Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 4951-ZR Public Disclosure Authorized ZAIRE REGIONAL DEVELOPMENTPROBLEMS - THE CASE OF KIVU Public Disclosure Authorized May 31, 1984 Public Disclosure Authorized Regional Programs Department II Eastern Africa Regional Office This document has a restricted distribution and may be used by recipients only in the perfonnance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCYEQUIVALENTS AND UNITS Currency Unit: Zaire (Z) Z 1.00 = 100 makuta Exchange Rates:l/ June 19, 1981-September 12, 1983 Z 1.00 = SDR 0.1575 US$ 1.00 = Z 5.754 Z 1.00 = US$ 0.17 September 12, 1983-February 24, 1984 Z 1.00 = SDR 0.03542 US$ 1.00 = Z 26.93 (29.93) Z 1.00 = US$ 0.04 (0.03) February 24, 1984 Z 1.00 = SDR 0.0288 US$ 1.00 = Z 33.0 Z 1.00 = US$ 0.03 1/ From March 12, 1976 to November 1, 1978, the zaire was pegged to the SDR at a rate of Z 1.00 = SDR 1.00. The zaire underwent a 73.8 percent devaluation vis-a-vis the SDR in 7 stages between November 1, 1978 and June 19, 1981. On September 12, 1983, Zaire introduced a transitional dual exchange rate regime, consisting of an official rate and a free market rate, shown separately above. The two rates were unified on February 24, 1984; henceforth, the rate will float on a weekly basis. NOTE: All conversions to US dollars in this memorandum have been made at the average exchange rate prevailing during the period covered. FOR OFF-ICIAL USE ONLY ABSTRACT TITLE ZAIRE: REGIONALDEVELOPMENT PROBLEMS - THE CASE OF KIVU COUNTRY: ZAIRE REGION : EASTERNAFRICA SECTOR : SPECIAL ECONOMICREPORT REPORT TYPE CLASSIF VfA/IY! LANGUAGES ZAI SER Confidential 05/84 English and French PUBDATE: ABSTRACT: This pilot study of Kivu was undertaken primarily to increase the Bank's understanding of the regional aspects of development in Zaire. The report describes the distinguishing features of the Kivu Region, examines the past performance of its economy with emphasis on agriculture, industry, transport, and education, and discusses the implications for Zaire and the donors which emerge from the analysis. The report argues that while external factors, such as the disruption caused by the political upheaval of the 1960s and the sharp increase in petroleum prices, have adversely affected economic development in the region, domestic policy deficiencies and administrative constraints have also been important factors. The analysis suggests that Kivu's prospects depend on: sustained appropriate macroeconomic management; implementation of institutional measures at both the national and regional levels; execution of priority investments for regional development; more systematic involvement of private sector enterprises, including non-governmental organizations; and active support from the external aid donors through coordinat.ing bodies which are already in place. This documenthas a resticted distributionand may be used by recipientsonly in the performanceof their officialduties. Is contents may not otherwisebe disciosedwithout World Bank authorization. - ii - PREFACE This report is based on the findings of a mission that visited Kinshasa and Kivu in June/July 1983. The mission was composed of Monique Garrity (mission chief), Adriana De Leva (assistant economist)and Hendrick Koppen (consultant). The mission worked closely with the Division of Regional Planning of the Planning Ministry in Kinshasa and the Regional Planning Unit of RCivu in Bukavu. The report was discussed with the Zairian Government in April 1984. The analysis that follows does not take fully into account the exchange rate adjustment and the associated measures of September 1983. - iii - LIST OF ACRONYMS ACOGENOKI : AssociationCooperative des Groupements d'Eleveurs du Nord-Kivu ANEZA : Association National des Entreprises Zairoises BAD : Banque Africaine de Developpement BCZ : Banque Commercialedu Zaire BDEGL : Banque de D4veloppement des Etats des Grands Lacs BIA : Broyage BIA BRALIM : Brasserie Malterie et Limonaderie de Kinshasa CACAOZA : Cacaoyeres du Zaire CADEZA : Caisse GSnerale d'Epargne du Zaire CAFEKIT : Cie de Vente de Cafd au Kivu CAPACO : Cafe, Papaine et Commerce CAPSA : Centre Agricole pour la Production de Semences AmelLor4es CC? : Compagnie de Commerce et de Plantations CCCE : Caisse Centrale de Cooperation Economique CECOP.AE : Centre de Commercialisation des Produits Agricoles du Nord-Est CEDERU : Centre de D4veloppement Rural CEETA : Centre des Etudes pour la Technologie Appropri4e CEiLZA : Cultures et Elevages du Zaire CEPGL : Communaute Economique des Pays des Grands Lacs CERUKI : Centre de Recherches Universitairedu Kivu CIDA : Canadian International Development Agency CU*MYT Centre International de Majoramento de Maize y Trigo CIINAT