peanuts, plantains, peas and beans. The main African export crops are cotton, palm oil, coffee and rubber (Table 5).

9. European agriculture, representing about 16% of total output, is directed primarily towards export crops, particularly the tree crops which are produced in the equatorial rain forest belt and in the Mayumbe. The main crops are oil palm, rubber, coffee, cocoa and bananas, but there is a small area in sugar cane, tea, cinchona bark and pyrethrum. Organization is of the plantation type, European-managed with African labor. It varies from large-scale plantations to relatively small ones. Europeans also produce a considerable proportion of the livestock products.

10. The Congo is rich in minerals. Mineral exports now amount to about $300 million equivalent, of which copper accounts for 55% and cobalt for more than 10%. Copper reserves are estimated at 40 million tons; their metal content is on the average higher than in Northern Rhodesia and two or three times as high as in Canada or Chile. Cobalt reserves are also large and of high metal content. - 3 -

11. Over 70% of the deposits now being exploited is situated in a small area of the Haut-Katanga, between Elisabethville and Kolwezi. Besides copper and cobalt, this area also produces uranium, zinc, silver, cadmium and germanium. In the southwest of the country lie two diamond fields, which supply two-thirds of the world's industrial diamonds, and the rich Kisenge manganese mine. Tin and minerals found in association with tin, such as wolfram, tantalo- columbite and bery, are mined in the east; except at Manono and Kalima, the deposits are small and widely scattered. Gold is extracted in the northeast of the country, two-thirds of the production being supplied by the Kilo-Moto mines.

12. The hydroelectric potential of the country is tremendous. The lower reaches of the Congo River could provide power for 25 million kw. There are resources elsewhere but these too are as yet hardly tapped, except in the Haut-Katanga where the Lualaba River and one of its tributaries have been harnessed in several places. The forest supplies plenty of firewood. There are two coal fields, in the Katanga and near Lake Tanganyika, but the quality is poor and transport difficulties limit the area of distribution. No oil has yet been found and the Congo relies exclusively on external supplies. However, important quantities of methane gas were discovered in the deep waters of Lake Kivu a few years ago and the possibilities of exploiting it are under study.

The Congo Corporations

13. The Congo was developed through close cooperation of business and Government. Even today a few large corporations, in some of which the Govern- ment holds a large or even controlling interest, have great influence on its economic life. These corporations are the largest tax payers and the Govern- ment is the largest dividend earner in the Colony.

14. Most of the large corporations were formed early in the century when the private purse of Leopold II, King of the Belgians and Sovereign of the Congo, proved too small to explore and develop the country's resources. They were granted concessions in return for which the Congo obtained - as a rule - a 50% participation in the capital or profits. They built railroads, opened up mines and cut timber. They also provided administration in their territories. Sometimes, as in the Katanga, where the land they received was practically deserted, they had to bring in workers and provide them with food and shelter. To stabilize their labor force, the corporations gradually created conditions more suitable for family life and put up houses, hospitals and schools. Although they have long transferred administrative duties to the Government, they are still largely responsible for the welfare of their African workers and it is difficult to draw a line between business activity and public responsibilities.

15. A few of the corporations deserve mention. Union Miniere du Haut- Katanga, which supplies 7.5% of the world's copper and two-thirds of its cobalt, runs a mining empire complete with its own hydroelectric plants, satellite industries, private roads, housing settlements and welfare facilities. The Compagnie des Chemins de Fer du Bas-Congo au Katanga (BCK) operates the railroads between Port Francqui, Dilolo and Sakania, and through its mining subsidiaries controls most of the diamond and manganese output of the Congo. The Societe Internationale Forestiere et Miniere (Forminiere), in which the Government has a majority participation,works;its own diamond fields and those of BCK, and exploits forests and plantations in the Leopoldville province. Rail and water transport in the east of the country is in the hands of the Compagnie des Chemins de Fer du Congo Superieur aux Grands Lacs Africains (CFL) which also operates tin and gold mines through a subsidiary company.

16. Most of the large Congo corporations were established under the auspices of Belgian financial groups, Societe Generale de Belgique being by far the most important in this respect. They have their headquarters in Brussels and maintain close business relations with the members of the same group operating in the mother country. This, more than anything, explains the preponderant role of Belgium as supplier, shipper, banker and broker of the Congo. The strongest foreign financial influence is represented by the Huileries du Congo Belge, a Lever Bros. subsidiary with vast oil palm, rubber and cocoa plantations, but there is a British interest in Union Miniere and an American one in Forminiere.

The Government been, since 17. The Congo became a Colony of Belgium in 1908 after having 1885, a domain of King Leopold II under the name of Congo Free State. The Law on the Government (the Colonial Charter) vested the supreme legislative power in the Belgian Parliament and the executive power in the King of the Lelgians, who also exercises legislative power by decree within the limits of the law. All royal acts must be countersigned by the Minister of Colonies, who is a member of the Belgian Cabinet and presides over the Colonial Council. The Council, which consists of 8 royal appointees and 6 members designated by Parliament, discusses matters submitted by the King and is consulted on pending decrees.

18. In the Congo, the King is represented by the Governor General to whom he delegates executive power. The Governor General is the head of the Adminis- tration staffed with 8,000 Europeans. Directly responsible to him are the Governors of the six provinces: Leopoldville, Equateur, Orientale, Kivu, Katang, In carry- and Kasai, which are further divided into districts and territories. by ing out their duties, the Governor General and the Governors are assisted advisory councils consisting of officials and non-official European and African members.

19. The Congo budget is voted annually by Parliament and the Congo can assets borrow in its own name with parliamentary authority. The separation of The between Belgium and the Congo is provided for in the Colonial Charter. Congo has a separate currency unit, the Congo franc, which is at par with the Imports from Belgian franc, and separate gold and foreign exchange reserves. Belgium are - by virtue of international agreements - treated in the same way du as imports from other countries. The Banque Centrale du Congo Belge et Ruanda-Urundi is in charge of monetary and credit management, and exercises foreign exchange and banking control. 20. Responsibility for providing basic utilities is entrusted to several public organizations with headquarters in Brussels. The Office d'Exploitation des Transports Coloniaux (Otraco) operates the port of Matadi, the Matadi- Leopoldville railroad and the water transport between Leopoldville, Stanleyville and Port Francqui. The two Societes des Forces Hydroelectriques are responsible for hydroelectric development, and the Regie de Distribution d'Eau et de 1'Elec- tricite (Regideso) for water and electricity supply. The Office des Cites Africaines (OCA) builds housing settlements for Africans. Finally, the Institut National pour l'Etude Agronomique (Ineac) engages in agricultural research.

PAST DEVELOPMENT RECORD

The First Forty Years

21. The Congo of the 1880's was one of the most isolated and primitive areas in the world. The population, decimated by tribal warfare and tropical diseases, eked out a bare subsistence from the land. Apart from a few European trading posts at the mouth of the Congo River and Arab slave traders in the east, the country had no contact with the outside world.

22. By 1898, when the Matadi-Leopoldville railroad opened up the interior to trade, exports of ivory, rubber and oil palm products had begun and mineral e7rploration was under way. Early in this century, mining concessions were grante to several corporations and European plantations set up. CFL by-passed the rapid above Stanleyville a-ad the railroad, advancing from the south, reached Elisabeth- ville. Rhodesian coal and coke were brought in and the first copper smelter started producing in 1911. Africans began to collect palm nuts and copal, and merchants bought them against imported goods.

23. World War I brought a sudden spurt in mining operations; new mines were opened up and copper output rose sharply to 27,000 tons in 1917. Production of rubber and certain food crops was stepped up by the institution of compulsory delivery and cultivation. The African labor force exceeded 50,000. In 1918 BCK completed the railroad from Elisabethville to Bukama on the Lualaba, thus linkint up with the CFL system.

The 'Twenties

24. Rapid progress ensued after a period of readjustment. The flow of private capital from Belgium assumed considerable proportions and the rate of investment was stepped up throughout the economy. The length of the railroad network more than doubled. The Societe des Chemins de Fer Vicinaux built the the Oriental. 500-mile long Vicicongo railroad to evacuate agricultural produce of province through the port of Aketi. BCK laid 1,000 miles of track linking Bukair and Port Francqui and branching out west to Dilolo where it met the newly built Benguela Railway. -6-

25. New plantations were developed along lines of communication and Robusta coffee was introduced. European settlers began to raise cattle in the highlands. The Administration promoted the cultivation of cotton by Africans and, gradually, the money economy penetrated into the tribal milieu. Work in the diamond fields started on a large scale and several tin mines came into production. The mining of coal began in the Luena field. Union Miniere opened up new mines near Elisabethville and Kolwezi, and by 1929 ouput of copper had risen to 140,000 tons. Concentrators, an electrolysis plant and a sulphuric acid factory were erected at Jadotville.

26 African employment increased from 100,000 to 420,000 and the European population from 7,000 to 25,000. Responding to internal demand, some industrial development took place. Cement works, flour mills, a cotton mill and a sugar refinery were established in the Katanga and near Leopoldville. The first hydroelectric plants were built by cement producers and mining companies.

27. With the rapid expansion and diversification of production, gross national product increased between 1920 and 1930 from frs. 8 billion to frs. 16.8 billion and exports from frs. 1.8 billion to frs. 7 billion (in terms of 1950 prices). In 1930, five times as many goods were shipped by rail and water as in 1920. Private and public consumption rose by over 50%. Bank deposits expanded considerably, despite the fact that short-term funds were as a rule invested in liquid assets in Brussels.

The Setback

28. The depression brought the young economy practically to a standstill. Mines and plants closed down and thousands of African workers went back to the bush. About one-third of the European men returned home. Exports declined by 30% and imports by 60%. Subsidies from the Belgian Government were needed to meet current commitments of the Administration.

29. When the tide turned in the middle ?thirties, the advance was halting. Although production, employment and exports soon surpassed previous peak levels, investment and imports were slow to recover. The Administration initiated some public works, and by establishing Ineac and organizing extension services tried to improve farming techniques and living conditions in rural areas.

World War II and the Aftermath

30. War again provided a stimulus. Old mines were opened up again and all facilities were stretched to the maximum. Output of tin, rubber and pyrethrum was pushed to replace Far Eastern supplies. Between 1940 and 1944, copper deliveries reached 800,000 tons, ten times the World War I total. New factor- ies were built to process local commodities for export and domestic consumption, and employment climbed to 700,000. The population of Elisabethville, Jadotville and Kolwezi increased fivefold and that of Leopoldville threefold.

