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RE:PORTS M*-7c RE ST RI CT E D /

ONE e r t N o. EA- 57b

This report was prepared for use within the Bank. In mkigitavailable to others, the Bank assumes no responsibility to them forthe accuracy or cornpleteness of the information contained herein.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

THE ECONOMY OF RUANDA-URUNDI

June 5, 1957

Department of OperationsEurope, Africa and Australasia

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CONVERSION RATES FOR BELGIAN ANDBELGIAN CONGO/ RUANDA-URUNDI CURRENCY

1 Belgian franc I Congo franc

U.S. $1 = 50 francs

I f ranc 2 U.S. cents

1,000,000 francs = U.S. $20,000

T AB LE OF CON T ENT SPage

Maps

Basic Statistics

Summary and Conclusions

General * o .... **so*#..... ...... 1The Country 1The People ....... 1 - 2

The African Organization 2 -.......................... , 2-3The European Administration ....... 3 - 4

The Economy 4.****....*. a. ..... . ...... .a . * * * . .. ..4Stages of Development , 4 - 5Food Crops ,, 5 -6Cattle 6Export Crops ... .. ......... 7 - 8Mining ....... 8- 9Trade ... .*** .... 9 -10

Public Finance and Investment ....... o. .. . V0..00 ..... .. 11Ordinary Budget 1 1 .......... ..... ..

Investment Expenditure ......... gegg..e.ge.0 ....... .0. J -12Financial Assistance by Belgium ............ .... 12 -13Treasury Position .. .. . *o13

Development and Outlook o.o......o. * ... ... ........ ... . ... . 13Wfelfare and Administration ... e.. . .. ... . ... . . 13 -14Agriculture * * * g ** .0..... 14 -15Transport 1 5 . ... *. .. ... .e......* 15 -16Power * .. ...a .. **..********0**.*************a***** 16 -17The Outlook for the Economy ........... . ......... 17 -_.8

Financing Possibilities 19Claims on the Treasury 19Available Funds ........... .................. ............ 19Borrowing Capacity g. .... 19 -20

Appendix: The External Position of the Belgian Congo and Ruanda-Urundi 21The Balance of Payments e. 21 -22Monetary Reserves 22. ....................... ..... *6&. .... . 22The External Debt ........ 22Transfer of Interest and Amortization *....................... 22 -23

Statistical Appendix

RUANDA- URUNDITRANSPORT CONNECTIONS

NIGERIA / / ETHIOPIA

0 Np ( R > S U D"AN \N

4' / 6 oN RI pVER C )

, ,,,;, ' A rff s ~~~~~~~~~TANLEYVILLE K E N Y A D

, ,, . < t 2 ~~~~~~~~~~PONTHIERVILLEQ - c \ $ // ~~~~~~~~B E L G I N E \

\ t { ~~~~~~~~~~~~KIND USvUMBURAE X \;, \ )z>Es ~~~~~~~C 0 N G 0SUUn RUANDA -

, , ~~~~IRAZAINTDLE ANOIW\SMBASA

. / \ _ \? f S tA ~~~~~~~~~~~~~~~~~~~~~~DAR ES SALAAM

JANUARY 957 ~ ~ ~ ~ ~ ~ ~ ~ POTFRNCU

OPO DVILL:, 8 at9'>9t ° tE URUNDI

CAo I V E E A ION' Ft t : l | NYASASAND \ g y vt 2 -~~~~~~~~~YIK

JANUARY~~~~~~~~~~~~~~~~~~~ 195 N15RD-300 K

RUANDA-URUNDIDISTRIBUTION OF POPULATION

U Kakitumbo -

VISOKE jVOLCANO X -/ -

>

BUKAVUKRIIMBIB

Ruanda and Urundi ---- ( *

Marshes_ _ .,'' -- 7 ur r .--- una .

Escarprnenl 'ti .e

0 1 2 0 30 4R0 50 eo v LAK(E inh// abpoitantels 0l l l l l l l I ~~~TA AGA NY/KfA \

O 10 20 30 40 1 " l _ . _ .t - 1

M~ ~ ~ IE LI E u i

FEBRUARY 1957 BRa- 30l0

IBRD-30t

RUANDA-URUNDIRESOURCES

Kakitumba

VOLCANO0 i . \ I |_

BUKA\VU jhagugKRM b

Primary roads _ 7 I ,9J8Secondary roads i C.- / Boundary between___| \r8 YI p §; CtlRuanda and Urundi iU <li 2 6// Cfe

K I Cofe

Morshes - A- Xl!rr uo5 tCfo Mountoins | vIt i7/tn \ . s t tiXj ~Pyrethrum U

Mountains Wolfram~~~~~~~~~~~~~~~~Kbug

Escarpment | r .'¢@ Cassiterite ____

Cassiterite and

KlLOMEreRS CXJ / LA/<E ~~~~~~~~~~~~~~~Bastnaesite ;

° Ia1 20 30 40° t - -* e

MILES -R .U

FEBRUARY 1957 BD31

Nyanza~~~~~~~~~~~~~Ba KO

BASIC DATA

Area 21,170 square miles (54,172 square kilometers)

Population (preliminary estimate for 1956) Livestock (1955)African 4,470PO0O Cattle 906,600European 6,500 Goats 1465,300Asian 2,500 Sheep 459,200

Production (1955) Imports (1955) $ 40.1 millionFood $ 132.0 million Exports (1955) $ 40.1 millionCash crops $ 14.3 million of whichMinerals $ 6.6 million re-exports $ 9.5 million

Estimate of African money income and expenditure (1955) in million dollars

Income from: Expenditure on:Food crops and timber 1.2 Imported goods 16.8Cash crops 13.2 of which:Cattle and fishing 3.6 Textiles 8.4Wages and salaries 11.8 Food and drink 4.9Trade and handicrafts 0.3 Domestic goods 6.4

Taxes and fees 6.930*1 3001

Ruanda-Urundi budget External debt of Ruanda-Urundi (1956)

Preliminary results for 1955 Long-term $46 millionOrdinary revenue $13.6 million (interest free, noOrdinary expenditure $13.6 million fixed repayment date)Extraordinary expenditure $ 7.7 million Short-term $ 0.4 million

Belgian Congo/Ruanda-Urundi monetaryreserves, December 31, 1956 External debt of the Belgian Congo (1956)

Gold $122.2 million Long-term $338.9 millionConvertible currencies$ 67.8 million Short-term $ 2.0 millionBelgian francs $ 4.4 million

Belgian CongoARuanda-Urundi balance of payments (1956) in million dollars

Receipts Payments Balance

Goods including non-monetary gold 612 372 + 240Services 85 402 - 317Long-term capital 142 68 + 74Short-term capital 32 2 + 30Errors and omissions - 3 - 3

871 847 + 24

SUMMARY AND CONCLUSIONS

1. Cn a plateau in the center of Africa lie two ancient kingdoms, Ruandaand Urundi. Their nobility established its claim to power through the owner-ship of cattle while the mass of the people tilled the land for a bare liveli-hood. Because of altitude and inaccessibi-+ty, the inhabitants were sparedthe ravages w-ihich tropical disease and slav- traders inflicted on the surround-ing areas and the dense population has for long pressed against the limits ofsparse resources. The forest was cut down to make room for pasture and, inmany places, erosion exhausted the soil. Periodically, drought and faminechecked the growth of population.

2. For the past forty years Belgium has administered the country, first asa League of Nations Mandate and later as a United Nations Trust Territory. Muchhas been accomplished since then with Belgian effort and money. Education hasspread, mainly due to the work of religious missions. Public health measureshave reduced mortality and brought rapid population growth. More intensivefarming, erosion control and road construction gradually eliminated the dangerof general or local famine. Planting of coffee and cotton provided modest cashincomes and the discovery of mineral deposits created some employment. Usumbura,the capita4 became a modern community and an active commercial center. Finally,in the early tfifties a long-range investment policy was adopted by the Adminis-tration and the Belgian Government agreed to assist it.

3. The Administration now intends to step up the rate of public investment.Its proposals for the next two or three years appear to meet the most immediateneeds for welfare facilities, agricultural improvements and more research intothe country s potentialities. They also include several larger transport andpower projects, hitherto postponed for lack of money. If implemented, theseproposals should carry on the work of raising output and well-being without,however,bringing spectacular benefits on a per capita basis because of thesimultaneous increase in population. Belgian assistance is only enough toprovide abo-at two-thirds of the money, but Belgium offers its guarantee to se-cure additional financing.

4. The fiscal position of Ruanda-Urundi is not very satisfactory. Itsordinary budget has recently been in deficit. Expanding public facilitieshave meant additional recurrent expenditure on their maintenance and operationwith which budget revenue has not been able to keep pace. Ruanda-Urundi hasnever borrowed, except from the Belgian Government on special terms. It couldhardly do so in its present situation without the Belgian guarantee.

5. Close administrative, economic and financial links exist between Ruanda-Urundi and the Belgian Congo. Some of them are formal and some are not. Thesame individuals have at times worked in one or the other country and severalorganizations operate in both. There is no customs barrier between the twocountries and the Congolese franc circulates in Ruanda-Urundi.

6. The foreign trade and payments position of Ruanda-Urundi cannot thereforebe considered in isolation from that of the Belgian Congo. Together, the twoterritories have annual export earnings equivalent to about $700 million andmonetary reserves equivalent to $195 million. Since service payments on theexternal debt of the Congo do not (except for one year) exceed the equivalent of$20-30 million per annum, the common central bank should be well able to trans-fer on behalf of Ruanda-Urundi interest and amortization on the proposed loan.

GENERAL

The Country

1. Ruanda-Urundi lies just south of the equator in the Great Lakes regionof Africa, between the Belgian Congo, Uganda and Tanganyika. It is a smallcountry, about the size of Jest Virginia, made up of two African kingdoms andadministered by Belgium in trust for the United Nations.

2. Remote and sheltered by mountains and marshes, the country has longremained isolated. Usumbura, the capital, is over 2,000 miles from Matadi, theAtlantic port of the Belgian Congo, and about 1,000 miles separate the countryfrom Dar es Salaam and Nombasa on the Indian Ocean. In recent years, air travelhas brought Ruanda-Urundi much closer to the outside world. The journey fromEurope now takes 22 hours, while as many days were needed a generation ago. With-in the country transport is exclusively by road. The rivers are not navigableand no railroads exist.

3. Lake Kivu and Lake Tanganyika, linked by the Ruzizi River, form thewestern boundary. At an altitude of 2,600 feet a tropical plain unfolds alongthe Ruzizi. From the plain and the lakes a chain of mountains, forming thewatershled betwjeen the Congo River and the Nile, rises to 7,000 feet, to descendinto the central plateau sloping gently towards the east. The rivers, original-ly flowing north to the Nile, had their course changed by the volcanic actionwhich formed the mountains on the northwestern border; they now meander eastwardthrough tse-tse ridden valleys, flooding them during the rains, and drain thecountry into Lake Victoria.

