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TanzaniaA Political Economy$

Andrew Coulson

Print publication date: 2013

Print ISBN-13: 9780199679966

Published to Oxford Scholarship Online: September 2013

DOI: 10.1093/acprof:oso/9780199679966.001.0001

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Introduction to the Second Edition: The Political Economy of Tanzania Revisited

Introduction to the Second Edition: The Political Economy of Tanzania Revisited

(p.3) Introduction to the Second Edition: The Political Economy of Tanzania Revisited

Andrew Coulson

Oxford University Press

The period covered by this book ends in 1980, just as the consequences of the Opec-induced rises in the price of oil, and the declines in commodity prices associated with world recession, started to click in. Tanzania’s problems were exacerbated by the failed industrial and agricultural policies which are discussed in Chapters 22 and 231, and commitments to repay debt, with much of this debt being a consequence of ‘aid’ received in the previous ten years. During the subsequent twenty-five years, most of the discussion about Tanzania, and other countries in Sub-Saharan Africa, was about the ‘structural adjustment’, imposed on African countries by the International Monetary Fund and other Western-dominated institutions as a means of correcting their financial deficits.2 Only now are new opportunities on the horizon, made possible by the country’s emerging position as a leading exporter of gold, other minerals, and gas.

In November 1979, a delegation from the IMF pointed out that Tanzania would have to retrench, and recommended a devaluation of its currency. President Nyerere brusquely refused. To follow its advice would mean reversing Tanzania’s modest progress towards equality and socialism. Similar advice would have detrimental effects in many other parts of Africa. In taking this stand, Nyerere had support from a wide range of economists and political scientists, including many who were critics on other matters. These included the Cambridge (p.4) economist Ajit Singh who pointed out that if all available foreign exchange was allocated by the government to priority uses, and the prices of all exported items were fixed by the government, devaluation was not necessary (Singh 1982; 1986). The Minister for Finance and Planning, Kighoma Malima, a professor of economics, used similar arguments but also pointed out the unfairness of the international system: ‘In 1973 … we needed no more than 5.4 tons of tea in order to purchase one tractor, while in 1983 the same tractor required us to export 10.1 tons of tea’ (Malima 1986: 129). A group at the Overseas Development Institute in London (Killick et al. 1984a and 1984b) recognized that there was a need for adjustment but argued that it should be undertaken cautiously, over a number of years.3 A team of economists convened by Gerry Helleiner but also including Sam Wangwe, Brian van Arkadie and John Loxley, endeavoured to mediate between the IMF and the Tanzanian government, and to bring about adjustment over a longer period.4

Meanwhile the situation in Tanzania deteriorated, reaching a low in 1983, when shopkeepers and traders were blamed for the shortages. In the following years there were a number of modest devaluations, and some freeing up of foreign exchange restrictions—but insufficient to satisfy the IMF. Inflation was 36% in 1984 (Edwards 2012: Table 6), there were black markets in food and many consumer items, and chronic shortages of fuel. Civil servants and teachers who could not live on government salaries had to find other sources of income—from small businesses conducted on the side, or petty corruption. University professors moved abroad or into private consultancy.

In 1985, five years later, Nyerere stood down as President, and the following year his successor, President Ali Hassan Mwinyi, signed Tanzania’s first Standby Agreement with the IMF and devalued its currency so that one US Dollar was worth 40 Tanzanian Shillings instead of 17. The economic position of the country gradually improved. But the cuts in government spending that were agreed with the IMF undermined many of the achievements of the Nyerere years—near-universal primary (p.5) education, a network of health centres in reach of most of the population, rural water supplies, availability of fertilizers and agricultural inputs.5

After retiring as President, Nyerere spent most of his time in his home village, Butiama, in Mara Region to the East of Lake Victoria. But his influence continued through his many friends and contacts, and his international work, as Chairman of the South Commission, the ‘intergovernmental policy think-tank of developing countries’, from 1987–1990, when it produced its influential report The Challenge to the South. He was increasingly critical—as in some of his answers at a press conference shortly before the 1995 election, when he accused Mwinyi’s government of corruption, tribalism and of condoning religious differences, and asked Tanzanians to vote for a leader who would honour the country’s constitution.6 He died in October 1999, of leukemia.7

In 1995, in the first post-Independence election contested by more than one political party, Ben Mkapa was elected President. Most of the agricultural and manufacturing enterprises under state control were rapidly privatized. Many of the larger complexes, including the oil refinery in Dar es Salaam and most of the textile factories, subsequently closed.8 There were investments in infrastructure and mining, and in primary health care, decentralized to district administration. Primary school enrolment, which reached 97% of children in Nyerere’s years, but fell sharply in the 1980s, increased again, especially after primary school fees were abolished in 2000, and many new schools were built. Each primary school was also required to have at least one pre-school class. There was some expansion in secondary school provision, mostly from the private sector.

Mkapa campaigned against corruption. One of his early acts was to set up the Warioba Commission, which found corruption to be rampant in the police, the legal system and the civil service (Mtatifikolo 2002: 341–5). Dealing with it was another matter, especially when it became clear that there was high level corruption in contracts for (p.6)

Introduction to the Second Edition: The Political Economy of Tanzania Revisited

Map 1 Tanzania in Africa

Source: Len Berry (ed.) Tanzania in Maps, University of London Press, 1971.

(p.7) electricity generation in Dar es Salaam (the Richmond, later Dowans contract); an air traffic control system for Dar es Salaam (the Radar contract); in contracts for roads and buildings, including new offices for the Bank of Tanzania—the ‘twin towers’; and in embezzlement of foreign currency also from the Bank of Tanzania (Cooksey 2010: 119; Havnevik 2010: 270; Nyang’oro 2010: 206–211; Cockcroft 2012).