31. Financially, the war ushered in another era, for the Congo had to rely on its own resources. The influx of Belgian long-term capital stopped and short-term funds could no longer be transferred to Brussels. A foreign exchange control system was instituted to ensure the repatriation of export earnings. The expansion of productive capacity was financed out of retained profits and the Treasury was building up surpluses due to high receipts from export duties and the income tax. 32. Business activity continued unabated after the end of hostilities. The airplane brought the outside world closer and distances shrank in the interior. Foreign trade boomed. The labor force went on growing. More Europeans arrived and, for the first time, many women and children. The gross national product rose by 30% between 1945,and 1949. Efforts were made to modernize production facilities and investment in plant, plantations, power and European housing by far exceeded the levels of the late 'twenties. Self-financing continued to be the vehicle of business expansion.

33. When the war was over, the Administration passed through a period of stock taking. Three problems required solution. First, the internal market had to be developed to lessen the economy's dependence on foreign demand for raw materials. Second, the gap between African and European incomes had to be narrowed and native living conditions improved, particularly in the over- crowded and squalid cities. Third, public utilities - primarily transport - had to be modernized and expanded to meet the growing needs of the business community.

34. These aims were tc be achieved !iainly through public investment. The Ten Year Plan for the Economic and Social Development of the Belgian Congo, drawn up in the late 'forties, provided the framework for the investment to be undertaken by tthe Administration and various public organizations in the years 1950-1959. The cost of the productive and welfare projects included in the Plan was estimated at frs. 25.5 billion (Table 11). It was thought that private investment would reach a corresponding total during the life of the Plan. - 8 -

THE CONGO UNDER THE TEN YEAR PLAN

Investment

35. Business was a little slower in 1949 and the time looked most propitious for launching public investment projects. However, the Plan took time to prepare and its execution had just started when the war in Korea brought about a spurt of business activity. The Administration found itself in competition for men and materials with mines and plantations trying to satisfy the booming external demand for Congo commodities. Shortages of labor appeared throughout the economy, construction materials were scarce and transport facilities congested.

36. In these circumstances, private projects took precedence over public ones. Gross private investment in fixed assets rose to peak levels, totalling frs. 55 billion ($1.1 billion)in the seven years 1950-56 (Table 4). Congo corporations were responsible for about two-thirds of the total,

37, Union Miniere alone invested more than frs. 10 billion in mines, industrial plants, hydroelectric installations, housing and welfare facilities. BCK electrified the Elisabethville-Kolwezi line, while Vicicongo subst:tuted diesels for wood-burning locomotives and built up a fleet of heavy trucks. "Socopetrol", grouping the four oil companies in the Congo, spent large sums on the construction of oil storage and transport facilities. In agriculture, about 153,000 hectares of new plantations were started at a cost estimated at frs. 10,000 per hectare.

36. Investment under the Plan was slow at first. Because of the rise in prices, cost estimates had to be raised already in 1951. Subsequently, changes were made in the road program and various other programs. In 195L, the revisio of the Plan mas completed and its total cost put at frs. 48.1 billion ($962 million).

39. In the same year, expenditure reached the rate of frs. 6 billion ($120 million) per annum and this rate was maintained in the next two years. By the end of 1956, over frs. 29 billion had been spent on the Plan (Table 11). About 45% of the total went to transport and telecommunications; power development, and water and electricity distribution systems absorbed 12%. Agriculture claimed 7% and welfare 17%. The rest was invested in buildings and houses for the Administration. In addition to projects included in the Plan, the Govern- ment invested frs. 7.5 billion in participations and military construction during the period 1950-56.

4o. Investment in transport had priority. The transport system had changed little between 1930 and 1950. Innumerable trans-shipments caused delays; for instance, goods took two months from Leopoldville to Bukavu. Navigation on the Lualaba was often interrupted during the dry season and some roads became im- passable during the rains. In 1951 transport facilities at Matadi and Leopold- ville could no longer handle the growing traffic and imports had to be restricte With the help of the Administration, Otraco expanded and re-equipped the ports. The Matadi-Leopoldville railroad was converted to diesel traction and centralized traffic control introduced. The installation of "Scotch-lite" markings made possible round-the-clock navigation on the Congo and Kasai Rivers; with modern equipment, travel time between Leopoldville and Stanleyville was cut in half, - 9 -

4l. A new railroad was built between Kamina and Kabalo by the Administration together with BCK. Inaugurated in 1956, it linked the BCK and CFL networks, shortened transport time from Leopoldville to Bukavu to thirty days, saving on trans-shipments and eliminating the vicissitudes of navigation on the Upper Lualaba. At the same time, the Belgian base at the port of Dar es Salaam was expanded and modernized. By 1954, the road program got under way. A start was made on new roads from Matadi to Leopoldville, from Elisabethville to Kolwezi and from Stanleyville to Bukavu. The Administration also invested in air transport facilities. The largest airfield in Africa was built at Leopoldville, the international airports at Elisabethville and Stanleyville were expanded and a number of airstrips brought small localities in touch with the world outside.

42. Except for transport and agriculture, most of the public investment took place in urban areas. Near Leopoldville and at Stanleyville, the Societes des Forces developed hydroelectric power. In these and other cities, OCA constructed thousands of houses which Regideso now supplies with water and will soon supply with electricity. Many schools and hospitals were built and streets paved. Finally, scattered government offices were centralized in larger buildings and homes provided for European and African personnel.

Financing

43. Throughout the seven years, the Congo experienced no difficulty in securing more than frs. 90 billion ($1.8 billion) for private and public in-est- meLt. In the private sector, most of the money came from retained profits and depreciation allowances; the inflow of private long-term capital was substantial but was largely offset by the transfer of long-term funds outside the country. Self-financing was facilitated by high export earnings due to strong foreign demand for Congo commodities and by the fact that until 1953 dividends of most corporations did not exceed 50-55% of net profits.

44. Public investment was financed by budget surpluses and by internal and external borrowing. About 60% of the frs. 37 billion ($740 million) spent by the Government and the public organizations was covered within the Congo. Boom- ing foreign trade and high corporate profits were reflected in high Government revenue which consists largely of export and import duties, income tax and dividends on the Government's own share holdings (Table 9). Despite the rapid rise in ordinary expenditure, particularly on debt service and education, ordinary budget surpluses in the past seven years amounted to about frs. 10 billion, ex- cluding sums appropriated to the Budget Equalization Fund, a reserve for future ordinary budget deficits (Table 10).

45. With frs. 10 billion available from budget surpluses, the Government had to provide frs. 27 billion by borrowing (Table 12). This was done in the follow. ing way: billions of francs

Internal market - short-term 5.4 - long-term 7.6 Belgian market - long-term 8.5 Swiss market - long-term 2.7 International Bank 3.5 U.S. Government (M1SA) 0.8 28.5 - 10 -

Local funds came mostly from commercial banks, pension funds and the Savings Bank.

46. Despite the heavy Government investment, the Treasury position remained strong. Government balances reached a peak of frs. 11.6 billion in 1952, went down to frs. 8.2 billion in 1953 and subsequently moved between frs. 9 billion and frs. 11 billion until the end of 1956.

47. Since the passing of the Korean boom, prices have been stable. Follow- ing the trend of economic activity, the money supply rose from frs. 18.5 billion in 1952 to frs. 22.2 billion in 1955 and has since remained at around that level (Table 13).

Agriculture

48. African farm production has been expanding at a rate somewhat greater than the 1.3% rate of growth of the tribal population. On the other hand, production of agricultural and tree crops by Europeans has been increasing steadily at an annual rate of 11%. Most of the increase has been the result of the expansion in acreage although the use of fertilizer and better cultivation practice have also improved yields. Improvement in production from the use of better varieties currently available will not have an appreciable effect until the new plantations developed in recent years come into full production. Higher costs due to rising wages have been offset to a considerable extent by the introduction of mechanization, particularly in plantation establishment and maintenance, and by improvements in organization and transport.

49. Government investment in agriculture has been aimed at determining what can be done rather than at increasing output. Research and adaptation centers and soil conservation have absorbed a substantial part of the funds spent on agri culture under the Plan. The second line of advance has been the development of the paysannat, a new form of organization for African agriculture which ration- alizes the traditional system of shifting cultivation by providing a basis for a more permanent (i.e. locationally fixed) system of rotation and fallows which wil permit the introduction of new techniques, comprising new seed varieties, the usc of fertilizer, better cultivation practices and the mechanization of land prepa- ration. Nearly 200,000 heads of families, about 10% of all heads of families in the tribal environment, have now been organized in paysannats. The mere reorganization of producers into paysannats, however, without the accompanying introduction of new techniques, does not contribute much to increased productivi' Unfortunately, it has not been possible to do this on a large scale because the basic research has not been completed, adequate resources were not available and there has not been a sufficient number of trained African extension workers to supervise.

Mining

50. Under the impulse of strong demand mineral production has expanded by onc half since 1950 (Table 6). Copper output rose from 175,000 tons to 250,000 tons and that of industripl diamonds from 9.6 million carats to 13.3 million carats. Cobalt, zinc and coal also made great progress. The opening of the Kisenge mine in 1951 brought about a spectacular rise in manganese production and in the past few years new minerals, like cadmium and germanium, have been recovered as - .1 -

by-products of zinc. Only tin and gold were left behind; low prices and high costs forced some small producers to suspend operations. 51. The value of mineral exports increased from frs. 6.7 billion to frs.17.8 billion, due to higher output and a 50% rise in prices. In 1956, the mining companies were responsible for roughly two-thirds of all Congo exports and three- quarters of Government revenue from export duties. Copper alone brought in about frs. 11 billion in export earnings and frs. 1.6 billion in duty.

52. In order to nechanize operations and push the processing of cres on the spot, the large producers invested heavily in hydroelectric installations. In the Baut-Katanga the 108,000 k;. Delconmune plant was completed in 1954 and the 248,000 kw. LeMarinel plant, equal to the largest in Europe, inaugurated in 1956. These brought the installed capacity of Union Miniere to 470,000 kw. (i.e. about 80% of the Congo total) and have made possible the delivery of 500 million kwh per annum to the Federation of Rhodesia and Nyasaland. New power plants were also built in the diamond and gold fields and in the tin mines.

53, As a result, a large part of the minerals are now exported from the Congo in a more highly procesced form than in the late 'forties. Well over one- half of Congo copper is sold as electrolytic copper, shipments of granulated cobalt have been added to those of cobalt alloy and, since 1953, zinc exports have been in form of metal as well as of concentrates.