4. Throughout most of the country the equatorial climate is tempered byaltitude. Nights in the highlands are usually cool. Rain averages 48" perannum on the plateau, over 40" in the east and less than that in the RuziziValley. The rainy seasons last from September to December and from February toMay; but rainfall is notoriously irregular, and in the past drouglhts oftencaused widespread famine.

The People

5. In this small country live 4.4 million people, not much less than inGhana which is four times bigger in area. The average density is over 200 persquare mile, one of the highest in Africa. However, population distribution isuneven and some places in the highlands show concentrations of 500-750 per squaremile. Periodic faminne formerly cut down the rate of growth, but with better foocand health conditions the population now increases by more than 100,000, or about2!2% per annum.

6. Three races make up the African population. The original inhabitantswere the pygmies, of whom few remain. 14any centuries ago they were pushed backby the Bahutu, farmers of Bantu stock, who now represent 90% of the population.In the seventeenth century, or even earlier, there came from the north, insearch of pasture for their herds, the Batutsi, tall and dignified Hamiticshepherds, with an established tribal hierarchy. They became the ruling minorityand have held this position ever since.

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7. The people live scattered throughout the country, tending their fieldsand grazing their cattle. Only 75,000, ircluding some Congolese, dwell out-side the tribal environment. More than half of these are in Usumbura; theother four larger towns have 2,000-3,000 kf-ican inhabitants each and thelargest mining settlement groups 4,000.

8. Only 125,000 or 15% of the adult men work for wages. About 20% of themlive in settlements close to their place of wJork, but the great majority stillcome each day from the countryside, leaving their wives to till the fields. TheAdministration and the mines are the largest single employers.

9. At-harvest time, 30-40,000 men take seasonal employment on plantationsin Uganda, Tanganyika and the Belgian Congo; some of them are reported toremain, particularly in Uganda. The mines in the Katanga have recruited onthree-year contracts a few thousand men, many of whom decided to stay therepermanently. Since the war, settlement of entire families in the eastern high-lands of the Congo has been encouraged by the Administration. Nevertheless,prospects hardly exist for large-scale emigration from Ruanda-Urundi in theforeseeable future.

10. On the wjhole, the people are still given to their traditional pursuits.Although, as a result of the activity of the religious missions, great strideshave been made in education, only one out of five school-age children attendsschool. Technical skills are inadequate and productivity of labor is low, muchlower than in the Congo. Wages are correspondingly small, an average workerearning frs. 15 a day. A miner can earn frs. 30 but better paid jobs often goto skilled Congolese.

11. The first Europeans e;plored Ruanda and Urundi in the 1890's and Europeaninfluence on the people does not go back rmuch more than 30 years. Even nowithere are only 6,500 Europeans in the entire country, mostly missionaries,administration officials and employees of private companies, and almost half ofthem live in Usumbura. The other non-Africans number 2,500 and are mainly EastIndian and Arab traders and clerks. Ownership of land by Europeans and Asiansis very restricted and therefore unlikely to arouse discontent.

The African Organization

12. The native political organization has its roots in the tradition andcustom of the Batutsi tribes. Ruanda in the north and Urundi in the south areeach ruled by a Mwami (plural Bami) and divided into chiefdoms and sub-chiefdoms.Under the chiefs rank the Batutsi nobility. They are the feudal lords holdingcattle and land in fief from the Mwami.

13. Cattle were the means by which the Batutsi reduced the broad mass ofthe people into vassalage. Realizing that the cow was a symbol of wealth anda source of prestige in a Batutsi society, the Bahutu were willing to offerservices and till the land for the Batutsi in exchange for one or more head ofcattle wihich they could not otherwise possess. Howiever, the cattle "leased"under customary hereditary contracts still belonged to the original owlner andgrazed on the tribal pasture, which the chief often considered his own. Thus

developed a caste system, with a cattle owning minority exercising completecontrol over a farmer majority.

14. Since they came, the Belgians have governed through the native organi-zation. The Bami, chiefs and sub-chiefs are now invested by the Administration,and exercise their prerogatives in compliance with the law. They serve as inter-mediaries between the European authority and the population, and are remuneratedat the rate of frs. 15,000 a month for a chief and frs. 3,000-5,000 for a sub-chief. Their duties are in the spheres of agriculture, health and veterinarymatters, education, public works and public order. Ruanda and Urundi, the chief-doms and sub-chiefdoms have their separate budgets and annual revenues totalingabout frs. 120 million accrue to the local treasuries.

15. As a step in the gradual process of political advancement, local advisorycouncils have been organized on four levels since 1952. Ruanda and Urundi eachhas a superior council presided over by the iHlwami and composed of 24 chiefs andnotables, and of 8 African "evolues" chosen by virtue of Inowledge or occupationand co-opted by the other members. Councils for each territory, chiefdom andsub-chiefdom consist of chiefs and notables who, until recently, wfere eitherselected by their equals or designated by subordinate councils to serve on thehigher council. In November 1956, however, a first step towards popular repre-sentation was taken at the lowest echelon of the structure. Adult African menwent to the polls to vote for electors who in turn nominated the members of thesub-chiefdom councils. In view of the influence which the lower councilsexercise on the composition of the higher ones, the significance of the 1956election should not be under-rated.

16. Although the Belgians accepted the Batutsi oligarchy as an arm of theAdministration, the traditional powers of the feudal lords have been graduallycurtailed. No law prevents the Bahutu from becoming chiefs or council membersandthey can no longerr be dispossessed of, the land they cultivates All physicalservices previously required from the Bahutu have been replaced by cash paymentsinto the local treasuries which finance, inter alia, work on reforestation andlocal road maintenance. In spring 1954, cattle contracts wiere declared no longerbinding by the Mwami of Ruanda and in early 1955 by the hiwami of Urundi. Thegradual dissolution of the lord-vassal relationships ensued, with one-third ofthe animals reverting to the Batutsi and two-thirds becoming the exclusiveproperty of the Bahutu. This meant further emancipation of the broad mass ofthe inhabitants and an important step towards the Administration's goal ofincreasing the participation of all the people in the government of the country.

The European Administration

17. Ruanda-Urundi came under Belgian authority in 1916, having been part ofGerman East Africa before lJorld War I. In its present borders, the country hasbeen administered by Belgium as a League of lqations Mandate since 1923 and as aUnited Nations Trust Territory since 1946. In the Trusteeship Agreement,Belgiumundertakes to promote the development of free political institutions and theeconomic, social and cultural advancement of the inhabitants. Reports on theadministration of the Territory are submitted annually to the Trusteeship Counciland every three years United Nations' visiting missions spend a few weeks in

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Ruanda-Urundi. No term has been fixed for the Trusteeship. However, somemembers of the 1954 mission expressed the belief that the inhabitants could beready for self-government in 20 to 25 yearsc

18. The Belgian Government administers Ruanda-Urundi as an integral part ofBelgian territory in accordance with Belgiani law. Legislative power is vestedin the Belgian Parliament and executive power exercised by the King of theBelgians, who delegates it to the Vice-Governor General, Governor of Ruanda-Urundi. The Vice-Governor General is the head of the Administration of theTrust Territory. He is assisted by two Residents, one for Ruanda and one forUrundi, the administrators of the 18 territories and a staff of 700 Europeans.

19. In exercising his functions, the Vice-Governor GeneraV has sirnce 1947had the advice of the Council of the Vice-Government General-,over wihich hepresides. The Council consists of 22 members. Seven serve ex officio: fivehigh officials of the Administration and the Bami of Ruanda and Urundi. Ninerepresent chambers of commerce and associations of settlers, employers andemployees; they are designated for three years by the Vice-Governor Generalfrom lists submitted by these organizations. The remaining six are appointedfor three years by the Vice-Governor General, three because of their prominencein native affairs and three to speak on behalf of the African population. Atpresent, three of the six are Africans. As a rule the Council assembles once ayear, exainines the budget estimates, discusses problems put on the agenda bythe Vice-Governor General and addresses resolutions to the Administration.

20. Since 1925 Ruanda-Urundi has been linked to the Belgian Congo by anadministrative union represented in the person of the Governor General of theBelgian Congo. Within the union, Ruanda-Urundi has separate legal status as aVice-Government General. Decrees and ordinances of the Governor General, whichdo not apply exclusively to Ruanda-Urundi, are made effective in the TrustTerritory by the Vice-Governor General. The civil service is one for all ofBelgian Africa and a number of public corporations, in charge of native housing,wiater distribution, hydroelectric development and agricultural research, operatein both countries.

21. Ruanda-Urundi and the Belgian Congo form one customs area, with customspolicy centralized in Leopoldville. The Congolese franc circulates as legaltender in the Trust Territory. The three banks at Usumbura are branches of Congocommercial banks. There is one central bank, the Banque Centrale du Congo Belgeet du Ruanda-Urundi, and a common foreign exchange control. One balance of pay-ments is drawn up covering both countries. On the other hand, Ruanda-Urundi hasa separate budget and its own assets and debt.

THE ECONiOMY

Stages of Development

22. Until 30 years ago the inhabitants of Ruanda-Urundi made their clothingof skins and barkA and lived in straw huts on hill slopes denuded of trees. Theytended nearby patches of beans and brewed beer from bananas growing around theirhuts. Every few years lack of rain led to crop failure and starvation.

f/By virtue of recent legislation, a "General Council for Ruanda-Urundi" is totake the place of the Council of the Vice-Government General.

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23, To combat famine, the Belgians enforced cultivation of food on a certainminimum acreage, introduced manioc, improved security of tenure and installedstorage facilities. Soil conservation became the order of the day and groves ofeucalyptus and black wattle soon dotted the countryside. A dense network ofroads was built to ensure orderly administration and rapid supply of food incase of emergency. Despite initial reluctance among the natives, coffee andcotton were introduced as peasant cash crops in the early 'thirties and at aboutthe same time, the mining companies started exploiting gold and tin deposits.

24. WIorld lWar II brought about an expansion in mining and also encouragedthe planting of pyrethrum in the northwestern highlands, but economic activitysuffered a severe setback in 1944, when famine struck once again. Since thelate 'forties, however, progress has been rapid. Production and incomesincreased under the stimulus of public investment, reinforced in the early'fifties by high prices for metals and coffee, and some private investment inmanufacturing. New needs became apparent and living standards advanced. Whenmetal prices gradually gave way and that of coffee fell in autumn of 1954,business and the budget bore the brunt, but the Africans were not greatlyaffected. Since then two good coffee crops in succession and larger publicinvestment expenditure have helped to improve the situation,

25. Nevertheless, the money economy is still very small. In 1955 Africanmoney income hardly exceeded frs. 1.5 billion. The farmers earned an estimatedfrs. 660 million from cash crops, and workers and clerks about frs. 600 millionfrom wages and salaries. Independent incomes from trade and handicrafts wereof little consequence. Most of the money was spent on textile fabrics, clothingand blankets, beer, imported and local food, and household utensils; about one-quarter accrued to the Administration from direct taxes and from import andexport duties on goods consumed and produced by the African population.