CimenterieNational CI? : Centre Internationalde la Pomme de Terre CIZA Societe des Ciments du Zaire CODAIK Compagnie de D4veloppement Agro-Pastoral Integrg de Kwango-Kwilu COGEMIN : Compagnie G6n6rale Miniare COMINCEN : Combinat Industriel de Gemena COMIJELE : Compagnie Commerciale et MiniAre de L'U4le COOCEC : Cooperative Centrale d'Epargne et du Credit COOPEC : Cooperative d'Epargne et du Credit COTONNIERE:Societe Catonniaereet Agricole du Kasai et Maniema CPK : Contribution Personnelle Minimum DANE : Dveloppement Agricole du Nord-Est du Zaire DPR : Direction de Planification Regionale DRP : Division Regionale du Plan ECA : Economic Commission for Africa EEC : European Economic Community EGL : Electrification des Grands Lacs ERCC : External Resources Coordination Committee ESTAGRICO: Societe Cotonniire et Agricole de l'Est EXFORKA : Exploitation Forestiare du Kasai FAO Food and Agriculture Organization FED Fonds Europeen de D6veloppement FILTISAE Filatures et Tissages Africains FOMULAC : Fondation Medicale de l'Universlt6 de Louvain en Afrique Centrale FONAMES Fonds National pour L'AssistanceMedico-Sociale - iV - FORESCA1 : Socigte Forestiare et Comerciale Canadienne FORESCOM : Societe Forestiare et Commerciale GECAMINES : Generale des Carriares et des Mines du Zalre ICO : International Coffee Organizatlon IDA : InternationalDevelopment Association INERA : Institut National pour l'Etude et la Recherche Agronouiques INS : Institut National de la Statistique IRAZ Institut de Recherche Agronomique et Zootechnique ISDR Institut Sup4rieur de D4veloppementRural ISP Institut Superieur de Pedagogie ITENCO Enterprise Italienne de Constructionet de Marbrerie du Zaire IZB Industrie ZairoLse des Bois KINAPLANT : Plantations de Quinquina au Kivu HIBA : Societe MiniAre de Bakwanga MIDEXA : Minoterie de Matadi NGO : Non-GovernmentalOrganization OAT : Organizationof African Unity OKIMO : Office des Hines d'Or de Kilo-Moto ONAFITEX : Office National de Fibres Textiles ONATRA : Office National des Transports OPEZ : Organizationpour la Promotion des Petits Entreprises Zairoises O.R. Office des Routes OXFAM Oxford Committee for Famine Relief PALXEZA Palmeraies du Zaire PETRO-ZAIRE Entreprise Petroliere du Zaire PIP Public InvestmentProgram P12 PlantationsLever au Zaire PNM Projet National du Mais PMKO Projet Mais Kasai-Oriental PNR Projet National du Riz PRONAM Programme National Manioc REGIDESO Regie de Distributiond'Eau SAMAWOS Service d'Approvisionnementen Manuels et Fournitures Scolaires SBC Societe des Boissons des Cataracts SBK Societe des Brasseries de Kinshasa SCZ Societes des Cultures du Zaire SDID Socifdt de D4veloppementInternational Desjardins SERAZ Societe d'Etudes et Realisation Agricole au Zaire SEZ Societ& d'Elevageau Zaire SINELAC Societe Internationaled'Electricit£ des Pavs des Grands Lacs SOBRABAhND : Societe des Boissons de Bandundu SOCOBELAN : Soci4t4 de ConstructionNavale et de Lamboissage du Bois SODI2IZA : SociEte de D6veloppementIndustriel et Minier du Zaire SOFIDE : Societe Financiere de Dgveloppement SOKINEX : Societe Kinoise d'Expansion SOMINKI : Soci4t& Minigre et Industriellede Xivu SOTEXCO : Societe Textile Cotonniere et Agricole du Haut Zaire SOTEXKI : Societe Textile de Xisangani SOZACOM : Societe Zairoise de Commercialisatioades Ninerais SOZIR : Societe Zairo-Italiennede Raffinage -v- SNCZ : Soci6tS Nationale des Chemins de Fer du Zaire SNEL : Societe Nationale d'Electricitf SUCRAP : Sucrerie et Raffinerie Centre-Afrique (Kiliba) MK : Transport et Messagerie du Kivu UCCEC : Union des CooperativesCentrales d'Epargne et du Credit UNAZA : Universite Nationale de Zaire UNDP : United Nations DevelovmentProgram UNICEF : United Nations Children's Fund UNIDO : United Nations Industrial Development Organization UNTZA : Union des Travailleurs du Zaire USAID : United States Agency for International Development UZB : Union Zairoise de Banques VTIPA : Village Pilote d'AgricultureModerne ZAIREP : Socite de Recherche et d'Exploitationdu PEtrole au Zaire - vi - ZAIRE: REGIONALDEVELOPMENT PROBLEMS - THE CASE OF KIVU TABLE OF CONTENTS Page No. ABSTRACT i PREFACE ii LIST OF ACRONYMS iii EXECUTIVESUMMARY 1 I. THE SETTING 10 A. Purpose and Organization of the Study 10 B. The Macroeconomic Setting 10 C. Regional Development and Disparities 13 D. Characteristicsof the Kivu Region 15 E. Local Government in Kivu 18 F. Public Finance 20 G. Regional Planning Division (Kivu) 22 II. AGRICULTURE 25 A. Background 25 B. Types of Production Units 26 C. Livestock and Fishing 28 D. Principal Constraintis on Kivu Agriculture 29 E. Investments in Kivu Agriculture 34 F. Conclusions 37 III. INDUSTRY 38 A. Background 38 B. Review of Principal Industrial Activities 41 C. Pr-incipalConstraints on