K4. The production cost of Katanga copper is among the lowest in the world; the same is true of industrial diamonds and manganese. In fact, all concentrated mineral deposits worked with mechanical means by well organized and permanently staffed companies show reasonable production costs. The recent upward trend in African wages has not greatly affected the main producers. The wage bill of Union Miniere represents a comparatively modest part of total production cost, compared with transport, power and materials. The same is true of Kilo-Moto. For the large mechanized tin mines the wage bill averages 3Q% of total production cost; it is, however, twice as high for the smaller tin mines and these are the ones caught between the wage-price scissors.

Industr

5. Industry, though still modest, showed far more rapid progress than agriculture and mining. Industrial production increased 2- times between 1950 and 1956, due to high levels of economic activity and rising consumption. Output of cement nearly tripled to reach 460,0CO tons, output of cotton fabrics rose at a similar rate to 58 million square meters, while beer production increased almost tenfold to 3.2 million hectoliters (Table 7). Manufacturing and building now em- ploy 280,000 workers or one-quarter of the labor force and are in a large measure responsible for the growth of Leopoldville and other urban centers. Although most of the output still comes from European enterprises, the number of small African fins has grown much faster in the past few years.

56. Exports of industrial goods are, at frs. 300 million, still insignifi- cant but value added through processing of agricultural and mineral products has had some influence on the rapid growth of export earnings from these product. In fact, the most natural field for industry in the Congo is still the processinf of export commodities, - 12 -

and packing materi- 57. Next in importance are industries producing building distant supply sourcer als, where the important factor is the transport cost from Consumers' Bricks, cement, metal drums, and bottles fall into this category. industries using local or imported materials, and the building trades, goods for cottor off the picture. Textile mills cover about 55% of domestic need round brewec fabrics, Soap production is adequate for internal consumption and locally beer satisfies practically all domestic needs. Sugar from the old refinery in be the Bas-Congo supplies more than half of home demand; the rest should soon covered by the refinery being built in the Ruzizi Valley. As to the building trades, their capacity has probably been over-extended in the early 'fifties* firms are 80% industrial production and over 50% of industrial 58. About of where one concentrated in the Leopoldville and Katanga provinces. Leopoldville, of the Societes des Forces has had to provide additional supplies of hydroelectric power to satisfy the rapidly growing industrial demand, is the largest situ- manufacturing center. Ore processing and the heavy chemical industry are ated in the Katanga. rapid, The number of com- 59. The growth of commerce has also been fairly mercial establishments increased substantially and employment went up from 62,000 to 80,000. In certain regions retail trade is gradually passing into African hands. The larger European merchants are often promoting this movement establish by taking on African head-clerks as partners or encouraging them to themselves on their own. gross national 60. As a rosult of progress in all economic pursuits, the product increased by h3% in real terms between 1950 and 1955. Its growth, spectacular in 1951 and 1952, slowed down in the following three years. The which average rate of 7,5%, however, greatly exceeded the V%-5% annual rate at the Congo economy has apparently progressed in the past 35 years.

Productivity expansion 61. The 43% rise in national product was achieved with only a 20% in the labor force (Table 2). Despite the growth in output, employment in mining declined from 114,000 in 1950 to 105,000 in 1956; Kilo-Moto, for instance has maintained its production level with 0o% less workers. In industry, the largest textile mill, Utexleo, and the Chanic shipyard, both at Leopoldville, the have reduced their labor force while increasing output. The productivity of he African worker has thus improved considerably. Whereas in the late 'forties would do - with the same tools - about 25% of the work of his European counterpart, the ratio is now 35%-40%.

62. For the period 1950-54, average improvement in productivity in mining, industry and agriculture was estimated at around a third. It was achieved by primarily by mechanization but also, particularly in plantation agriculture, more efficient organization of operations. Everywhere, however, closer super- vision by European personnel proved necessary to raise output per head. in 63. The drive for better productivity resulted in part from the rise labor costs. The legal minimum wage has more than doubled since 1950 (Table 13). in It is now, for instace, frs. 54 per day for a married man with two children - 13 -

Leopoldville and frs. 18 for a single man in Port Francqui, As a rule, actual wages appear to be well above the legal minimum, Furthermore, since 1954, the workers are entitled to a week's paid holiday and since 1956 to a pension on retirement. Clerical salaries are, of course, much higher than the wages of manual workers and a bank employee in Leopoldville may get a monthly salary of frs. 10,000.

The Test of the Ten Year Plan

64. At the end of 1956 public services were no longer a bottleneck hamper- ing the progress of the economy. The capacity of the ports and railroad at and between Matadi and Leopolidville was adequate for the record volume of exports and imports. The port of Matadi handled smoothly about 75% more goods than in 1950 and the Matadi-Leopoldville railroad transported twice as much freight as seven years before. Otracots river fleet carried 1.6 million tons of cargo instead of 900,000 tmns, reaching its destinations much more rapidly (Table 8). Most of the traffic between Albertville and Elisabethville moved on the Kamina- Kabalo railroad, taking 3-4 days instead of three weeks and avoiding losses through trans-shipments. The airports took more and larger planes, and much work had been done on the roads, which carried many more vehicles than in 1950.

65. African wage and salary earners now represent nearly 40% of all men of working age. The ratio is 50% in the Leopoldville province, the Katanga and the Kivu. The steady rise in their total wage bill from frs. 5.2 billion to frs. 11.9 billion, accompanied by a slower rise in earnings from farming and business, raised the share of the African population in the national income from 46% in 1950 to 53% in 1955 (Table 3). Although African incomes, averaging frs. 2,000 in 1955, are still very low, an increase by about 50% in real income per head within six years is encouraging.

66. Living conditions in the cities have improved very considerably. The work accomplished by OCA in leopoldville, Stanleyville and Bukavu is impressive0 Modern schools, recreational facilities and shops are available to the population and Leopoldville now has a municipal transport system. More streets are paved, water and electricity distribution by Regidesm is spreading in urban areas and sanitary conditions are incomparably better than they were in 1950.

67. At the same time, the Congo's dependence on foreign trade has not di- minished. While exports have risen a little slower than the gross national product, imports have risen faster. Not only did the investment effort and the productive activity call for more equipment, materials and fuels from abroad; rising consumption and living standards bre.ught larger imports of food, clothing and household goods. Although local consumers' goods industries expanded much faster than the population, the growing and more exacting demand of urbanized Africans could no longer be satisfied at home. This by no means contradicts the fact that the economy has grown stronger. In many instances internal production has been substituted for imports and a few new items have been added to the extensive list of export commodities. If need be, imports could be reduced below present record levels without endangering the economy.

68. Inevitably, there were a few wrong investment decisions. The hydroelectric plant built at Stanleyville by one of the Societes des Forces at the - 14 - cost of frs. 630 million can generate 12,400 kw,, but two years after it started power demand in the area was only 2,700 kw.; the two hydroelectric plants under construction near Bukavu and Albertville may have a similar experience. Diffi- culties, which might have been avoided, were encountered with soil conditions at the Stanleyville airport. Also, in spite of local pressures on the responsible officials, some of the new public buildings at Leopoldville, Luluabourg and Bukavu could have been more modest.

FRESENT POSITION AND OUTLOOK

Prospects for Economic Progress

69. At the present rate of growth the population would double in 30 years. The supply of manpower should be adequate for future requirements even at a high level of economic activity. In the long run, the problem could even arise of sufficient employment opportunities, particularly in view of the gradual replacement of men by women as domestics, typists and sales personnel.

70. Prospects for agriculture are mixed but generally favorable. World markets should be able in future to absorb larger quantities of the commodities which the Congo produces but probably not on as favorable terms as in the past. The domestic urban population will continue to grow at a rate which will reouilre larger and larger quantities of basic foodstuffs, and rising incomes will create a greater demand for vegetables, fruit, dairy and poultry products, meat and fish,

71. The Eurcpean plantation economy continues to expand. Given the acreage already planted but not yet in bearing, output of tree crops should expand by about 50% in the next five or six years. The increase will be largely in oil palm products and Robusta coffee but increases in rubber, cocoa and tea are also expected. Moreover, the expansion should be accompanied by increased efficiency from recently developed high-yielding varieties and lower operating and transport costs.

72. African producers should also be in a position to take aavantage of expanding markets. Although small, African acreage under tree crops is expanding probably at a rate greater than on the European plantations and should continue to increase if planned government programs are implemented.

73. The paysannat system should eventually make a great impact on African agriculture but its benefits will be evident only gradually and will come in the main after 1960 when the Plan expires. By that time the stage should be set for large scale application of research results in new varieties and techniques in the paysannats which will have been established. In the Bas-Congo, for example, a pilot plant operation including 760 producers at three centers has established the feasibility of the use of fertilizer with improved seeds and mechanization under a modified form of the paysannat system. It is now planned to expand these pilot operations to include 10,000 producers with the prospect of doubling net incomes.

7L. Such improvements, however, depend on three conditions: first, a sharp increase in government investment in agriculture (part of which should be - 15 -

recouped out of increased productivity by charges for services); second, the recruitment and training of a larger number of Africans than have been willing to enroll for such training in the past; and third, active participation of African producers in the paysannat program. Inability to meet these conditions would undoubtedly slow down the pace of development, but steady progress should ensue.

75. In view of the present prices for Congo minerals, the largest mining companies are concentrating on full utilization of their capacity and mineral output is, on the whole, not expected to change appreciably in the next year. Nevertheless, certain expansion programs are under way which indicate how mineral production could evolve around 1960. Mining and power installations are being expanded and washing equipment modernized in order to raise the output of industrial diamonds from 13.3 to 15 million carats in the next two years. At the Kisenge manganese mine a new washing plant will soon make possible the treatment of poor ores and thus increase production. Near Jadotville, the old Kambove mine is being made ready for underground operation and at Kolwezi the open cast mines are being expanded, an electrolysis plant for copper and cobalt is under construction and the capacity of the zinc refinery is being increased. After the completion of these installations, Union Miniere could raise its output by 1960 to 300,000 tons of copper, 12,000 tons of cobalt metal and 160,000 tons rf contained zinc, i.e, by 20%, 33% and 50% respectively over 1956. Given favorable demand, production in the Haut-Katanga would continue to grow in the 'sixties. On the other hand, no increase in output is at present planned for tin, gold -nd ge-n diamoiids.