Food Crops

26. Beans, peas, sweet potatoes, sorghum and bananas are the traditionalcomponents of the local diet. Together with manioc, popularized only in the'forties, they represent the great bulk of food production. Potatoes, maize,a little wheat in the northwest, and a little rice in the Ruzizi Valley are theother food crops, and the Administration fosters the growing of peanuts and soyato remedy the fat deficiency in the diet.

27. Food production rose gradually before the war and substantially in thepast 10 years. Although official statistics probably over-estimate the extentof the increase, there is little doubt but that the country feeds its greatlyexpanded population very much better today than it did immediately before orafter the war.

28. Practically all food is grown for home consumption. Only small quanti-ties of manioc, bananas, beans and wheat are offered for sale. Some rice isimported regularly by the Administration for storage against emergency and thefood consumption of Europeans is based largely on imports from Europe.

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29. Despite the efforts of the Administration, helped by the InstitutNational pour ltEtude Agronomique du Congo Belge (Ineac), farming techniquesremain, on the whole, primitive and yields are low. Field work is done mainlywith the hoe and little manure is applied. An exception are the firstpaysannats, permanent settlements of farmers on individually held land, whereprescribed crop rotation with adequate fallow periods is practised under thesupervision of the Administration. In the twio paysannats, established in thelate 'forties in the Ruzizi Valley, 5,000 families, many of them resettledfrom the over-populated highlands, grow cotton and food crops on their ownirrigated holdings. Further south, on the lower Ruzizi, farmers grouped in asmaller paysannat cultivate rice and peanuts.

Cattle

30. There are about 900,000 head of cattle in Ruanda-Urundi from lwhich theirowners derive high standing but little economic benefit. They are lean, givethree or four quarts of milk a day and their meat is of poor quality. Littlecare is given them and their manure is not properly utilized. In the rainyseason the cattle graze on hill slopes; in the dry season they are driven tofeed in the marshy valleys, where they often contract disease.

31. The cattle are located mainly on the central plateau, where there areoften more than 75 head per square mile. As the tse-tse fly has not yet beencompletely exterminated in lower altitudes, cattle density in the northeasternN4utara, the southeastern Mosso and the Ruzizi Valley is very much less than inthe highlands. Large herds are an exception. About 80,000 Batutsi have rightsto cattle and twice as many Bahutu hold two or three cows each.

32. With much effort and persuasion, the Administration's veterinary servicehas been striving to improve the situation. Water points and dipping tanks havebeen installed in rural areas and the cattle are regularly vaccinated. Greatstress is placed on the necessity of growsing and storing fodder for the dryseason, a difficult problem in view of the existence of tribal rights to pasture.The owners are encouraged to build barns or "board" their cows in model farmsset up by the Administration and to observe the results of proper care for theanimals. In its breeding centers, Ineac engages in crossing local cows wfithimported bulls and in experiments with feed crops.

33. The dissolution of the customary cattle contracts might mark a beginningof an economic use of cattle. By the end of 1955 60,000 contracts involving210,000 cows were dissolved. The resulting freedom of the now full-fledgedowners to dispose of their cattle in accordance with their wishes should facili-tate the efforts of the Administration to introduce rational animal husbandry.

34. Meat consumption among Africans is being stimulated by the AdministraticrSince 1954, the law requires that meat be given to each worker as part of hispay. About 120,000 head of cattle is slaughtered for consumption in urban andmining centers, and exported on the hoof to the Congo, a number roughly corre-sponding to the annual increment. The problem of freezing and storing meat forexport to the Congo has been studied for some time. Recently, Elevages etAlimentation du Katanga (Elakat), a Congo company engaged in the raising andimporting of beef for consumption by industrial workers in the Katanga, beganto set up small cold storage plants in the Congo/Ruanda-Urundi border region.

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Export Crops

35. Although nearly all Africans still rely on homegrown food for sub-sistence, about half the families have a stak:e in the money economy by producingcoffee, cotton or castor beans for export and selling a little tobacco, palm oilor peanuts in the local market. Cash crops account for 3% of cultivated areaand bring the growers an annual income of about frs. 1,500 per family. By farthe largest peasant cash crop and the largest export of Ruanda-Urundi is Arabicacoffee.

36. From half a million in 1930 the number of coffee trees rose to 22 millionwhen the war broke out. Thereafter, iith markets abroad shrinking, plantingslowed down and the trees were neglected. To counteract the prospective declinein production the Administration sponsored in 1950 a big planting and pruningprogram. As a result, there are now more than 50 million trees, 35 million ofthem in bearing. Throughout the highlands about 400,000 farmers tend smallplantations averaging 100 coffee trees in bearing and the number of trees pergrower is constantly increasing. The main producing areas are in the territoriesof Ngozi, Kitega and Muhinga in Urundi, and Nyanza and Kigali in Ruanda.

37. Except for setbacks due to drought or pests, production of parchmentcoffee expanded gradually from less than 100 tons in 1930 to 6,000 tons in 1940and 21,000 tons in 1956. Simultaneously, average yield per tree increased from2 lb. to almost 1 lb. However, yields vary considerably. On lava soil nearKisenyi, for instance, over 3 lbs. of coffee can be obtained from a tree, whereasaround Biulmba, only 40 miles to the east, the yield falls below 2 lb.

38. With the progress in production has gone a considerable improvement inquality, as a result of persistent propaganda and control efforts by the Adminis-tration, seconded since the wrar by a public corporation, the Office des CafesIndigenes du Ruanda-Urundi (Ociru). Agents of the agricultural service and Ociruset up nurseries, distribute plants and teach the peasants how to care for thetrees and process the beans. Depulping and washing is now done mostly in the 300Ociru centers under the supervision of African agricultural assistants. Properfermentation and drying methods are being applied in two planters' cooperativesestablished with the support of the Administration.

39. The coffee harvest lasts from May to February, but the bulk is gatheredduring June, July and August. This malces it possible for sllipments to reach theU. S. market before Colombian exports get under 'way and helps to explain whyRuanda-Urundi coffee finds ready buyers in the U.S. The marketing of parchmentcoffee by the planters is supervised by the Administration. Purchases take placeat specified locations and traders require a licence. After parchment coffee isbrought down to Usumbura and the coating removed through a milling process, Ocirusteps in again to control the quality-of exported green coffee. Export licencesare issued after sampling and grading, and lots can be offered to foreign buyersonly under the appropriate Ociru classification. The cost of operating Ociruservices is covered by a remuneration fee levied on the exported coffee.

40. Ruanda-Urundi produces only a minor fraction of the coffee offered in theworld market. It exercises no influence on the price but reflects in full itsfluctuations. In this situation, the Administration sets a minimum price payableto the planter and endeavours to keep it as stable as possible. At the same time,the Administration tries to increase output per planter to ensure him a steadytotal income in the event of the lowering of the minLInum price. The African cash

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crop grower in Ruanda-Urundi reacts much rather to a change in his total earningsthan to a change in the price per unit. His interest in his crop should notsuffer as long as larger quantity offsets the impact of the lower price on histotal cash income.

41. Two methods are employed to lessen the effect of world market fluctu-ations on the mininLua price. First, an equalization fee fixed before the harvestis levied on exported coffee and credited to an equalization fund, which is drawnon to support the price payable to the planter in the event of a sharp fall ofcoffee in the world market. Due to favorable world market prices, the equali-zation fee was set high in the early 'fifties and the fund increased fromfrs. 100 million in 1950 to frs. 370 million in 1954. After the coffee pricebroke in August 1954, the equalization fee was drastically reduced and somemoney in the equalization fund was drawn doanto support the price payable to theplanters. Secondly, the export duty on coffee is used as a shock absorber inthat the Administration raises and lowers it in line with world price fluctu-ations. Thus, between spring 1953 and spring 1954 the duty was gradually raisedfrom 12% to 18% and then, between auturm 1954 and autumn 1955, reduced by stepsto 9%*

42. Ruanda-Urundi also produces in normal years 2,300 tons of ginned cotton,mostly in the two paysannats in the Ruzizi Valley, where the average yield nowequals 230 lbs. per acre, very good in the circumstances, and the growers earn,on the average, frs. 3,000 per annum. As in the case of coffee, the Adminis-tration has arranged marketing of cotton to ensure reasonably stable prices toproducers. The Compagnie de la Ruzizi, a private company operating underofficial supervision, has the exclusive right to buy, gin and sell Ruanda-Urundicotton. The price paid by it to the farmer is fixed by the Governor General forRuzizi Valley cotton cultivated on both sides of the border. In the event of afall of cotton in the world market, this price would be supported by the Caissede Reserve Cotonniere, the common Congo/Ruanda-Urundi cotton equalization fund.

43. The export crop of the few European plantations is pyrethrum, a whiteflower used in insecticides. Pyrethrum grows only in high altitudes and requiresmuch labor for picking. Plantations were started in the northwest of Ruandashortly before the war and expanded under the influence of wartime demand. Sincethe wiar, the market deteriorated owing to the spread of synthetic insecticidesand strong competition from Japanese suppliers. Annual production now runs at1,000 tons, valued at frs. 30 million, and most of it is sold in the UnitedStates. Financial results are far less attractive since rising wages payable tohundreds of pickers eat up the profit margins of the planters.

Mining

44. Minerals are the second most important export of Ruanda-Urundi. Miningcompanies and operators employ up to 20,000 workers, pay out annually aboutfrs. 120 million in wages and contribute frs. 30-40 million to the budget. Onthe other hand, the relative modesty of exploited mineral resources has so farbeen one of the explanations for the poverty of the country and the limited scopeof private investment.

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45. Cassiterite and ores of metals associated with tin represent the largestpart of mineral wealth. The exploited deposits of cassiterite stretch acrossthe center of Ruanda (tantalo-columbite being most often found in the westernore bodies), and the wolfram mines are concentrated in the northwest. Smallgold workings lie high in the mountains south of Lake Kivu. Some rare earthminerals, like bastnaesite and amblygonite, are also mined, and recently a smalldeposit of copper was discovered near Usumbura.

46. Mining operations started in the early 'thirties. Output increased to2,400 tons metal content per annum by 1942 and, after a setback due to thefamine, has risen further to about 3,000 tons. Cassiterite is responsible forthe bulk of production, the shares of wolfram and tantalo-columbite varying inaccordance with changes in demand. In 1955 the value of mineral output equaledfrs. 330 million. Cassiterite contributed over one-half of the total andwolfram over one-quarter. Tantalo-columbite, rare earth minerals and gold wereresponsible for the remainder.