76. Industrial development in the next 5-10 years will probably be along existing lines. If farm production and productivity increase consistently, the agricultural processing industries will expand in step and simultaneously rural demand for manufactured consumers' goods will grow. New industries are less promising. The internal market is still too narrow to offer the advantages of large-scale production and no industry requiring skilled and efficient manpower could compete with imports. An exception must obviously be made for industries for which bulk supplies of very cheap power might provide an overwhelming induce- ment.

Future Investment

77. Investment by Congo corporations slowed down in 1956 nd 1957 partly because certain expansion programs were completed and partly because of the decline in certain mineral prices. Capital expenditure by the mining companies will be lower in the next two or three years than it was in the middle 'fifties. Private transport and power facilities seem commensurate with normal requirements. With the saturation of European demand for housing, residential construction has fallen sharply and unemployment has appeared in the building trades. Only in plantation agriculture capital expenditure runs high and might remain so for a time.

78. In these circumstances, the private sector should not exercise any pressure on resources. The field is thus open for public investment and no - 16 - physical obstacles exist which would -low it down. However, financing difficulties have intewened and the rate of public investment is tending to decline as well.

79. The position of the Treasury deteriorated rapidly in 1957. The three main sources of funds hitherto used to finance the Plan dried up at the same time. First, the ordinary budget surplus, which had shrunk in 1956 because of the growth of expenditure, disappeared in 1957. Second, credit tightened in the Congo because of the greater need for financial accommodation by business (Table 13). In the first seven months of 1957 the commercial banks borrowed frs. 1 billion from the Banque Centrale, which, on July 31, raised its discount rate from 3.5% to 4%. They also presented frs. 500 million of Treasury bills for redemption; to protect the Treasury, the Banque Centrale instituted a supplementary credit line to be drawn on by the Government in the event of heavy claims for repayment of short-term debt. Third, the Congo was unable to obtain access to the Brussels market because of limited supply of funds and urgent requirements of Belgian public organizations.

80. As of March 31, 1957, frs. 18 billion ($360 million) remained to be invested under the Plan. Of this, about frs. 4 billion was to be spent on roads and a comparable amount on water and rail transport and airports. Hydroelectric power would absorb about frs. 1.5 billion, agriculture frs. 1 billion and housing public health, education and administrative construction about frs. 7 billion.

81. Even assuming that the financial markets return to easier conditions before too long, prospects for raising frs. 18 billion for public investment before 1960 are not good, Ordinary budget revenue will no longer be available for extraordinary expenditure. Internally, the Congo can count only on frs. 1 billion per annum from institutional investors, primarily the pension funds. Allocations from the proposed European Economic Community's Overseas Development Fund would not be large in 1958 and 1959. In Brussels, the Congo should be able to obtain up to frs. 2 billion per annum. Beyond this, funds will have to be secured outside the Belgian monetary area.

82. A reduction in investment and the extension of the Plan into the early 'sixties appear inevitable. Since certain public facilities are by now commensurate with the immediate needs of the economy, some reduction would make economic sense. The main problem is how to avoid cutting the most essential programs and to eliminate projects of lesser priority. It is not certain that this will be done. For instance, a more realistic assessment of financing possibilities might have prompted the Government to postpone the construction of the two hydroelectric plants near Bukavu and Albertville which will now have to be completed at the substantial cost of frs. 1.2 billion.

83. Notwithstanding the present financing difficulties, the Administration is preparing a development program for the next decade. Its aim will be to develop production and productivity in tribal areas, making full use of the transport network presently under construction. Secondary roads, branching out from the completed primary roads, would facilitate the marketing of more cash crops and foodstuffs. African farming and animal husbandry would be improved more rapidly due to the preparatory work accomplished in the 'fifties. Better equilibrium would be established between rural and urban standards of living and the appeal of city lights dimmed by more opportunities in the interior. - 17 -

84. With financing possibilities in mind, the Ministry of Colonies tentative- ly put the cost of the 1960-69 program at about frs. 30 billion ($600 million), i.e. frs. 3 billion per annum. Precise information on the proposed composition of investment is not yet available. Apparently about two-thirds of the total would be devoted to agriculture and transport. The rest would benefit mainly the social services, with housing and education high on the list.

85. Separate from the ten-year programs is the enormous Inga scheme. Inga is the name of a site on the lower Congo River about 25 miles north of Matadi and 80 miles from the Atlantic coast, where about 25 million kw. could be installed.This would be ten times the capacity of the Grand Coulee installations, the largest in the world. The cost of the scheme has been very roughly estimated at $3.5 billion. It would have to be executed in stages over a long time. Fully developed, Inga would supply extremely cheap power; but even an initial installation of 1.0-1.5 million kw. would apparently produce at very low cost.

86. Since power demand in the area is limited, Inga could be carried out only if industries consuming large quantities of electricity were set up at the mouth of the Congo River. The most likely prospect is aluminum for which bauxite could be imported by sea from West Africa or the dest Indies. Other possibilities are cellulose and fertilizer production, and uranium-enrichment plants. It remains to be seen, however, whether the demand of industries such as these would abscrb the capacity of the proposed initial stage.

87. Irrespective of the present decline in investment, the continued growth of the economy appeers fairly certain. In the next few years its rate will presumably be slower than the 7fo annual rate between 1946 and 1955 and perhaps more comparable to the h%-5% annual average for the period 1920-1955. But the rate of progress is likely to be discontinuous, as it has been in the past. A boom in base metals, for instance, might again bring rates of growth comparable to those achieved in the early 'fifties.

Political Development

88. Neither Africans nor Europeans have a vote in the Congo and no popular representation exists. However, for some time, machinery has existed by which the Administration obtains the advice of individual Europeans and Africans. Early this year, this machinery underwent important changes.

89. The advisory councils attached to the Governor General and the Governors of the six provinces were reformed and the African representation was greatly increased and diversified. Each Provincial Council now consists of Administration officials and of 36 unofficial members, appointed by the Governor without regard to their race. Six of the unofficial members are prominent individuals; 12 represent rural and urban communities; and three groups of 6 each are appointed from lists submitted respectively by corporate interests, small business organizations and associations of wage and salary earners. Dependent on the province, 9 to 17 of the members appointed for the first three-year term are Africans and it is expected that in the future the number will be gradually increased. - 18 -

90. The reformed Government Council has S4 unofficial members who represent the same spheres of interest. They are no longer appointed by the Governor General; two-thirds are elected by the Provincial Councils and one-third appointed by the Governors. This ensures a better geographic representation and is in line with the recent administrative decentralization which affords a larger measure of independence to the Governors.

the inhabitants 91. At the same time, further measures were taken to prepare for local government and to bring together local African and European interests. First, advisory councils were established in the territories. Secondly, chief- dom councils, hitherto composed of notables designated by custom, were enlarged to comprise non-customary members. Thirdly, a new statute gave the cities more autonomy.

by 92. Before these measures were enacted, a Leopoldville journal published a group of educated Africans printed in the summer of 1956 a political manifesto. Giving all credit to Belgium for its accomplishments in the Congo, the manifesto and expressed the conviction that the Congo could become a nation in 30 years achieve independence at the same time. This should be done by gradually making the existing institutions more representative and giving them real powe2 of decision and control. The manifesto further demanded improvement in the economic position of Africans.

has been to 93. To date, the most significant repercussion of the manifesto bring about pressu'- for better pay for salary earners, who represent the :majority of the intellectually and materially more advanced Africans. When Social- ist, Catholic and Liberal trade unions were formed in the Congo this year under the auspices of the Belgian political parties, they at once seized the oppor- tunity to demand higher salaries. Since the summer, representatives of the trade unions and the older associations of African and European Administration personnel have been negotiating with the Government for a new salary structure of the Administration.

by the 94. No widespread political feeling seems to have been engendered manifesto. At present there is no apparent animosity between Africans and Europeans. The reasons for this are several. The main one is the numerical relationship; a second - the absence of "poor whites" who would feel personally endangered by African material progress; a third - the limited area of land owned by individual Europeans and the protection of tribal rights to land by the Administration.

gradually 95. The Belgians state that their policy is to give the Africans increasing political responsibility, as they show themselves able to discharge not it. The authorities have repeatedly declared that economic development is an end in itself and that the people, white and black alike, should participate in the government of the country in accordance with their merit and capacity. it is Until now, the Congo has been governed with remarkable realism. Although will evolve impossible to predict how relations between Africans and Europeans political in the future, there is at present no reason to believe that the development would interfere with the economic progress of the country. - 19 -

Financial Position and Prospects

96. In 1957, the ordinary budget will probably be balanced at the level of about frs. 11 billion (Tables 9 and 10). Because of the fall in certain non- ferrous metal prices and the consequent reduction in rates of export duty on copper and cobalt, receipts from export duties were at the end of July running 12% below estimates. This loss in revenue, however, has been partly made up by higher receipts from duties on the growing imports. The other two main items of Government revenue, namely income tax and dividends from participations, will presumably match the estimates as they are based on 1956 incomes and profits.

97. In the long-run, the Congo should be in a position to maintain ordinary budget balance at a rising level of receipts and expenditure. Prospects for the growth of output in the European sector are favorable, African farm production should expand more rapidly under the impact of the investment effort made, and to be made, in agriculture by the Government and productivity will feel the effect of heavy investment under the Plan in health services, housing and education. These developments should be reflected in larger revenue from direct taxation and, through rising consumption, in larger revenue from indirect taxes.

98. Ordinary expenditure will continue to grow if development continues. Its growth from frs. 4.3 billion in 1950 to an estimated frs. 11.3 billion in 1957 was attributable to three main causes. First, the European personnel of the Administration doubled from about 4,000 to about 8,000 and African personne" h,:s also increased. Second, the cost of maintaining and operating publi,c faciliies built under the Plan has added to ordinary expenditure. Third, the service on debt incurred to finance the Plan rose from frs. 0.2 billion to frs. 1.7 billion or 15% of total expenditure. INhile in future the gradual replacement of European, by Africans in some professional positions in the Administration will bring saving, well remunerated lay personnel will probably have to be recruited for some positions now held by missionaries whose work in the Congo is being done for other than material compensation. Public facilities to be built in the late 'fifties and in the 'sixties will mean an additional recurrent burden and debt service will increase dependent, of course, on the rate of public investment and the terms of the loans.

99. There will be times, however, when weaker world demand for some Congo commodities will affect Government revenue, very sensitive by nature to fluctu- ations in exports and corporate profits. It could even be that 1958 may provide an example. If prices of copper, cobalt and zinc remain at their present levels for a year or so, Government receipts from the production and exports of these minerals might fall by about frs. 1.5 billion.

100. The Administration should be able to deal with such temporary situations. There is, first of all, room for checking ordinary expenditure. Recruitment of personnel could be suspended and urgent needs in the interior satisfied by shifting officials from the large centers. Public investment could be reduced and spread out. Non-essential expenditure could be cut. Measures to raise revenue might be less effective at a time when the tax base itself is shrinking. Never- theless, the present tax burden is fairly moderate and it should be possible to increase certain taxes, particularly those with no direct incidence on business investment. To tide the Treasury over until fiscal measures restore the balance, - 20 - the Administration could draw on its Budget Equalization Fund amounting to frs.8.1 billion.

101. The Congo exports a large number of mineral and agricultural commodities essential to the outside world (Table 14). In the past ten years, its export earnings have grown rapidly to reach a peak of $612 million equivalent in 1956. Mineral reserves are large and good possibilities exist for expanding agricultural output. Production costs are moderate and should enable the country to compete effectively in the world market. Although copper accounts for between one- third and two-fifths of exports, several other minerals are also important and agricultural commodities represent about 35% of the total.

102. The establishment of the proposed European Economic Community should improve the position of certain Congo commodities in Western Europe by giving preferential treatment to some tropical agricultural products. By the same token, however, timber may suffer from competition of the French Overseas Terri- tories.

103. Imports into the Congo consist of consumers' goods, materials, fuels and equipment (Table 1$). Their growth has been rapid and in 1956 the import bill was equivalent to $372 million. Although industrial production has expanded greatly, imports of consumers' goods, particularly those for consumption by Europeans and the better-off urban Africans, have shown a strong upward tendency in recent years. Imports of materials also increase with the progr'.ss of economic activity; domestic cement may soon entirely replace foreign supplies but imports of petroleum products are expected to grow by about 10% per annum in the next few years and other goods,e.g. fertilizer, may be required in larger quantities. Equipment imports will depend directly on the rate of investment; rivercraft and some other equipment items may be assembled in the Congo but most of the machinery, rolling stock and vehicles will continue to be imported.

104. No effect on imports is expected from the establishment of the European Economic Corrmunity. By virtue of international agreements the Congo has always applied an open door policy with respect to imports and has never differentiated between goods of various origins. In consequence, no preferences on imports from Belgium exist, and the treatment of the other members of the Community would not change after it comes into being.

105. As a rule, the Congo has a foreign trade surplus. However, the large volume of trade calls for large payments on account of freight and insurance, and high corporate profits are reflected in high dividend payments to Belgian shareholders. Pensions, donations, tourism expenses and various other service payments are also important and rise in periods of high economic activity (Table 16).

106. The supply from outside of public and private capital for investment, over and above corporate profits ploughed back into business, results in a current account deficit. For rapid development the Congo will have to rely on continued inflow of long-term capital, and on continued reinvestment of profits. Belgium has in the past invested large sums of money in the Congo and there is good reason to expect that the capital stake of the mother country in the colony will continue to increase in the long run. - 21 -

107. Obviously, there will be interruptions and 1957 is an example. Because of lower mineral prices, exports in the first seven months of this year have declined by about 12% from 1956 record levels, while imports have risen further and a high deficit on invisible account has persisted. Private long-term capital inflow - as often before - has been offset by outflow, whereas public external borrowing has not been possible since the beginning of the year. Between De- cember 31, 1956 and June 30, 1957 the Banque Centrale lost $40 million of its reserves (Table 13).

108. It should be possible to remedy such temporary situations. Automatic correctives will be set in motion; investment will be reduced, as it was in 1957, lower profits will reduce dividends and lower incomes will cause a decline in imports. Until such time as these correctives or other measures become effective the reserves of the Banque Centrale, which at the end of July exceeded $150 million, should be sufficient to tide the Congo over.

109. No distinction need be made between dollar and overall creditworthiness. The Congo runs a heavy balance of payments deficit with Belgium and large surpluses with Western E,rope and North America. Since 1954, its annual overall surplus with the United States and Canada has been consistently higher than $50 million (Table 17).

110. The external long-term debt of the Congo equalled $337 million (frs.16.8 billion) on June 30, 1957 (Table 18); external short-term obligations were ir,ig- nificant, Of the total, $243 million was in Belgian francs, $62 million in Swiss francs and $32 million in dollars; in addition, the Congo services two MSA loans made to Belgium for use by the Congo of which about $16 million is outstanding. All Swiss franc debt and more than two-thirds of the Belgian franc debt give the holder the option to ask for payment of interest and principal in Congo francs at the offices of the Banque Centrale in the Colony.

111. Between 1957 and 1959, service payments on the existing external debt will be about $24.5 million per annum or about 4% of current external earnings. They are estimated at $47.7 million for 1960, because of the redemption of a Belgian franc issue, and at $25.5 million for the following year. Subsequently, they rise to $31 million in 1967 and decline to $3.4 million in 1977. All these figures make no allowance for holders requesting payment in the Congo. The greater part of the service payments is in Belgian francs; dollars and Swiss franc payments stay between $5 million and $10 million per annum in the next twenty years (Table 19). This is a modest burden. The Congo should be able to service additional dollar debt. Table 1

Belgian Congo

Growth of the African Population (in millions) Overall Within tribal organization De-tribalised total Men Women Children Total Men Women Children Total

1925 ------8. 1930 ------9.5 1938 2.6 3.0 3.8 9.4 0.4 0.3 0.2 0.9 10.3 1946 2.5 2.8 3.8 9.1 0.6 o.4 0.5 1.6 10.7 1951 2.4 2.9 3.9 9.3 0.9 0.6 0.8 2.3 11.6 1956 2.4 3.1 4.4 9.9 1.0 0.7 1.2 2.9 12.8

Growth of the European Population (in thousands)

Adminis- tration Mission- Company Men Women Children Total officials aries employees Settlers Other

1925 10.7 3M2 1.3 15.2 1.6 1.6 - - - 1930 15.7 6.6 2.9 25.2 - - - - - 1933 10.4 4.7 2.5 17.6 - - - - 1938 13.4 7.4 4.4 25.2 2.2 3.7 6.9 2.4 - 1946 17.7 9.8 7.3 34.8 3.2 4.2 9,2 3.2 - 1951 27.0 214 17.7 66.1 5.9 5.5 13.5 6.0 35.2 1954 34.0 27.3 28.0 89.3 7.7 6.3 18.0 8.0 49.3 1956 - - - 107.4 8.2 7.0 - - -

Population by Provinces (African in millions, European in thousands)

1938 1946 1951 1956 African European African European African European African European

Leopoldville 2.0 5.6 2.3 10.1 2.6 18.4 3.0 30.8 Equateur 1.6 2.0 1.6 2.0 1.6 4.1 1.7 5.9 Orientale 2.4 4.8 2.3 5.5 2.3 9.7 2.3 15.5 Kivu 1.3 2.4 1.5 3.4 1.7 8.2 2.1 12.9 Katanga 1.0 8.2 1.2 1l.4 1.3 20.4 1.6 34.1 Kasai 2.0 2.2 1.8 2.5 2.0 5.3 2.1 8.2 Total 10.3 25.2 10.7 34.8 11.6 66.1 12.8 107.4 Note: Differences due to rounding. 1/ Includes women and children. 27 Small changes in provincial boundaries have been made since 1938. Source: Ministry of Colonies, Plan Decennal, 1949; Ministry of Colonies, La la Belgique et du Situation Economique du Congo Belge; Annuaire Statistique de Congo Belge; Bulletin de la Banque Centrale du Congo Belge, December 1953. Table 2

Belgian Congo

Population in the Main Centers (in thousands)

1938 1946 1950 1956 African European African European African European African European

Leopoldville 33.7 2.2 110.2 6.1 197.7 11.0 349.0 18.0 Elisabethville 13.9 2.9 65.3 5.3 95.6 7.8 156.6 13.3 Jadotville 3.3 1.4 14.9 2.2 48.5 3.0 71.8 5.0 Stanleyville 9.6 0.7 22.3 1.2 45.9 2.4 66.2 5.0 Matadi 8.7 0.3 18.6 0.5 38.9 1.0 56.1 1.9 Kolwezi - - 11.4 0.4 15.6 1.2 48.7 4.1 Bukavu 2.1 0.3 7.7 0.9 19.7 2.5 31.0 4.6 Albertville 5.4 0.3 8.0 o.h 15.0 0.8 24.6 1.4 Coquilhatville 10.2 0.3 10.0 0.4 15.2 0.7 30.6 1.h Manono - - 18.0 0.1 26.3 0.3 27.1 0.5 Luluabourg - - 10.7 0.3 21.2 0.9 57.5 3.2

African Labor Force by Occupation (in thousands)

Agri- Manu- culture Mining facturing Commerce Transport Building Clerical Other Total

1925 ------270 1930 118 233 - 64 - - 9 - 424 8 132 399 1933 112 119 . 27 - - 528 1938 146 234 - 54 - - 8 186 1946 196 307 - 62 - - 18 146 730 195o 239 1-14 135 62 62 85 19 246 962 1951 2h 112 150 73 69 100 21 262 1,031 1952 248 105 167 72 67 116 23 280 1,078 1953 255 109 164 74 84 116 30 279 1,110 195k 265 104 167 77 84 128 30 288 l,146 1955 285 106 166 79 91 131 35 306 1,183 1956 300 105 153 81 91 124 39 322 1,197

Note: Differences due to rounding.

1/ The classification was changed in 1950; until then mining included industry.