47. Three companies, the Societe des Mines d'Etain du Ruanda-Urundi(Minetain), the Compagnie Geologique et Miniere du Ruanda-Urundi (Georuanda)and the Societe Miniere de Muhinga et de Kigali (Somuki), are responsible forabout 75%0 of the mining output; and among the smaller producers are twoimportant mine operators responsible for two-thirds of the production of wolfrarnThe largest and oldest of the "big three" is M'inetain, a producer of cassiterite3tantalo-columbite and wolfram, and the exclusive producer of gold and amblygonite.Established in 1929 and reorganized since then, Minetain has now a capital offrs. 150 million, in which the Trust Territory participates to the extent of 30%,and Union Miniere du Haut-Katanga and Symetain, the largest Congo tin producer,each hold a 10% participation. Second in line is Georuanda, established in 1945to exploit one large concession on which over 1,000 tons of high-content cas-siterite are now being produced annually. Georuanda has a capital of frs. 150million and is controlled by the large Congo tin concern Geomines; the interestof the Trust Territory in this company is small. The weakest of the "big three"is Somuki, which mines cassiterite and bastnaesite. It was established in 1933and the Trust Territory is among its major shareholders.

48. Mining conditions in Ruanda-Urundi are not particularly favorable.Prospecting is difficult and costly because deposits are usually small, widelyscattered and relatively inaccessible. Productivity of labor is low owing inpart to the low degree of mechanization. Water for the monitors and for orewashing has often to be brought over long distances and pumped high up to theore bodies. Power is very expensive; generated by small diesel plants runningon imported fuel it costs frs. 4-5 per kwh. So far the mines have worked mainlyalluvial deposits, but they are approaching the point where they will have tomine hard rock and consequently require cheap power for crushing.

Trade

49. Usumbura, on the northeastern tip of Lake Tanganyika, is the commercialhub of Ruanda-Urundi and the gateway into the country. A few large Europeanand East Indian firms are established there as exporters of coffee, hides andother produce, and general importers. Coffee processing plants owned by the

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exporting fixms, a cotton-seed oil mill, rmetal workshops, construction firmsand a brewery, practically all built in recent years, lie to the north of thecity. About 80% of imports come in through the port from Albertville in theCongo and Kigoma in Tanganyika; part of then are goods in transit to theeastern Congo from the Katanga and Dar es Salaam. Exports shipped throughUsumbura account only for about one-third of the total volume but includepractically all coffee and minerals. Port traffic has grown from 27,000 tonsto newly 200,000 tons in the past 15 years.

50. In the interior, business is done in the "centres de commerce," whereall races offer their wares, and the "centres de negoce," where only Africans

are authorized to sell. Coffee is purchased from the growers, often against

consumers goods, and transported to Usumbura by licensed traders, who act asintermediaries for the large export houses. After processing it is shippedto Dar es Salaam and from there most of it goes to the U.S. The mining compa-nies have long-term arrangements with Usumbura trucking firms, which also haulgeneral supplies and equipment back to the mines. For Georuanda the destinationis the Geomines smelter at Manono in the Katanga, for other producers mainlyMatadi from where the ores are shipped to Belgium or the U.S. Cattle are driven

to the Congo by road and some exports from northern Ruanda are evacuated on

trucks to the railhead of the Mombasa railroad.

51. In 1955, Ruanda-Urundi exports and imports totaled 258,000 tons, anenormous increase over the 12,000 tons of 1930. They were valued at frs. 2billion each, By far the largest export is coffee. In recent years, shipmentsamounted to 10-11,000 tons of green coffee, bringing in close to frs. 600

million per annum; however, 15,000 tons priced at about frs. 750 million were

exported in 1955 and 13,500 tons priced at frs. 700 million in 1956. Next comethe minerals, earning around frs. 250-300 million per annum. Livestock and

hides add another frs. 200 million and cotton frs. 50-70 million. Pyrethrum,castor beans, cotton seed oil, cement and bricks make up practically all the

rest of locally produced exports. Imports, on the other hand, include a vast

range of consumers goods, materials, fuels and equipment.

52. The trading position of Ruanda-Urundi has become more advantageous since

the war oiwing to the high price of coffee. Particularly favorable terms tif

trade were experienced between 1952 and 1954. The situation changed when coffee

prices fell in autumn 1954 but this was little felt outside Usumbura sincecoffee planters were protected from falling prices by the minimum price system.Internally, prices have now been stable for four years; only prices of building

materials recorded a decline until the end of 1955, regaining some ground there-after.

53. The branches of Congo commercial banks in Usumbura finance the coffeeharvest and the imports by lending to the large commercial firms. They inturn advance money or supply native consumers goods on credit to traders whobuy coffee in the interior. Thus, the risks are squarely on the shoulders ofthe Usumbura export and import houses. Twice since the beginning of the decadethey over-borrowed from banks when prices were rising; in 1951 they accumulatedinventories of imported goods and had to liquidate stocks at a loss in 1952/53;in 1954 they held back large coffee supplies and were badly hit by the August

price break. Apparently the lessons did not pass unnoticed and at present a

sounder atmosphere prevails in the commercial field.

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PUBLIC FINANCE PiflJ DIVEST"1ENT

54. Within the limits imposed by the administrative union with the BelgianCongo, Ruanda-Urundi has fiscal autonomy. Thts budget is separate from thatof the Congo. Revenue and expenditure estii,ates are both established inUsumbura, setting Ruanda-Urundi apart from Congo provinces which only draw upexpenditure estimates. However, the budget of the Trust Territory is officiallytransmitted to the Minister of Colonies by the Governor General at Leopoldvilleand his services may suggest revisions of the estimates to the Ministry. Further,by virtue of the customs union, import and export duties are set in Leopoldville.

Ordinary Budget

55. Ordinary expenditure. reflects the philosophy of the Belgian Adminis-tration in Ruanda-Urundi. Public health, education, and agricultural andveterinary services account for about one-half. The cost of administrative andjudicial services is moderate, partly due to the principle of indirect rule,and military expenditure is small.

56. On the revenue side, customs and excise are responsible for about 35%of the total. Direct taxes paid by Africans bring in 25-30%. A head tax islevied on all adult men at the rate of frs. 80-200 per annum, depending onliving conditions in the particular area, and a uniform tax of frs. 50 is pay-able on all cattle. The income tax, individual and corporate, affects primnarilythe European and Asian population; however, any African earning more thanfrs. 24,000 per annum is subject to it and exempt from head tax. Collection ofincome tax has become more effective in the past few years and the tax nowaccounts for more than 15'% of total revenue.

57. The size of the ordinary budget is still modest although its expansionhas been rapid in the past 20 years. In terms of present day francs, expendi-ture rose from frs. 57 million in 1937 to frs. 220 million in 1947 and frs. &Imillion in 1955. The large deficits of the late 'twenties and early tthirties,covered by Belgium, were followed by moderate surpluses ending in the deficitsof 1948 and 1949. Due to favorable prices for metals and coffee, substantialsurpluses were accumulated in the early 'fifties. The 1954 budget, however,showed a smaIl dei.cit Substnnial deficits were budgeted for 1956 and 1957, butt* is likely that actual results will be more favorable than the estimates,Investment Expenditure

58. Before World War II public investment never assumed large proportionsin Ruanda-Urundi. Most schools and hospitals were built by the religiousmissions. It is only since 1930 that substantial sums have been spent on roadconstruction and these have been advanced by Belgium. In the late 'fortiesthe Regie de Distribution d'Eau et d'Electricite (Regideso), provided withbudget funds, started setting up municipal power and water distribuzion systems.Direct investment by the Administration in hospitals, schools and administrativebuildings gained in importance at the turn of the decade. To finance this extra-ordinary budget expenditure, the Belgian Government advanced frs. 300 million toRuanda-Urundi in autumn 1951. In addition, the Native Wlelfare Fund (FBEI),financed by a Belgian postwar grant, began to build water supply and welfareinstallations in rural areas.

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59. Mearnwhile 3 the Administration drew up an inventory of programs andprojects estimated to cost frs. 3.4 billion at the then prevailing prices.Supplemented with much background information on the country, this inventorywas published in 1951 under the title "The Ten-Year Plan for the Economic andSocial Development of Ruanda-Urundi." Transport and social overhead were eachresponsible for about 35% of the proposed total investment. Agriculture andanimal husbandry, hydroelectric power, and research in various fields eachaccounted for roughly 10%. Among the outstanding features of the Plan was thescope of the road program, very ambitious for a country with light traffic anddense road network, and the intention to remedy overstocking by slaughteringin ten years 400,000 head of cattle.

60. Since 1952, public investment has been carried out within the frameworkof the Plan but, for various reasons, the Administration did not adhere strictlyto the published inventory. Prices were very much higher in the early 'fiftiesthan in 1949/1950 when the Plan was drawn up; subsequent studies and experimentscast doubt on various assumptions made in the Plan and new officials advocateddifferent solutions to the country's problems. Construction of new roads waspestponed and improvement of existing ones pushed; ideas changed on how to copewith the excess of cattle; a housing program of the Office des:Cites Africaines

(OCA) for 15,000 Africans in Usumbura was integrated into the Plan; and recentlymuch attention has been devoted to land reclamation possibilities in the eastof the country.

61. In the five years 1952-56, the Administration spent directly one billionfrancs and the four public organizations - Regideso, OCA, Ineac and Institutde Recherche Scientifique en Afrique Centrale (Irsac) - invested close to halfa billion francs, partly from their own funds and partly from extraordinarybudget appropriations. Two-thirds of the money went into housing, adminis-trative buildings, schools, hospitals and water distribution facilities. Trans-port, agriculture and research absorbed the rest. In addition to the capitaloutlay on the Plan, another quarter of a billion francs was provided in theextraordinary budget in the past five years to acquire real estate and otherassets, including a large participation in the capital of Minetain, and to buildmilitary installations. The financial effort of the Native Welfare Fund in therural areas was probably of the same order of magnitude. Consequently, totalpublic investment in Ruanda-Urundi may be estimated at about frs. 2 billionbetween 1952 and 1956.

Financial Assistance by Belgium

62. Recognizing that in Ruanda-Urundi capital formation cannot be countedon in the foreseeable future, the Belgian Government resolved in 1952 to putits financial assistance to the Trust Territory on a more regular basis. Itdecided to advance frs. 400 million per annum to the extraordinary budget ofRuanda-Urundi, with the intention of continuing this contribution over the lifeof the Plan, i.e. until 1961. The use of the contribution for ordinary budgetneeds was precluded. Belgian assistance was expected to finance programs andprojects covered by the frs. 3.4 billion Plan and capital outlay on militaryand portfolio investments.

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63. The Belgian contribution is not made in cash but takes the form ofBelgian Treasury certificates, in frs. 100 million denominations, payable overa four-year period commencing two years after the date of the budget in whichthe appropriation is voted. For instance, the first frs. 400 million was duein the years 1954-1957. In order to collect cash earlier, the Ruanda-UrundiAdministration discounted all four 1952 certificates wTith Congo Treasury in May1953. As a result, only frs. 300 million has been received in cash over thefollowing three years.