Source: Ministry of Colonies, Plan Decennal, 1949; Ministry of Colonies, La Situation Economique du Congo Belge; Rapport Annuel sur l'Administration du Congo Belge. Table 3

Belgian Congo

National Income (in billion francs)

1950 1951 1952 1953 1954 1955

African wages and salaries 5.2 7.5 8.8 10.1 11.0 11.9 Paid by the Administration (0.6) (0.8) (1.1) ( 1.4) ( 1.7) ( 1.9) Companies (4.2) (6.2) (7.0) ( 8.0) ( 8.5) ( 9.2) Individuals (0.4) (0.5) (0.7) ( 0.7) ( 0.8) ( 0.8)

African income from farming and business 8.3 10.2 11.7 12.1 12.3 13.2 Money income (3.6) (4.6) (4.8) (4.8) (4.9) (5.6) Subsistence (4.7) (5.6) (6.9) (7.3) (7.4) (7.6) African income T3.5 17.7 20.W 22.2 23.3 27.1

European salaries 5.6 7.4 8.4 9.4 10.1 10.7 Paid by the Administration (1.7) (1.9) (2.3) (2.6) (2.7) (3.0) Companies (3.9) (5.5) (6.1) (6.9) (7.4) (7.7)

Government salaries remitted to Eelgium 0.2 0.2 0.3 0.3 0.2 0.2

Income from property 2.3 2.2 3.4 3.7 4.6 5.0 Individuals (0.7) (0.7) (0.9) (1.1) (1.1) (1.2) Administration (net) (0.3) (0.2) (0.3) (0.5) (1.1) (0.6) Dividends remitted overseas (1.3) (1.3) (2.2) (2.1) (2.4) (3.2)

European settlerst income 1.9 2.5 2.5 2.0 2.2 2.6

Corporate savings 6.0 8.2 7.5 5.2 4.6 5.0 Dividends pending distribution (1.2) (1.5) (0.3) (0.4) (0.4) (1.2) Other (4.8) (6.8) (7.2) (4.8) (4.2) (3.7)

Corporate taxes 1.2 1.3 1.4 2.0 2.2 2.2

Income remitted overseas -1.5 -1.5 -2.5 -2.4 -2.6 -3.4 European income 1 .8 250. 21.0 25. 21.3 22.2

National income 29.3 38.1 41.5 42.5 44.6 47.3

Indirect taxes (less subsidies) 2.3 4.3 4.7 4.6 4.7 5.1

Depreciation 2.1 2.5 3.1 4.1 4.8 5.3 Administration (0.2) (0.2) (0.2) (0.2) (0.3) (0.4) Companies (1.9) (2.3) (2.9) (3.9) (4.5) (4.9)

Gross national product 33.7 "4.8 49.4 51.2 54.1 57.8

Note: Differences due to rounding

Source: Banque Centrale du Congo Belge et du Ruanda-Urundi, Annual Report for 1956 Table 4

Belgian Congo

National Expenditure (in billion francs)

1950 1951 1952 1953 1954 1955

African consumption 12.4 17.0 19.7 21.3 22.4 24,0 Subsistence ( 4.7) ( 5.5) ( 6.8) ( 7.2) ( 7.2) ( 7.6) Market ( 7.7) (11.5) (12.9) (14.0) (15.2) (16.4)

European consumption 6.5 7.9 8.9 9.6 10.1 11.1

Public consumption 3.2 3.9 5.2 5.8 6.5 7.0

Gross fixed investment 7.5 11.1 14.8 16.3 15.2 15.7 Administration (1.2) ( 2.5) ( 2.7) ( 3.4) ( 4.1) ( 4.6) Public organizations (1.0) ( 1.8) ( 2.4) ( 3.4) ( 3.2) ( 23) Private (5.3) ( 6.8) ( 9.6) ( 9.5) ( 8.0) ( 8.7)

Change in stocks +0.2 +2.2 +1.9 -0.6 +100 +1.4

External lending (+) or borrowing (-) +3.0 +2.4 -1,5 -1.7 -1,6 -2.1

Donations remitted overseas 0.9 0.5 0.4 0.5 0.5 0.6

Gross National Product 33.7 44. 8 49.4 51.2 54.1 57.8

Note: Differences due to rounding.

Source:Banque Centrale du Congo Belge et du Ruanda-Urundi, Annual Report for 1956. Table 5 Belgian Congo

Agricultural Production (in thousand tons) 1938 1950 1951 1952 1953 1954 1955 1956

Manioc 6,276 6,221 6,742 6,751 6,785 7,520 7,518 Sweet potatoes - 378 386 364 309 343 358 373 Potatoes 19 18 19 15 1-4 14 15 Maize - 337 313 306 324 319 325 315 Peas and beans - 40 49 81 67 70 76 76 Rice (paddy) - 147 1)45 170 177 179 198 185 Peanuts - 162 160 195 180 187 175 182 Plantains - 1,492 1,544 1,816 1,813 1,873 1,966 1,688 Bananas - 20 30 21 26 17 29 45 Palm fruit 2 - 601 691 578 - - - - Palm oil 74 - - 170 179 196 197 221 Palm kernels - - - 109 119 118 120 140 Cobton (seed 122 138 133 158 136 143 146 155 Bard fibers_/ - 21 24 18 6 9 11 9 Rubber - 9 13 17 22 25 r9 32 Coffee - 21 22 21 23 28 29 3? Cocoa 1 2 2 2 2 3 14h Tea - - - - - 1 1 2 Tobacco ------1 Pyrethrum - 1 1 1 1 1 1 1 Cinchona bark 2 2 2 2 2 1 2

Area Under Cultivation in 1956 (in thousand hectares)

African European Total

Cereals 587 2 589 Tuberous crops 689 3 692 Oil crops 377 143 520 Fiber crops 346 1 347 Fruit and vegetables 371 19 390 Sugar and beve ages 10 83 93 Other crops Y4 13 58 71 Total 2,393 309 2,702

1/ Preliminary. Note: Metric tons are used throughout. 2/ As delivered to oil mills by African growers. 7/ Mostly Urena Lobata. IT/Includes i.a. rubber, pyrethrum, tobacco and cinchona bark.

Source: Government General, Department of Agriculture. Table 6

Belgian Congo

Mineral Production (in thousand tons)

1938 1946 1950 1951 1952 1953 1954 1955 1956

Copper 124.0 144.0 175.0 192.0 205.7 214.1 223.8 235.1 247.5 Cobalt (alloy) ( 7.8 7.5 8.0 9.0 7.9 8.2 9.3 Cobalt (granulated) (1. 2.3 2,7 2.5 3.3 4.4 5.4 5.1 5.1 Zinc concentrates 23.0 89.0 188.0 172.2 189.4 242.1 150.3 114.2 203.7 Zinc (metal) - - - - - 7.8 32.0 34.o 42.6 Cassiterite 10.8 18.3 15.2 15.6 14.8 16.3 15.6 15.8 15.2 Cassiterite-tantalo- columbite - 1.1 1.1 1,2 1.6 2,2 18 2.2 Cassiterite-wolfram - 0.4 0.5 0.9 1.0 1.1 1.1 1.0 Tantalo-columbite 0,1 6.1 0.1 0.1 0.1 0.2 0.4 0.4 0,4 Wolfram - 0.4 0.03 0.1 0.2 0.2 0.3 0.3 0,. Tin (metal) 1.8 2.4 3.2 3.1 2.8 2.8 2.5 3.1 2 ,8 Manganese (ore) 3.3 . 16.9 79.C 128.0 216.7 384.9 461.7 329.5 Coal 1 41.7 101.9 159.9 217.9 252.9 315.2 378.9 479.9 469.5 Diamonds(industrial) 6.4 6.o 9.6 10.0 11.0 12.0 12.1 12.4 13.3 Diamonds (gems) 1/ 9,8 0.6 0.5 0.5 0.6 0.6 0.6 0.6 0.6 G.ld (fine) 2/ 14.1 10.0 10.3 10.8 11.3 11.4 11.2 11.4 11.5 Silver 0.1 0.1 0.1 0.1 0.1 0.2 0.1 0.1 0.1 Beryl ------0.2 0.2 Cadmium ------0.1 0.2 0.2 Germanium (ore) 2/ ------1.1 2.2 4.5 3ermanium (metal72 ------0.6 0.6

Million carats. Thousand kilograms. Basis changed to washed ore.

Source: Bulletins of the Banque Centrale; Ministry of Colonies. Table 7

Belgian Congo

Industrial Production (in thousand tons)

1938 1946 1950 1951 1952 1953 1954 1955 1956

Palm oil 55 113 184 200 168 180 176 197 237 Peanut oil 1l4 6 8 6 10 7 5 9 Cotton oil 1/ 2 3 4 5 5 8 8 9 Sugar 15 13 13 1-4 15 16 16 16 17 Beer - 24 182 369 478 646 749 882 1,037 1,229 Cigarette., - - 1,376 1,431 1,666 2,701 2,434 2,925 3,232 Soap 5 21 15 1L 15 16 20 22 23 Textile fabrics/ 1],100 34,600 24,000 36,000 40,815 43,498 47,157 49,965 57,745 Blankets - - 785 1,117 1,250 1,157 1,4 0 1,692 2,072 Bags 5/ - - 1,966 3,884 3,OO 4,860 5,799 5,682 7,915 Shoes - 014 593 824 1,027 1,268 1,433 1,5112 1,963 Metal drums - - 354 774 940 1,085 1,087 1,186 1,0?6 1,03 Cement 25 81 174 205 240 248 345 405 679 Lime 15 29 49 66 83 94 85 97 97

Electric Power Output 7in million kwh)

Hydro- electric Thermal power power Total

1940 399 - 1945 521 - - 1950 718 31 749 1951 812 36 848 1952 919 41 960 1953 1,029 49 1,078 1954 1,218 82 1,300 1955 1,150 250 1,400 1956 1,635 105 1,740

1/ 1939. 2/ Thousand hecto-litres. 3/ Millions. 7/ Thousand riq. meters. 9/ Thousands. 5/ Thousand pairs.