64. Belgiumts financial assistance to Ruanda-Urundi is not a grant-in-aid.Both the 1951 advance and the regular advances are repayable. However, theybear no interest and no date has been fixed for their repayment. Outside theseadvances, the public debt of Ruanda-Urundi consists of frs. 20 million Treasurybills held by the Belgian Government and of frs. 200 million 4% perpetual bondsrepresenting Ruanda-Urundils share in the frs. 2 billion Fonds du Roi, createdby the Congo and Ruanda-Urundi in 1956 to improve housing conditions of theAfrican population.

Treasury Position

65. Under the influence of large cash receipts on account of Belgianassistance and substantial ordinary budget surpluses, Ruanda-Urundi Treasurybalances increased from frs. 43 million on December 31, 1950 to frs. 895 millionon December 31, 1953. During the following three years, however, investmentexpenditure has grown larger, ordinary surpluses have ceased and the Belgianadvances have not brought in much cash, At the end of 1956 the Treasury showeda cash balance of frs. 538 million, but sums due to the Congo arising out ofcertain old claims not yet finally settled exceeded this amount.

DEVELOPMETT AND OUTLOOK

66. As the Plan progressed it became increasingly evident that its cost wouldbe much greater than had been estimated. The rise in prices, which intervenedafter the Plan had been drawn up but before it was launched, has also upset theexpected balance between the extraordinary budget expenditure of Ruanda-Urundiand the annual contribution by the Belgian Government. Consequently, in thetwo years, the Administration has been re-examining projects included in thePlan with a view to preparing an investment program for the next few yearswhich would be commensurate with the financial possibilities and, at the sametime, would bring the largest possible benefit to the economy. This work hasnow advanced far enough to make it possible to give a broad outline of what maybe accomplished between now and 1960. Basically, the Administration willcontinue what it has been doing in social welfare, agriculture and research,expanding its work as adequate personnel becomes available. At the same time,several larger transport and power projects will be started as soon as theAdministration solves the question of financing them.

Welfare and Administration

67. The Belgians in Ruanda-Urundi have always placed considerable stress onthe human factor in development. They intend to continue investment in welfarefacilities which serve to improve the health, knowJledge and environment of theAfrican, possibly with some shift of emphasis from general educationtovccational

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training in the belief that better productivity of labor leads soonest toeconomic benefits. Construction of administrative buildings and housing forthe European staff will also go on because orly good living and working con-ditions can ensure recruitment and lasting efficiency of administrators andspecialists qualified to train and guide the inhabitants.

Agriculture

68. The approach of the Administration to agricultural development will bealong three lines. It will, first of all, promote more rational cultivationof food and cash crops in the settled areas. Secondly, it will endeavour toimprove animal husbandry by a gradual introduction of mixed farming. In thethird place, it will study the possibilities for opening up the eastern regions,settling them and reclaiming new land. In all these fields, the initial effortwsill be a matter of organization, training, supervision and study. This willrequire expansion in specialized European staff doing research and experimentalwork, the results of wjhich will later contribute to more economic use of exist-ing resources and better living standards.

69. In dealing with food and cash crops, the Admninistration will primarilyrely on its existing extension service. Agricultural agents, in cooperationwith Ineac, will continue to strive to raise food yields and check soil erosion.The number of coffee trees per grower, which has by now risen from the initial50 to over 100, will be increased further, with a goal of 250 being mentionedas a possibility for the eager and skillful planters. In the two paysannatson the Ruzizi River the individual plots under cotton will be enlarged. Otherattempts to increase crop production aim at setting up a new large cottonpaysannat in the Ruzizi Valley and several smaller paysannats east of Astridawith peanuts as cash crop. Further, it is proposed to drain some of the smallmarshes in the narrow river valleys of the interior to make possible cultivationof food and free some acreage on the hillsides for growing coffee.

70. The original proposals for a drastic reduction in the number of cattleand the creation of a large, publicly owned, meat freezing and processing planthave been abandoned as impracticable. The subsequent endeavor to promotecattle raising on irrigated land in the sparsely populated dry savannah regionof MRutara in the northeast of Ruanda has proved disappointing, because thepeople shirked resettlement and required constant supervision which the Adminis-tration wias unable to provide. At present, the Administration is seeking tointroduce gradually on the central plateau a system of mixed farming and todivert the people's interest from more to better cattle. Experiments are beingconducted in selected zones to establish the optimum pastoral load per unit ofland and attempts are being made to persuade the farmer that he gains byslaughtering poor livestock. Although this approach seems sound, there arestill doubts as to how a system of mixed farming can be fitted into the mostintensively cultivated areas. In any case, a solution of the overstockingproblem is far off; even the results of the experiments cannot be expected fora few years.-

71. On the central plateau the competing claims of food, fodder and exportcrops on land camnot be contained much longer. New land in the east will haveto be put to use. Some years ago great hopes were entertained about the chances

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of developing the hosso, a sparsely populated region along the Malagarasi Riverin the southeast of Urundi and resettling up to 120,000 people from the over-crowded highlands. But a recently completed soil survey showed that the acreageof good soil does not exceed 30% of the entire region and, furthermore, half ofthat is subject to severe erosion. The qua iity of the remaining soils and thewater shortage would make cultivation hazardous. Since the cultivable area isalready well settled, prospects for extensive additional settlement hardly exist,Ineac, which for several years has conducted experiments with cotton, rice andpeanuts on irrigated lots in various parts of the Mosso, will presumably perse-vere in its work until more definite results become available, but the Adminis-tration1s main effort in the field of regional development will probably beshifted north to the Bugesera.

72. This is a thinly inhabited region of lakes and papyrus marshes situatedin the east of Ruanda. An ingenious scheme to reclaim between 100,000 and150,000 ha. of land in the Bugesera was proposed in 1955. A series of dams,tunnels and canals would divert some of the waters of the Nyawarongo andAkanyaru Rivers in such a way as to regulate the level of several lakes, drainthe valleys during the rains and irrigate them in the dry season. Preliminaryexploration, carried out with limited personnel and means in the past 18 months,fully warrants further studies to establish in detail engineering and economicfeasibility. Pr-ecise topographic levelling and accurate measurement at allseasons of river flow throughout the entire area is indispensable to form anengineering judgment. Extensive soil and land use surveys must be undertakenbefore the possible crop pattern can be evolved. The cost of the variousstructures, of earth-moving and land-clearing, and of large scale resettlementhas to be worked out to make possible the final appraisal of the economic meritsof the scheme. All this will take time and even if adequate staff of hydrolo-gists, pedologists and agronomists were assembled now to study the project,construction work in the Bugesera could not start before 1959.

Transport

73. Three transport projects, large by Ruanda-Urundi standards, are proposedfor the near future. They are: a sheltered modern port on Lake Tanganyika atUsumbura, an international airport at Usumbura and a hard-surfaced road fromUsumbura up the mountain range to the central plateau. All these projects wereincluded in the original inventory but the construction of the port and theroad has been delayed for lack of funds.

74. The existing port installations at Usuxtoura are obsolete and inadequatefor present-day traffic. Though loading and unloading go on around the clockthroughout the year, warehouses get congested and delays occur during the coffeeharvest season, when a large part of the annual exports is being shipped in arelatively short period. The rapidly rising traffic calls for more extensiveand efficient facilities. Plans for a new port were prepared some years agoand construction is expected to last about 2_1/2 years. The total cost will bedivided between the Administration and the Compagnie des Chemins de Fer du CongoSuperieur aux Grands Lacs Africains (C.F.L.), a large old-established Congotransport enterprise which, by virtue of a 1932 concession, is in charge ofport operations.

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75. Since the existing Bukavu airfield, built by the Congo Government onthe Ruanda side of the border, cannot be enlarged to serve present day require-ments of Eastern Congo, the decision has been taken to build just north ofUsumbura a new airport capable of accommodating DC-6 planes. The contract cover-ing the runways and accessory roads has already been let and the project isexpected to be completed in 1959. Mountainous country on the Congo side of theborder makes Usumbura with its approach from the lake the only suitable sitefor an international airport in the vast area between Stanleyville and Elisabeth-ville. Even now, lhrger planes land at Usumbura than at Bukavu and at least halfof the air traffic is to and from the Congo, with passengers changing fromDC-4ts to DC-3's and vice versa. Because the airport wiould benefit the Congoas well as Ruanda-Urundi, the investment could justifiably be divided betweenthe two countries; it appears, however, that the entire cost will be borne byRuanda-Urundi.

76. From the central plateau where they originate, Ruanda-Urundi t s foremostexports, coffee and minerals, reach Usumbura by road across the Congo-Nilewatershed. The 25-mile stretch of asphalted road to be built in the next threeyears will replace the unsurfaced road, which is by far the most heavilytravelled and one of the roughest in the country, and will link up on theplateau irith the existing road to Astrida, Kigali and Kakitumba. The authors ofthe Plan proposed in 1950 to construct the entire south-north connection fromUsumbura to Kakitumba, together with three other primary roads and four feederroads. These ambitious intentions have been abandoned for the time being. Thelinking of Usumbura to the new road running on Congo territory from LakeTanganyika to Bukavu has speeded up and increased travel between the two centers.In the interior, the existing road network still appears adequate for the com-paratively light tUraffic, particularly since the considerable improvement of theeast-west road from Astrida to Shangugu. Thus, pending a further rise intraffic on the plateau, the road program for the immediate future has been re-stricted to the construction of the steep initial stretch of the south-northconnection and to the improvement of the existing roads with the use of theequipment purchased by the Administration in the early phase of the Plan.

77. Smooth evacuation of goods from the central plateau to the port ofUsumbura and across Lake Tanganyika to Kigoma and Albertville is essential tothe economic future of the country. Port facilities at Dar es Salaam have beenexpanded recently and the completion of the Kamina-Kabalo railroad has cut downtransport time to Matadi. By improving port installations at Usumbura and build-ing a better and safer road to the interior the Administration would createproper conditions for further development of the productive potentialities ofRuanda-Urundi.

Power

78. The water resources of Ruanda-Urundi are not yet developed and electrici-ty generated by diesel plants is very expensive because of the distances overwhich fuel oil has to be imported. Cheaper power would greatly benefit theRuanda mines, enabling them to compress production costs, extend the life of thedeposits by mining lower grade ore and, in certain instances, expand outputsomewhat at present prices and further if the price rose. It would also con-tribute to industrial development in and around Usumbura.

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79. After a delay of several years, vwork has recently started on a damand hydroelectric plant on the Ruzizi River just south of Bukavu. The project,which will ha.ve a capacity of 25,000 kw. is being built and financed withinthe Congo Ten-Year Plan by the Societe des Forces Hydroelectriques de lVEst,one of the two corporations controlled by the Concro Government and responsiblefor hydroelectric development in Belgian Africa. According to tuhe Ruanda-UrundiPlan, the Ruzizi plant was to supply the needs of both the northern miningregion and the Usumbura area by means of two high-voltage transmission lines.However, ideas have changed in the irtervening years. The present power programof the Administration provides only for the transmission line between Bukavuand Usumbura, with the Congo apparently paying one-half of the cost. The mineswill be supplied fron a separate 5,000 kw. plant to be built by Forces de lPEstat Taruka Falls between Lake Bulera and Lake Luhondo in the northwest of Ruanda.

80. The Taruka plant would be situated near the two largest wolfram minesand would be connected with most of the main tin mines by means of a 100 mileslong transmission line running southeast to the Kagera National Park. Theeconomic justification for this investment has not yet been fully demonstrated.Although the project is likely to result in substantial savings on fuel oil forthe existing diesel sets and increased earnings from tin output, further studycould still be usefully devoted to possible alternative solutions. However, theAdministration is arLicus to launch the Taruka project as soon as practicable soas to provide the mining companies with cheaper energy. Thus, the next fewyears should witness some progress in electricity generation and distributionin Ruanda-Urundi.

The Outlook for the Economy

81. Starting from nothing 30 years ago, Ruanda-Urundi has rmade remarkableprogress under Belgian administration. Given Turther Belgian support, develop-ment will continue, its pace slowied downr, on the one hand, by the necessity ofpreceding concrete measures by a period of persuasion and, on the other hand,by the rapid growth of population due to better health.

82. In some fields, production will expand with the normal measure ofofficial guidance and supervision; in others, its expansion will depend onsubstantial investment or much costly research. For coffee, the mainstay ofthe cash economy, a gradual but steady rise in production is expected in thenext 10 years, given continued expert assistance. The peasant is now used togrowing coffee and appreciates the income he derives from it. Future productionis conservatively estimated at 20,000 tons of green coffee in 1960 and 30-35,000tons in 1965. At present prices this would nean export earnings 24 times ashigh as in 1956. From then on coffee production seems likely to level off,unless new land is reclaimed in the valleys and food crops vacate some room onthe hill slopes. Cotton production in the Ruzizi Valley could probably, withthe expansion of the paysannat system, increase in the early 'sixties beyond3,300 tons of ginned cotton resulting in export earnings 50% over 1955, givenstable prices. However, a further increase, through the introduction of cottonin the Mlosso, is much less likely.

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83. It is much harder to forecast the ciances for progress in meat anddairy production. Only through a change in native mentality could cattlebecome a source of income and cease to detemidne social standing. This willbe a slow process. Even when persuasion and example have made the cattleowners realize the merits of rational animal husbandry, large-scale meat pro-duction will still face obstacles in the densely populated and intensivelycultivated country. On the other hand, prospects for marketing meat fromRuanda-Urundi in the Congo appear favorable in the long run. African meatconsumption will grow in the coming years and some of the traditional suppliersmay have to reduce exports to deficit areas in order to cater to the localpeople.

84. A large expansion in the output of tin and the associated metals atthe existing mines is unlikely. Nonetheless, cheaper power for pumping andcrushing operations would make it possible to work the ore bodies more com-pletely and penetrate the hard rock below the alluvi4a material which is nowbeing mined. Without cheaper power mineral production could progress onlyslowly, at least at the prevailing prices, and the alluvial deposits suitablefor hydraulic mining would approach exhaustion in 10 years from now. Obviously,prospecting could still lead to significant discoveries but it would be unwiseto count on this. The recently discovered copper deposit at Rushubi nearUsumbura is still being actively explored but does not as yet offer high hopes.

85. Industrial development is likely to be slow. The local market formanufactured goods is still very limited and costs are high owing to lowproductivity of labor and, in some cases, heavy transport charges on importedmaterials. The processing of local agricultural products appears more promising.There are some new ventures in this field in and around Usumbura but progresscan only be gradual.

86. In recent years, money income from wages and salaries has been of thesame order of magnitude as income from cash crops: somewhat higher or lower,dependent on the size of the coffee crop. The future points to a shift infavor of cash crops. Although wages are rising, employment prospects are notencouraging. In the mines expansion of output seems predicated on more machineryrather than more manpower. Light industries may need more aworkers, commercemore clerks and trucking firms more drivers, but the numbers will not be large.Some laborers from Ruanda-Urundi will be hired for the recently launched sugarcane growing and refining operations in the Ruzizi Valley and, in the longer run,development of the Congo border region might open up wider employment possibili-ties. Public works are likely to create new jobs in the near future and gradu-ally some Africans will take over administrative positions, starting with thelower echelons and working their way up. On the wjhole, however, agriculturestill offers the largest outlet for human productive effort.

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FINANMCIG POSSIBTL-T=SClaims on the TreasurYo7. To finance the Administration's investment proposals the Ruanda-UrundiTreasury would have to provide about frs. 1,8 billion over the next three yearsfor the extraordinary budget. According to very tentative cost estiLimates, theaverage annual expenditure of frs. 600 million would be distributed as follows:

millions of francs

Welfare and Administration 225Agriculture 75Transport 140Power 120Capital outlay outside the Plan 40

Additional claims on the Treasury may come from the ordinary budget. Ordinarybudget estimates for 1956 and 1957 lhcwf aubstantial deficits.

Available Funds

88. Cash payments to Ruanda-Urundi on account of the Belgian contributionamount to frs. 300 million in 1957 and frs. 400 million each in 1958 and 1959.The Ruanda-Urundi Treasury will thus have frs. 1l1 billion to meet the require-ments of the extraordinary budget in the next three years. About frs. 700million will be lacking and unless Ruanda-Urundi gains access to additionalsources of capital the proposed investment would have to be cut doamn. Forpolitical reasons' a cut is more likely to affect agriculture, transport orpower than social services.

89. The Belgian Government does not initend to increase its regular contri-bution to Ruanda-Urundi and the Congo Government is itself borrowing in orderto carry on with its oin investment program. Although the possibility of Ruanda-Urundi discounting some of the Belgian Treasury certificates with the Congocannot be precluded, such a transaction would only reopen the gap in later years.The Administrationts credit margin of frs. 200 million at the Banque Centraleshould clearly be considered as a source of temporary accomnodation in the eventof the inability to cover the ordinary budget deficit from its own balances.

Borrowing Capacity

90. Whether Ruanda-Urundi could borrowi in Brussels or elsewhere seems doubt-ful. So far it has never borrow-yed, except from the Belgian Government onspecial terms. In fact, the capacity of the Administration to provide for debtservice in its ordinary budget raises some misgivings. Although it is not at allcertain that the fiscal year 1957 will close with the substantial ordinarydeficit uTritten into the budget bill, prospects for a balance over the next fewyears are at best dubious. Ordinary expenditure will feel the effect of publicinvestment much sooner than ordinary revenue and in the short run expenditureis likely to rise more steeply than revenue. In the next few years the increasein the proceeds from export duties on coffee and minerals, from import dutiesand from the income tax may not be sufficient to pay for the cost of maintaining

- 20 -

and operating the new public facilities, particularly when costly Europeanpersonnel is needed to operate them. In these circumstances, Ruanda-Urundicould hardly borrow on its oun credit.

91. The Belgian Government is prepared to back up with its guarantee thecredit of Ruanda-Urundi. Belgium has subsidized the ordinary budget of Ruanda-Urundi during the lateltwenties and early 'thirties, and to do it again in caseof need would not mean a new departure. Financial stability and economicprogress of the Trust Territory are anyhow the responsibility of the Administer-ing Authority and in making a loan the Bank would be supporting Belgium'sefforts to develop Ruanda-Urundils resources and improve the lot of its inhabit-ants.

92. Once the Ruanda-Urundi Treasury has made Congolese francs available fordebt service their conversion into foreign exchange should not cause any diffi-culty. By virtue of its economic linlks lith the Belgian Congo, Ruanda-Urundishares in the external financial strength of its very much larger, more advancedand rapidly developing neighbor, The two countries form one territory in whichone currency circulates and goods move unrestricted. They have a common mone-tary reserve and settle their accounts with foreign countries as one unit. Anappraisal of the external position of the Belgian Congo and Ruanda-Urundi isgiven in the appendix.

- 21 -APPEIDIX

THE EXTERNAL POSITION OF TIEB BELGIAN CONGOAiD RUANDA-UR-PIDI

93. The Belgian Congo is by far the preponiderant partner in the customs union.Its share of imports and exports of goods, services and capital probably amountsto 95% of the total. While it is true that the Congo continues to be primarilya supplier of raw materials, it produces a wide variety of minerals and agri-cultural commodities essential to the outside world. Its main export, copper,brings in annually the equivalent of about $200 million. It is followed bycoffee, cobalt, palm oil, cotton, tin and diamonds, each earning annually theequivalent of 425 to $40 million, and by many other products. The spread of riskis thus substantial. For Ruanda-Urundi, exclusively dependent on the vicissi-tudes of the coffee and tin markets, the integration into the Congots diversifiedexport pattern is of very real significance.

The Balance of Payments

94. In the past thirty years, the volume of the principal exports has expandedsteadily. Exports of copper very nearly doubled, those of industrial diamondsincreased about ten times, those of rubber sixteen times and those of coffeefifty times. Several minerals, among them uranium and manganese, have beenadded to the export list and, while the tonnage of agricultural exports doubledbetween 1936/38 and 1956, the tonnage of mineral exports quadrupled. In presentday francs, exports have risen ten times since the 'twenties, to reach $612million in 1956.

95. Imports have also grown spectacularly in the past thirty years. Due tothe favorable development of the terms of trade, however, foreign trade hasconsistently shown a surplus since the great depression. In the past eightyears, for which data are available, imports of equipmlient, building materialsand fuel increased two and a half times to meet the needs of expanding invest-ment and output. Consumers goods imported mainly for Europeans followed thegrowth of the white population; their ratio does not appear excessive at 14-18%of the import bill, particularly in view of rising demand for them of African"evolues'". Imports for African mass consumption showed the slowest gain, owingto the expansion of local manufacturing industries.

96. Freight and insurance, interest and dividends, government and corporatetransfers, and private remittances make up the large service component of thebalance of payments. In 1956, services accounted for $402 million in paymentsand $85 million in receipts, roughly twso and a half times 1951 figures. Since1952, service payments have wiped out the trade surplus and brought about acurrent account deficit of about $40 million annually in the four years 1952-55and nearly double that amount in 1956.

97. It is only natural that the Belgians, who have opened up and developedthe Congo and Ruanda-Urundi, should play a preponderant role as suppliers,shippers, investors, bankers and brokers to these territories. The customs unionhas a substantial current deficit with Belgium covered by current surpluses withthe industrial countries of Western Europe and North America. In consequence,it has been paying for a part of goods and services supplied by Belgium withdollars earned from the United States, Canada and the E.P.U.

- 22 -

98. A balance of payments deficit on current account is a normal symptom fora developing economy., made possible by an influx of capital. In 1950, the Congoand Ruanda-Urundi began borrowing abroad to finance investment under theirdevelopment plans. At about the same time, the private capital started movingfrom Belgium into the Congo at a larger rate, Although there was a net outflowof private fumds in 1953, 1954 and 1956, pub-ic borrowing continued unabated,exceeding the equivalent of $330 million by the end of 1956. The current deficitof the balance of payments in the years 1952-56 was thus primarily financed byloans contracted by the Congo and Ruanda-Urundi.