Source: Government Council, Statistics; Banque Centrale, Bulletin, May 1956 and June/July 1956. Table 8

Belgian Congo

Transport

Exports and Imports handled at Ocean Ports and Border Points (in thousand tons)

Matadi, Banana, Boma, Ango-Ango Lobito Beira Dar es Salaam Mombasa Other Total

1950 1,152 239 64 45 20 253 1,773 1952 1,712 432 80 69 15 263 2,571 1954 1,986 508 93 75 10 302 2,974 1956 1,981 631 97 59 15 394 3,177 Goods Carried on Waterways by Otraco Internal Air Traffic Monthly Kilometers Passenger Freight averages Upstream D wnstream flown kilometers ton/kilometers (in thousand tons) (in thousands)

1938 13 4 25,6 1950 3,222 25,100 1,325 1946 t6.3 27.5 1953 6,454 56,912 5,704 1951 36.8 46.8 1956 7,470 90,175 9,356 1956 68.6 65.8

Goods hauled by Railroads (in thousand tons)

Matadi-Leopoldville BCKl/ CFL2/ Vicicongo/ Mayumbe

1938 611 2,763 133 60 84 1946 861 3,707 223 68 110 1950 1,502 4,841 317 95 146 1956 2,951 5,649 585 164 155

Roads and Motor Vehicles

Public roads Private roads Cars Trucks (in kilIometers) 1938 57,682 10,493 3,677 3,946 1946 82,995 11,481 4,851 6,714 1951 105,361 12,975 13,546 16,690 1956 123,446 15,605 29,073 21,609

1/ Port Francqui to Dilolo through Tenke and to Sakania through Tenke and Elisabethville. 2/ Stanleyville to Ponthierville and Kindu to Albertville through Kabalo. ./ Aketi to Mungbere. E/ Boma to Tshela. Source: Banque Centrale, Bulletins; Ministry of Colonies, La Situation Economiquc du Congo Belge; Otraco, Annual Reports; CFL, Annual Reports; Sabena Belgian Airlines. Table 9

Belgian Congo

Ordinary Budget Revenue (in million francs)

Adminis- Govern- trative ment Partici- Income Other Export Import and judicial enter- pations& tax Excise taxes duties duties receipts prises assets TAtal

1938 114 11 173 93 96 56 119 121 783 1946 269 50 271 535 1/ 574 223 195 147 2,264 1950 1,347 103 519 1,470 865 416 418 277 5,416 1951 2,074 136 599 2,330 1,360 622 587 340 8,048

1952 1,671 172 696 2,333 1,747 956 47 749 8,371 2/ 1953 3,786 213 713 2,251 1,620 865 43 863 10,3"P

1954 2,808 331 741 2,197 1,698 998 71 980 9,824

1955 3,247 383 784 2,390 1,679 1,048 106 1,089 10,731 3/ 19563 2,784 443 755 2,862 1,909 1,064 1 1,373 11,191

1957F 3,276 460 843 2,570 1,781 1,131 61 1,203 11,325

1/ Proceeds of a customs surtax were split equally between exports and imports. Includes 1951/52 arrears. Results as of March 31, 1957. 1/ Estimates. Source: Ministry of Colonies. Table 10

Belgian Congo

Ordinary Budget Expenditure (in million francs)

Public Budget works, Equali- Debt Adminis- Agri- communi- Edu- zation 1 service Pensions Defense tration culture cations cation Health Fund Total7

1938 226 35 56 138 33 75 20 67 41 783

1946 210 71 232 434 154 307 82 198 143 2,139 1950 215 192 358 904 386 679 291 426 600 4,894

1951 378 188 491 1,083 480 902 384 568 1,000 6,334 1952 461 198 660 1,382 585 1,127 560 707 800 6,995

1953 542 21.9 627 1,558 720 1s405 673 790 600 7,727

1954 556 248 671 1,655 748 1,503 813 854 - 7,529

1955 780 319 794 1,842 803 1,713 1,001 961 400 9,497 2/ 1956j 1,298 355 744 1,855 796 1,675 1,092 1,007 300 9,476

1957 3/1,746 358 876 2,618 868 1,803 1,421 1,209 - 11,293

1/ Includes miscellaneous expenditures in addition to those specified in the table. 2/ Results as of March 31, 1957. 3/ Estimates.

Source: Ministry of Colonies. Table 11

Belgian Congo

The Ten-Year Plan (in million francs)

Original Revised Investment to estimate estimate December 31, 1956

Waterways 1,400 2,44 1,90 Railroads 1,088 1,365 1,306 Otraco 1/ 3,206 8,367 4,829 Loans to CFL railway company - 250 250 Roads 6,100 6,869 3,696 Airports 964 1,810 1,095 Telecommunications 250 656 398 Municipal transport in Leopoldville - 142 112 Hydroelectric power 3/ 1,909 3,412 2,049 Water and power distribution k/ 1,616 2,278 1,505 Agriculture 1,299 l,748 1,055 Agricultural research 51 339 978 607 European settlement 266 382 309 Urban housing for Africans 6/ 1,900 4,320 2,238 Public health 1,972 2,895 1,295 Education for Africans 1,838 2,179 1,11 Research 165 394 230 Administration 7/ 1,200 7,625 5,318

Total 25,512 48,114 29,192

Office d'Exploitation des Transports Coloniaux. 2/ Investment in waterways and railroads. 7/ Societe des Forces Hydroelectriques du Bas-Congo and Societe des Forces Hydroelectriques de l'Est. 4/ Regie de Distribution d'Eau et de 1'Electricite (Regideso). 9/ Institut National pour l'Etude Agronomique au Congo Belge (Ineac). / Office des Cites Africaines (OCA). and African 7/ Includes administrative buildings, housing for European personnel, municipal infra-structure and schools for Europeans.

Source: Ministry of Colonies. Table 12

Belgian Congo

Public Debt (in billion francs) June 30, 1946 1950 1951 1952 1953 1954 1955 1956 1957

Long-term

Belgian francs 3.8 2.7 2.3 2.3 2.3 2.3 2.2 3.7 / 3 2 Congo francs - 0.5 0.8 0.9 0.9 3.6 7.0 9.5 Y 9.8- Belgian or Congo francs - 2.3 2.3 2.3 2.3 4.5 6.7 8.5 8.5 Swiss francs - 0.7 0.7 1.5 2.4 2.4 2.4 3.0 3.0 U.S. dollars - - 0.1 1.2 2.1 _2. -Z,5 2,5

Total 3.8 6.2 6.2 8.2 10.0 15.3 20.8 27.2 27.5

Short-term

Belgian francs - - 0.6 0.5 0.5 0.3 0.2 0.1 0.1 Congo francs - - 3.8 6.6 4.9 5.7 5.5 5.4 4.9

Total - 2.5 4.4 7.1 5.4 6.0 5.7 5.5 5.0

Grand total 3.8 8.7 10.6 15.3 15.4 21.3 26.5 32.7 32.5

1/ Includes two U.S. Government credits to Belgium (originally totalling $17 million) used and serviced by the Belgian Congo. 2/ Includes the Belgian franc equivalent of the $30 million IBRD loan to Belgium of 1951. 3/ Includes the frs. 1.8 billion grant to the Fonds du Roi in form of an interest

- bearing government bond. Source: Ministry of Colonies; Banque Centrale, Bulletins and Annual Reports. Table 13

Belgian Congo and Ruanda-Urundi

Gold and Net Foreign Exchange Holdings of the Banque Centrale (in million dollars) Convertible Belgian Gold currencies Total francs

July 1, 1952 60.2 29.9 90.1 47.0 Dec. 31, 1952 65.3 58.8 124.1 15.3 Dec. 31, 1953 85.9 90.0 175.9 9.9 Dec. 31, 1954 114.7 65.9 180.6 9.7 Dec. 31, 1955 115.9 75.8 191.7 5.0 Dec. 31, 1956 122.2 67.8 190.0 4.4 June 30, 1957 115.7 47.9 163.6 -9.3

Assets and Liabilities of Commercial Banks (in million francs) 1952 1953 1954 1.955 1956

Cash and banks 3,539 4,598 3,627 2,745 2,217 Commercial bills 2,770 2,607 2,651 2,471 3,030 Acceptance credits - 16 421 577 693 Advances 1,947 2,182 3,119 2,899 3,486 Treasury bills 3,880 3,490 3,660 3,511 3,323 Government secuirities 286 592 1,399 2,310 2,539 Other 1,017 590 694 812 848 Total assets 13,439 14,075 15,571 15,325 16,136

Banks 782 474 411 384 485 Acceptances - 16 421 577 693 Sight deposits 8,560 8,859 9,348 8,831 9,284 Time deposits 2,870 3,253 3,592 3,708 3,722 Capital, reserves and surplus 1,014 1,224 1,427 1,468 1,551 Other 213 249 372 357 401 Total liabilities 13,439 14,075 15,571 15,325 16,136 European cost of African wages Money supply living (19h8/49=100) (July 1950 = 100)

1952 18.5 124.8 154 1/ 171 1953 19.6 123.8 159 177 1954 21.4 123.6 169 187 1955 22.2 124.8 166 196 1956 22.4 3 123.4 206 216 1957 (June 30) 22.0 124.6 206 -

1/ Index of minimum wages. 2/ Index of wages paid by enterprises with more than 500 workers. 7/ May 31.

Source: Bulletins and Annual Reports of the Banque Centrale. Table 14

Belgian Congo and Ruanda-Urundi

Development of Principal Exports

Annual Diamonds averages Copper Cobalt Zinc Tin Manganese 000 tons 000 tons metal content metal content ere industrial 000 tons 000 tons 000 tons and gems million carats

1.6 1926-30 111 05 - - 3.2 1931-35 112 02 1 - - 3.8 1936-4o 152 0.9 - 3 11 186 2:0 1/ - 10 13 8.6 1941-45 8.3 1946-50 161 3.9 2/ 66 11 15 211 . 85 15 180 12.1 1951-55 7 5 g 14.0 1956 250 9.0 100 17 330

Palm and Annual Timber averages Coffee Cocoa Cotton Palm Kernel Oil Rubber (in000 tons7 7.1 1926-30 0.7 0.9 6.9 26.1 1.2 1931-35 8.5 1.1 16.0 45.9 0.3 18.1 1936-4o 17.0 1,2 31.9 67.4 1.0 50.0 32.0 1941-45 19.9 1.3 33.2 85.8 6.0 1946-50 27.8 1.8 47.9 120.0 5.7 86.0 1951-55 35.7 2.6 43.5 162.0 19.1 141.ty 1956 52.0 4.3 52.5 197.0 32.5 162.0

Value of Principal Exports in 1956 in million francs) 269 Copper 10,974 Diamonds 1,346 Oil cake 205 Coffee 2,227 Rubber 1,035 Palm nuts 171 Palm and palm Zinc and Wolfram 121 kernel oil 2,152 concentrates 672 Cocoa Cobalt 1,945 Gold 642 Other 1,571 Cotton 1,816 Timber 396 Tin ore and tin 1,47 Manganese 391 Total 27,380

1/ Saleable production. 7/ Production of recoverable cobalt. '/ Exports in metal content. 1/ 1948-50 annual average. Palm oil only.