Nionetary Reserves

99. Long-term capital not only financed the excess of current payments overcurrent receipts but also added to the gold and foreign exchange holdings of theBanque Centrale, Between July 1, 1952, when the Banque Centrale began operations,and December 31, 1956, its holdings rose by the equivalent of $58 million to theequivalent of $195 million, about $16 million of the increase being accountedfor by local gold production. Since Belgian franc assets shrank to a minimumworking balance during the same period, nearly the entire $195 million wasrepresented by gold and fully convertible currencies. This amount would sustainthe current external payments of the Congo and Ruanda-Urundi for about threemonths.

The External Debt

100. At the end of 1956 the external public debt of the Belgian Congo wasequivalent to $341 million, including $2 million in Belgian franc Treasury bills.Of this total, $33 million is owed in dollars, $62 million in Swiss francs and$246 million in Belgian francs. In addition, the Congo services two NSA loansto Belgium, amounting to $16 million and spent on colonial projects. The externalpublic debt of Ruanda-Urundi is exclusively to the Belgian Government.On December31, 1956, it consisted of the equivalent of $46 million in interest-free Belgianfranc advances with no fixed repayment date and of $0.4 million in Belgian francTreasury bills.

101. A special feature of the Belgian Congo debt, attaching to all publiclyissued Swiss franc debt and to all Belgian franc bonds issued since 1950, isthe option, granted to the holder, to ask for payment of interest and principalin Congolese francs at the offices of the Banque Centrale in the Congo and Ruanda-Urundi.

Transfer of Interest and Amortization

102. If no allowance is made for Belgian or Swiss bondholders requesting pay-ment in the Congo, the estimated annual service payments on the existing long-term external public debt of the customs union fluctuate between 4$21 and $31million equivalent in the next fifteen years, with the exception of 1960 whenthey reach a peak of $48 million because of the scheduled redemption of a Belgianfranc issue. After 1971 the service payments decline rapidly. Compared withthe present rate of current external earnings of the customs union, the estimateddebt service payments remain below 5%, except for 1960 when they reach 7%. This

- 23 -

is a moderate ratio and even substantial future borrowing should not raise itvery much higher, if current external earnings go on increasing at the rate of10 per annum1 as they have in recent years.

104. Estimated dollar and Swiss franc service payments of between Z5 millionand $10 million annually in the next twenty years also compare favorably withthe present current earnings of some $150 million a year from the United States,Canada and Switzerland.

105. In these circumstances, it would appear that interest and amortizationon a Bank loan of the size under consideration wsould hardly affect the externalfinancial position of the Congo and Ruanda-Urundi. The Banque Centrale shouldexperience no difficulty in furnishing Ruanda-Urundi with the foreign exchangerequired for debt service.

Table 1

Ruanda-Urundi

Population Statistics

African Populat4sn

Within tribal In towns and min-organization ing settlements Total

1935 3,385,000 19,000 3,404,0001940 3,815,000 399000 3,854,ooo1945 3,386,ooo 48.,000 3,434,000 11950 3,905,000 53,000 3,958,ooo1955 4,297,000 75,000 4,372,000

European Population

Private Settlers, WithoutAdministration Missions employees merchants occupation Total

(mainly womenand cnildren)

1935 160 302 128 47 256 8931940 169 436 210 108 573 1,4961945 216 460 233 185 768 1,8621949 358 565 385 425 1,674 3,4071955 629 874 670 847 3,032 6,o52

Arab and East Indian Population

WithoutTradesmen Craftsmen Clerks occupation Total

(mainly jwomenand children)

1935 99 19 107 -479 7041945 272 29 170 1,392 1,8631955 443 55 132 1,858 2,498

Population in the main centers

1938 1950 1955Euro- Euro- Euro-pean Asiatic African pean Asiatic African pean Asiatic African

Usumbura 389 274 6,617 1,491 972 16,362 2,643 796 39,879Kitega 70 104 -880 120 108 1,965 162 133 2,532Kigali 63 68 1,215 133 103 2g575 226 100 2,789Astrida 62 42 220 243 150 2,423 406 177 2,015Kisenyi 45 14 328 219 110 1,529 228 151 2,422

1/ 1944 was a famine year.

Source: Plan Decennal, 1951; Reports to the U.N. on the administration ofRuanda-Urundi; Evolution economique du Ruanda-Urundi de 1949 a 1955.

Table 2

Ruanda-Urundi

Agriculture

Use of land in 1955sq. Iml %

Arable land 22,440 41.4Pasture 17,539 32e5Forests and afforested area 2,079 3.9Mining concessions 85 0.1Uncultivable 12,029 22.1

54,172 100

Agricultural Production(in thousand tons)

1930 1940 1945 1950 a5!

Manioc 271,2 367.2 558.2 918.7 2,086.3Sweet Potatoes 837*8 870.0 895.0 1,027.5 1733.0Bananas n,a. n.a. nea. 1,030.7 1702.4Peas and beans 189.8 216.2 191.8 276.8 303.8Sorghum 14.0 128.4 124.4 157.5 192.8Maize 24.3 60o5 71.7 109.6 133.2Wheat - - 13.5 9.5Rice _ - - O06 0.7Peanuts n.a. n.a. n.a. 4.6 7.4Castor beans n.a. n.a. 18 2c4 1.2Tobacco o.6 1.4 1.1 1.0 2.0Cotton (seed) 0.3 3.6 2.4 3.2 7.3Coffee (parchment) 0.2 6.3 5.1 12.7 21.7Pyrethrum - na. 1.3 1.0 1.2

Value of Agricultural Production(in million francs)

Foodcropsgrown by natives 6,595 2/grown by others 8

Cash cropsgrown by natives 656grown by others 57

l/ It is generally agreed within the Administration that thesefigures overstate the production of food crops.

2/ An adjustment by the Ten-Year Plan Office of the figure computedby the Agricultural Service.

Source: Reports to the U.N. on the administration of Ruanda-Urundi;Bulletins of the Banque Centrale.

Table 3Ruanda-Urundi

Mining

Volume of Out;,ut

(in tons)

1933 1940 19145 1950 1955

Gold (fine) in kgs. 99 848 270 236 137Cassiterite 527 24426 1,585 2,340 2,225Cassiterite-tantalite-columbite - 13 10 29 686Tantalo-columbite - 2 3 8 120Wolfram - 49 135 165 790Bastnaesite - 3 - 54 324Amblygonite - - - - 1,353Beryl - - - - 137

Value of Output(in million francs)

1950 1955

Gold 14.2 7.8Cassiterite and cassiterite-tantalite-columbite 154.2 188.8

Tantalo-columbite 0°3 29.3Wolfram 11.4 88.2Bastnaesite 0.5 8.1Amblygonite - 5.4Beryl - 2.3

180.6 32909

Africans employed in Mines in 1955

Individual Union MiniereINinetain Georuanda Somuki Corem operators (vocational training)

3,890 2V207 3,493 639 3,289 103

1/ Average of men at work

Source: Bulletins of the Banque Centrale; Reports to the U.N. on the adminis-tration of Ruanda-Urundi; Evolution economique du Ruanda-Urundi de1949 a 1955.

Table 4

Ruanda-Urundi

Transport Statistics

Roads(in kilometers)

All-weather roads Dry-season roads

principal secondary and trails

1944 230 1,753 n.a.

1950 354 2,229 7,537

1955 345 2.,274 8,306

Motor Vehicles

Cars Trucks !Pick-ups

1939 298 159 n.a.

1947 433 479 n.a.

1952 1,237 1,063 724

1955 ,1,763 1,017 2/ 791

Freight Traffic at the Port of Usumbura(in thousand tons)

1945 1950 1955

Loaded 20.5 20,7 38.6

Unloaded 27.0 68.o 129.7

Total 47.5 88.7 168.3

1/ In recent years, the carrying capacity and utilization of truckshas increased.

Source: Reports to the U.IN. on the administration of Ruanda-Urundi;information obtained from the Ruanda-Urundi Administration.

Table 5Ruanda-Urundi

Trade

Principal Export Cornrodities(in million francs)

19h5 1950 1951 1952 1953 1954 1955 1956

Coffee 77 485 741 595 575 583 762 701Ores and metals 57 156 266 261 355 220 297Livestock 19 1ll 128 150 1345 147 141Hides 12 64 74 61 63 54 53Cotton 13 35 57 48 76 54 72

inage and Value

Imiports Exports and re-exports000 tons million frs. 000 tons million frs.

1920 1.11930 9.2 57.5 2.8

1935 7.6 38.5 10.4 45.01940 14.5 75.4 26.2 158.91945 26.4 -221.4 46.3 229.91950 79.8 1,174.9 70.4 1,082.91955 1147.8 2,005.7 109.8 2,006.1

Regional Pattern(in million francs)

Imports Exports anc r-,-exportsCongo Belgium U u. S. Other Congo Belgium i U. S. Other

1939 19.9 13.2 4.4 42.6 3L.2 69.4 0.1 14.81946 162.8 48.1 53.7 63.9 84.0 83.2 63.9 103.71951 471.7 259.2 236.1 423.5 317,8 490.6 566.0 145.41952 573.9 264.8 351.7 458.2 385.6 438.5 460.9 67.01953 682.9 253.9 267.7 320.5 471.9 458.2 41.2 99.11954 859.0 275.8 234.4 468.8 681.9 304.9 270.7 355.6 /1955 1,057.8 229.0 240.1 478.8 749.5 432.0 372.7 451.9 J

1/ Belgo-Luxembourg Economic Union.

Includes frs. 292 million -wath of goods exported tcrTangaTyika for futureshipment overseas, primarily to the U.S.Includes frs. 214 million worth of goods consigned to Usnmbura and Dar esSalaam for future shipment overseas, primarily to the U.S.

Source: Reports to the U.N. on the administration of Ruanda-Urundi;Bulletins of the Banque Centrale.

Table 6

Ruanda-Urundi

Public Finance

Ordinary Budget(in million francs)

Revenue 1950 2/ 1956 El Expenditure 1950 2/ 1956 2

Personal tax 8.8 18.0 AdministrationIncome tax 38.2 103.9 and justice 63.8 130.4Customs and excise 130.2 217.4 Ilealth 54.0 119.5Native tax 72-3 122.9 Education 32.1 3149.8Cattle tax 22.2 49.2 Agriculture 104,2 2144.3 3/Other taxes 8.9 19.5 Public works andAdministrative receipts 98.8 107.0 3J Transport 47.2 108.9Participations 6.5 2.2 Other economicGovernment corporations - 760 and social 17.8 37.0

Armed forces 9.3 15.9Total 385.9 6 47.1 Public debt 0.5 18.4

Pensions 1.5 10.2Other 4.8 11.9

Total 335.2 746.3

Overall Budget Results(in million francs)

Ordinary surplus Extraordinary Overallor deficit surplus or deficit surplus or deficit

1941 + 36.8 + 005 + 37*31945 + 14.4 - 25.4 - 10.91950 + 50.& - 152.7 - 101.91951 +128.6 + 32.9 + 161.51952 + 79.8 - 159.7 - 79.91953 + 35*5 + 173.1 + 206.619514 29,9 - 339.8 - 369.71955 , Oe5

Results.2/ Estimates.3/ Includes payments, in the amount of frs. 61 million in 1950 and frs. 40

million in 1956, levied by customs officers on behalf of the Office desCafes Indigenes du Ruanda-Urundi and passed on to it periodically tocover allocations to the coffee equalization fund and operating expenses.