Source: Plan Decennal du Congo Belge, Statistics, 1949; U.S. Bureau of Mines - Minerals Yearbook 1952; Bulletin of the Banque Centrale; Bulletin of the Banque du Congo Belge. Table 15

Belgian Congo and Ruanda-Urundi

Development of Importsl/ (in million francs)

1948 1949 1950 1951 1952 1953 1954 1955

Goods for mass consumption 2,037 2,261 1,878 3,314 3,476 2,275 2,811 2,515 Other consumers' goods 2/ 1,300 1,566 1,691 2,549 2,790 2,943 3,116 3,234 Raw materials and semi- finished products 1,754 1,928 2,028 3,662 4,951 4,269 4,838 5,381 Equipment 3,285 4,542 3,809 5,930 8,962 8,685 7,347 7,339 Total 8,376 10,297 9,406 15,455 20,179 18,172 18,539 18,952

1953 1954 1955 1956 Consumers' goods Food products 1,404 1,632 1,790 1,993 Textile goods and shoes 1,712 2,348 1,904 2,108 Other non-durable goods 469 467 563 701 Durable goods 1,208 1,411 1I,L0 1 81 Total 4,793 5,858 5,658 6,283

Raw materials and semi- finished products Foodstuffs 296 288 336 437 Products for agriculture b4 54 54 94 Textiles and leather 65 86 138 14 Building materials 674 717 614 559 Fuel 942 1,324 1,488 l,51 240 Packing materials 168 182 224 Chemicals 407 480 567 654 Metals 1,015 976 1,256 1,362 Other 1,138 1,320 1,498 1,61)4 Total 4,749 5,)427 6,175 6,555 Equipment 43 Agricultural machinery 45 40 39 Road transport equipment 3/ 1,729 1,521 1,744 2,337 Rail transport equipment 1,035 832 543 635 Water transport equipment 334 325 263 174 Air transport equipment 267 272 64 23 Other machinery and equipment 4,646 3,799 3,981 4,069 Total 8,056 6,789 6,634 7,281 Overall total 18,172 18,539 18,952 20,658 two tables shown are computed on a different basis. 1/ The urban Africans. 2/ Primarily for consumption by the Europeans and the better-off 1/ Includes passenger vehicles. / Includes parcel post. Centrale. Source: Bulletins and Annual Reports of the Banque Table 16

Belgian Congo and Ruanda-Urundi

Foreign Trade (in million francs) Annual averages Imports Exports Balance

1926-30 1,624 1,204 - 420 1931-35 576 913 + 337 1935-40 966 2,095 + 1,129 1941-45 2,128 3,960 + 1,832 1946-50 7,581 9,899 + 2,318 1951-55 18,259 20,758 + 2,499 1956 20,658 27,380 + 6,722

Principal Trade Partners (in billion francs)

1938 1946 1951 1956 Belgium Imports 0.50 0.74 6.18 7.17 Exports 1.64 2.60 8.75 6.95 U.S' Inoorts 0.08 1.24 3.44 4.17 Exports 0.03 1.09 3.74 5.87 France Imports 0.02 0.05 0,44 0.68 Exports - 0.07 1.05 4.23 Germany Imports 0.05 - 0.49 1.63 Exports 0.14 0.61 2.00 U.K. Imports 0.07 0.43 1.36 1.48 Exports - 1.11 1.96 1.97

External Receipts and Payments (in million dollars)

Goods Services Current account Long-term capital Receipts Payments Receipts Payments Receipts Payments Receipts Payments

1950 328.2 176.0 29.6 120.0 357.8 296.0 68.8 10.1 1951 424.8 287.2 35.6 146.0 460.4 433.2 29.6 14.3 1952 469.0 374.2 41.0 171.8 $10.0 546.0 72.7 8.2 1953 447.0 331.8 68.0 216.6 515.0 548.4 84.0 29.5 1954 495.8 344.0 67.8 259.2 563.6 603.2 83.0 39.2 1955 555.1 349.7 72.5 318.7 627.6 668.4 114.2 54.8 1956 612.0 371.7 85.2 402.7 697.2 774.4 142.0 68.0

1/ Including non-monetary gold. Source: Plan DQcennal du Congo Bel e, Statistics, 1949; Etudes Economiques du Ministere des Colonies; Buletins and Annua Report of the Banque Centrale. Table 17 Belgian Congo and huanda-Urundi

Balance of Payments in million dollars)

Overall

Current Long-term Short-term Ta Goods Services balance capital capital Total -

1951 + 137.6 - 1104. + 27.2 + 15.3 + 31.9 + 74.4 38.6 1952 + 94.8 - 130.8 - 36.0 + 64.6 + 10.1 +

1953 + 115.2 - 18.6 - 33.4 + 54.5 - 4.6 + 16.5 1954 + i51.8 - 191.4 - 39.6 + 43.8 - 32.9 - 28.7 1955 + 205.4 - 246.2 , - 40.8 + 59.4 - 31.0 - 12.4 1956 + 240.3 - 317.5 - - 77z2 + 74.0 + 26.9 + 23.7 Jith Belium

Current Long-term Shcrt-term Goods 1& Services balance capital capital / Total 11,0 1951 + 51.2 - 76.5 - 25.3 + 1.3 - -

1952 - 7.1 - 87.4 - 94.5 + 16.7 - - 77.8 -144.6 1953 - 48.1 - 111.2 -159.3 + 14.7 - 1954 - 23.7 - -52,5 -176.2 + 35.2 - 0.3 -141.3 1955 - 12.2 - 193.6 -210.8 + 60.8 - 32.6 -132.6 1956 - 6.8 - 256.6 -263.4 + 65.2 + 29.4 -168.8 With the United States and Canada

1/ Current long-term Short-term Goods - Services balance capital capital /otal 6/ 195a7 + 23.8 - 0.8 + 23.0 + 2,5 -11.0 + 14.5

1952 + 12.9 - 9.6 + 3.3 + 10.6 - 4.3 + 9.6

1953 + 41.7 - 1.2 + ho.5 + 6.7 - 2.0 + L5.2 1954 + 53.0 + 0.3 + 53.3 + 1,0 - 2.8 + 51.5 1955 + 58.5 - 1.7 + 56.8 - 2.3 + 0.2 + 54.7 1956 + 65.5 - .5 + 63.0 - 3.3 - 2,0 + $7.7 1/ Including non-monetary gold. _j7 Includes errors and omissions. 3/ Includes sales to the Banque Centrale of locally mined gold. COf which $128 million net expenditure on transport and insurance, and 88 million net payments of interest and dividends. 5/ Belgo-Luxembourg Economic Union. 6/ U.S. only.

Source: Bulletins and annual reports of the Banque Centrale. Table 18 Belgian Congo

Long-term Public External Debt as of June 30, 1957 (in dollars)

2- % 1887 perpetual debt - Belgian francs 3,568 4 % 1896/98 perpetual debt - Belgian francs 164,242 4 % 1901-2000 redeemable bonds - Belgian francs 589,840 3 % 1904 perpetual debt - Belgian francs 469,160 4 % 1906 perpetual debt - Belgian francs 1,307,004 4 % 1909-2000 redeemable bonds - Belgian francs 97,490 4 % 1936-1981 redeemable bonds - Belgian francs 12,140,000 32% 1937-1997 redeemable bonds - Belgian francs 2,033,990 4 % 1937-1997 redeemable bonds - Belgian francs 2,847,500 4 % 1948 perpetual debt - Belgian francs 24,000,000 4 % 1950-1960 redeemable bonds - Belgian or Congolese francs 21,238,200 4 $ 1950-1960 Treasury certificates - Belgian or Congolese francs 19,995,600 4 % 1950-1970 external loan--Swiss francs 13,920,000 4, 1951-1976 IERD loan - U,S. dollars 32,033,411 41fo 1951-1976 IBRD loan - Swiss francs 6,966,50Q 4 % 1952-1976 external loan - Swiss francs 13,800000 4 % 1953-1978 external loan - Swiss francs 13,680,0700 41% 1954-1974 redeemable bonds - Belgian or Congolese francs 14,4CO,COU M 1955-1967 redeemable bonds - Belgian or Congolese francs 1!.2,000,COO 4o 1956-1971 redeemable bonds - Belgian or Congolese francs 42,000,000 4 % 1956-1976 external loan - Swiss francs 13,680,o00 41% 1956-1976 loan by the Belgian Government (counterpart of 1951 IERD loan to Belgium) - Belgian francs 29,250,000 4 % 1927-1974 "Unatral" bonds guaranteed and serviced by the Belgian Congo - Belgian francs 510,000 Total 337,126,594

2-1 1950-1970 MSA loan to Belgium, serviced by the Belgian Congo - U.S. dollars 1,050,982 3% 1951-1976 MSA loan to Belgium, serviced by the Belgian Congo - U.S. dollars 14,931,549

Source: Information obtained from the Ministry of Colonies. Table 19

Belgian Congo

Estimated Contractual Service Payments on the Long-term Public External Debt Outstanding as of June 30, 1957 Total 2/3/ service U.S. dollars Swiss francs Belgian francs - payments Amortization Interest Amortization Interest Amortization Interest (thousands of U.S. dollars equivalent)

1957 2,324 1,917 358 2,591 7,226 10,128 24,544 1958 1,936 1,852 765 2,559 7,238 9,827 24,177 1959 2,452 1,784 1,435 2,509 7,256 9,544 24,980 1960 2,404 1,692 1,492 2,450 30,442 9,259 47,739 1.961 2,523 1,597 1,382 2,390 9,522 8,083 25,497 1962 2,417 1,501 1,510 2,331 13s318 7,691 28,768 1963 2,433 1,402 1,515 2,269 13,823 7,134 28,576 1964 2,456 1,303 2,682 2,207 14,3L4 6,54o 29,532 1965 2,479 1,203 3,849 2,098 14,883 5,974 30,48 6 1966 2,503 1,103 3,849 1,942 15,454 5,299 30,150 1967 2,528 1,001 5,015 1,787 16,01 4.,642 31,014 1968 2,515 899 5,015 1,58h 9,592 3,957 23,562 1969 2,491 798 5,015 1,381 9,933 3,547 23,165 1970 2,518 695 5,015 1,180 10,289 3,123 22,820 1971 2,546 593 3,649 977 10,660 2,686 21,311 1972 2,575 90 3,849 821 5,804 2,230 15,769 1973 2,605 384 3,8649 666 5,983 1,982 15,469 1974 2,636 279 3,849 510 6,168 1,725 15,167 1975 2,668 173 3,849 354 2,301 1,L63 10,808 1976 2,171 64 2,682 199 2,301 1,364 8,781 1977 1,167 93 832 1,282 3,374

/ Includes two MSA loans to Belgium totalling about "16 million serviced by the Belgian Congo. 2/ Includes the counterpart - re-lent to the Congo - of the $30 million IBRD loan of 1951 to Belgium. 3J Includes Belgian franc obligations with Congo franc option.

Source: Ministry of Colonies; computed by IERD Statistics Division.