$ource: Ruanda-Urundi budgets as presented to the Belgian Parliament;reports to the U.N. on the administration of Ruanda-Urundi.

Table 7

Ruanda-Urundi

Expenditure on the Ten-Year Plan(in million francs)

1952 1953 1954 1955 1956 J Total

I. Government

Road transport 12 38 80 47 60 237Water transport 4 - 9 3 3 19Air transport 2 3 2 2 15 24Agriculture and

animal husbandry - 4 8 11 36 59Administrative buildings

and housing forpersonnel Z/ 13 100 72 74 108 367

Telecommunications 7 5 2 4 5 23Research - 6 1 12 1 20Education 20 37 28 71 28 184Public health 22 15 14 16 11 78Welfare _ - _ 1 1

Total 80 208 216 240 268 1,012

II. Public Organizations 31

Regideso - water andelectricity distri-bution 17 34 27 66 29 173

OCA - native housing 13 30 62 62 50 217Ineac - agricultural

research - 7 17 10 )Irsac - scientific ) 15 65research - 5 5 6 ) _

Total 30 76 IIl 144 94 455

Overall total 110 284 327 384 362 1 467

1/ As estimated in fall 1956.2/ Includes expenditure on housing for European and African personnel work-

ing in the various services of the Administration.3/ Funds received from the Administration but not always entirely spent

during the year.

Source: Information obtained from the Ruanda-Urundi Adainistration.

Table 8

Belgian Congo and Ruanda-Urundi

Development of Principal Exports

Annualaverages Copper Cobalt Zinc Tin Manganese Diamonds

000 tons OOOtons metal content metal content ore industrial and gems

000 tons 000 tons 000 tons million carats

1926-30 111 0.5 1/ - n.a. _ 1Q61931-35 112 0.2 / - n.a. - 3.21936-40 152 0.9 1/ n.a. 3 11 3.8

1941-45 186 2,0 1/ n.a. 10 13 8.61946-50 161 3.9 2/ 66 4/ 11 15 8.31951-55 211 7.5 3/ 85 15 180 12.1

Annual Palm andaverages Coffee Cocoa Cotton Palm kernel oil Rubber Timber

000 tons 000 tons 000 tons 000 tons 000 tons 000 tons

1926-30 0.7 0.9 7 26 5/ 1,2 71931-35 8.5 1.1 16 46 -/ 0.3 181936-40 17.0 1.2 32 67 §/ 1.0 501941-45 19.9 1.3 33 86 6.0 321946-50 27.8 1.8 48 120 5.7 861951-55 35.7 2.6 44 162 19.1 141

Value of Principal Exports in 1955in million francs

Copper 8,041 Rubber 797Coffee 2a044 Zinc 561Cobalt 1,974 Timber 327Palm and palm kernel oil 1,893 Manganese 320Cotton 1,596 Cocoa .150Tin 1,441 Other 2 791Diamonds 1,208 Total

1/ Saleable production./ Production of recoverable cobalt.

3/ Exports in metal content.1j 1948-50 annual average.Y Palm oil only.

Source: Plan Decennal du Congo 3elge, Statistics, 1949;U. S. Bureau of Mines - Minerals Yearbook 1952;Bulletin of the Banque Centrale;Bulletin of the Banque du Congo Bclge.

Table 9Belgian Congo and Ruanda-Urundi

Foreign Trade(in million francs)

AnnualAverages 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 + 21499

Regional Pattern ofL Trade(in billion francs)

Imports Eorts 1/Belgium 2/ U.S. Other3/ Belgium 2/ U.S. Other 3/

1951 6.2 3.4 5.8 8.7 307 7.7

1952 7.8 4.9 7.4 7.2 3.9 9.3

1953 7.3 4.2 6.7 4.6 4.2 11.8

1954 6.7 3.5 8.3 5.0 4.6 10.9

1955 6.9 3.6 9.5 6.o 5.3 12.11956 7.2 4.2 9.3 6.9 5.9 14.6

1/ According to the final destination after processing inBelgium and in the U.K.

2/ Belgo-Luxembourg Economic Union.3/ France, the U.K., Germany, the Netiherlands, Italy and

the Union of South Africa are the leading trade partnersin this category.

Source: Plan Decennal du Congo Belge, Statistics, 1949;Annual Reports of the Banque Centrale.

Table 10Belgian Congo and Ruanda-Urundi

Balance of Paynents(in million dollars)

Overall

Current Long-term Short-term

Goods g)/ Services balance capital capital 2/ Total

1951 + 137.6 - 110.4 + 27.2 + 15e3 + 31.9 + 7404

1952 + 94.8 - 130.8 - 36.0 + 64.5 + 10.1 + 38.6

1953 + 115.2 - 148.6 - 33.4 + 54.5 - 4.6 + 16.5

1954 + i51.8 - 19414 - 39.6 + 43.8 - 32.9 28.7

1955 + 205.4 - 246.2 _ 1o.8 + 59.4 - 31.0 _ 12.414/1956 + 240,3 - 317,5 - - 7702 + 74.0 + 26.9 + 23.7

With Belgium

Current long-term ShorttermGoods ( Services balance capital capital / Total

1951 + 51.2 - 7645 - 25.3 + 14.3 - 11.0

1952 - 7.1 _ 8714 - 94*5 + 16.7 -- 77.8

1953 - 48.i - 11.2 -159.3 + 14.7 - -l144.6

1954 - 2307 1 352.5 -176.2 + 35.2 - 03 -141.3

1955 - 12.2 - 198.6 -210.8 + 60.8 - 32.6 -182.61956 - 6.8 - 256.6 -263,4 + 65.2 + 29.4 -168.8

With the United States and Canada

1/ Current Long-term Short-termGoods - Services balance capital capita- Total

6/19517 + 23,8 - 0.8 + 23.0 + 2.5 -11.0 + 14*5

1952 + 12.9 - 9.6 + 3.3 + 1o.6 - 4.3 + 9.6

1953 + 41.7 - 1.2 + 40.5 + 6.7 - 2.0 + 45.2

1954 + 53.0 + 0.3 + 53,3 + 1.0 - 2.8 +, 5i,5

1955 + 58.5 - 1.7 + 56.8 - 2.3 + 0.2 + 514.71956 + 65.5 - 2.5 + 63.0 _3.3 - 2.0 + 57.71/ Including non-monetary gold. 2/ jMrceis errors and omi8sionrs.3/ Includes sales to the Banque Centrale of locally mined gold.

O/ Of which $128 million net expenditure on transport and insurance, and $88

million net payments of interest and dividends.5/ Belgo-Luxembourg Economic Union. / U.S. only.

Source: Bulletins and annual reports of the Banque Centrale.

Table 11Belgian Congo and Ruanda-Utun&L

Gold and Foreign Exchange Holdings 1/ of the Banque Centralesince its inception

(in million dollars)

ConvertibleGold currencies Total Belgian francs

July 1 1952 60.2 29.9 90e1 47.0Dec. 31, 1952 65.3 58.8 124.1 15.3Dec. 31, 1953 85.9 90.0 175.9 9.9Dec. 31, 1954 114.7 65.9 180.6 9.7Dec. 31, 1955 115.9 75.8 191.7 5.0Dec. 31, 1956 122.2 67.8 190a0 4.4

Note: Holdings of non-convertible currencies are small.

T.v*teral Public Debt(in million dollars)

1951 1952 1953 1954 1955 1956Long-term

Belgian Congo 2/Dollars and Swiss francs - 13:9 419 73.5 81-4 61.4 95.1Belgian francs 4 61 45.9 45.6 45.2 44 2 74.2Belgian or Congo francs 46.5 46.5 46.5 90.9 133.0 169.6

Ruanda-Urundi /Belgian francs 6.o 14.0 22-0 30.0 38.0 46.o

Short-term

Belgian CongoBelgian francs 12.0 10.0 10.0 6.o 4.0 2.0

Ruanda-UrundiBelgian francs 0.4 . o4 o04 0.4 o.4 004

1/ Net./ Excludes two MSA credits to Belgium (new totaling $16.3 million) serviced by

the Congo.3/ Interest free advances from the Belgian Government with no fixed repayment date.

Source: Bulletins and annual reports of the Banque Centrale; Ministry of Colonies;La Situation Economique du Congo Belge.

Table 12

Belgian Congo

Long-term Public External Debt as of December 31, 1956

(in dollars)

212% 1887 perpetual debt - Belgian francs 3,5684 so 1896/98 perpetual debt - Belgian francs 164,2424 % 1901-2000 redeemable bonds - Belgian francs 5 8 9, 8 403 % 1904 perpetual debt - Belgian francs 469,1604 % 1906 perpetual debt - Belgian francs 1,307,0044 % 1909-2000 redeemable bonds - Belgian francs 98,4904 % 1936-1981 redeemable bonds - Belgian francs 12,142,7903'eo 1937-1997 redeemable bonds - Belgian francs 2,033,9904 % 1937-1997 redeemable bonds - Belgian francs 2.,847,5004 % 1948 perpetual debt - Belgian francs 244,000,0004 % 1950-1960 redeemable bonds - Belgian or Congolese francs 21,238,2004 % 1950-1960 Treasury certificates - Belgian or Congolese francs 19,995,6004 ' 1950-1970 external loan - Swiss francs 13,920,00041 ?% 1951-1976 BRRD loan - U. S. dollars 32,854,5004-2% 1951-1976 IBRD loan - Swiss francs 79,14,X5004 % 1952-1976 external loan - Swiss francs 13.800,0004 % 1953-1978 external loan - Swriss francs 13,680,0004A% 1954-1974 redeemable bonds - Belgian or Congolese francs 44j4oo400,000414% 1955-1967 redeemable bonds - Belgian or Congolese francs 42,000,0004 j% 1956-1971 redeemable bonds - Belgian or Congolese francs 42,000,0004 % 1956-1976 external loan - Swiss francs 13,680,00042i% 1956-1976 loan by the Belgian Government (counterpart of 1951

IERD loan to Belgium) - Belgian francs 30J;000,0004 % 1927-1974 "Unatra" bonds guaranteed and serviced by the Belgian

Congo - Belgian francs 5402000

Total 3389910,384

22% 1950-1970 MSA loan to Belgium, serviced by the Belgian Congo -U. S. dollars 1,106,545

3]-% 1951-1976 NSA loan to Belgium, serviced by the Belgian Congo _U. S. dollars 15,214,958

Source: Information obtained from the Ministry of Colonies.