In 2005, Jakaya Kikwete succeeded Mkapa as President,9 and a large proportion of Tanzania’s debts were written off under the Multilateral Debt Relief Initiative. The economy was already growing—led by mining and tourism, and manufacturing exports to other African countries, though not the traditional agricultural exports. Mobile phones spread to every population centre. The internet (with fast connections installed along every main road) became widely available. Travel and transport was easier as tarmac increasingly replaced earth roads. Tanzania was becoming a more connected, more open country, with a lively press and some frank debates in its parliament. Exchange controls were largely removed. Donors were impressed. Public sector salaries were raised. Private investment flowed in, especially from South Africa in mining, tourism, hotels, mobile phones and shopping malls, and from China in construction, infrastructure, mining and agriculture.

However, much of the benefits of this growth went to the salaried elite—with little impact on poverty in many parts of the country. Many Tanzanians felt that the ruling party was not articulating a vision for the country as a whole, or dealing robustly with corruption.10 In 2008, Kikwete forced the resignation of his friend and prime minister, Edward Lowassa when it became clear that he was close to the Richmond (or Dowans) scandal (Nyang’oro 2010). There was a decline in turnout from 72% to under 43% when Kilwete was re-elected in 2010, with the support for him falling from over 80% to 63% of those who voted. Once again, as in the 1970s, there was discussion in the press and in the universities about the contradictions in the country, and in (p.8) particular about whether the companies involved in mining were paying their fair share of taxes.

Civil society became more complicated. The major donors supported government projects through ‘basket funding’, under which resources were pooled and allocated to programmes worked out by the government. But alongside this many Non-Government Organizations supported schools, hospitals, health campaigns, ‘orphans’ or those with diseases or long-term problems, especially in rural areas. Other organizations were the outcomes of foreign technical assistance over the fifty years since Independence, where external governments had supported projects connected with innovation or technology and left them to continue on their own. New organizations, independent of the government, undertook research, consultancy and lobbying. Compared with some of these, the civil servants were ill-equipped—and often found it hard to effectively challenge politicians or to develop their own thinking, or to make best use of the plethora of advice coming from the NGOs, the press and consultants commissioned by foreign governments or multilateral agencies.

Tanzania was increasingly urban. Dar es Salaam was a small town of 276 000 in 1967, and more than three times that size in 1980. By 2012, it housed around four million people and rising. Its roads, supplies of water, and sewerage, as well as its housing, struggled to keep pace.11 The population of the country as a whole was around twelve million in 1967, and double that in 1988. By 2012, it had probably doubled again to around forty-five million. Despite the rapid urbanization, over 80% of Tanzanians were still living in rural areas, although many of these people were finding it hard to make a living.12 Almost half were under fifteen. Back in the 1970s, academics (p.9) such as Gerhard Tschannerl had argued against attempts to limit population growth. They were proved correct insofar as the country was able, broadly, to feed its growing population13, though the quantities of agricultural exports declined and the future prospects for agriculture in Tanzania continued to be hotly debated. Meanwhile global warming was having an impact, though less on Tanzania than on Northern Kenya or Ethiopia, or countries in West Africa close to the Sahara; it threatened low lying areas of Dar es Salaam and other coastal areas with flooding, while making the rainfall across the whole country even less predictable.

The financial crises in most of the Western world led to unprecedented demands for gold. Tanzania has gold in many places, though often in small quantities, and it is not particularly cheap to extract. At the end of the 1970s gold mining nearly ceased altogether. But by 2000, Tanzania’s main source of foreign currency was from exports of gold, and by 2010 there were five large mines and many smaller ‘artisanal’ mines, providing incomes to as many as 700 000 miners (Tanzanian Affairs 1999; Roe 2012; Bryceson and Jønsson 2012). The country became one of the continent’s most important exporters of gold, after South Africa and Ghana.14 It also continued to export diamonds and gemstones. Tourism flourished—the country was evidently more stable and safer than Kenya. Exports of manufactured goods, mostly to neighbouring countries, grew to exceed (in terms of value) exports of agricultural products. At the same time, China’s rapid industrialization created shortages of many of the minerals which happen to be found in Tanzania, and gas suddenly became a key source of energy for many countries which do not have oil—large quantities of gas and smaller quantities of oil were discovered in the South East of the country and off-shore. By 2012, plans to extract coal, iron ore, uranium, soda-ash, rare earths, nickel and related minerals, and to develop both hydro and thermal sources of electricity were well advanced, as well as one of the largest natural gas export projects in the world.

(p.10) Overseas investors also became interested in large-scale agriculture. The efforts of America and some other developing countries to lessen their dependence on oil led to subsidies for biofuels. Tanzania (along with other African and South American states) had land where they can be grown (Chachage 2010a, Table 1; 2010b; Havnevik and Haaland 2011). Floods in Pakistan, droughts in the US, rising incomes in China and elsewhere, and problems maintaining the productivity gains of the green revolutions in Asia, not least with large-scale irrigation, led to unprecedented high prices for staple foods—and Tanzania has the potential to produce surpluses of maize and rice. Suddenly, from many parts of the world, investors wanted to get their hands on Tanzanian land.

Overall, the result was that by 2010, Tanzania had become ‘the leading non-oil destination for Foreign Direct Investment in Africa after South Africa’ (Roe 2012). Imports still far exceeded exports, with the balance of payments brought into line because of transfers in from Aid donors and private investors. But for the future, economists and mining experts began to posit that Tanzania, in utter contrast to the position thirty years earlier, was about to enter an era when its problems would be those of oil exporters such as Nigeria or Angola—namely, an over-valued exchange rate, deep-seated inequalities, and difficulties competing in world markets other than for mineral and oil exports. The dire lack of resources for investment which dominated the discussion of economic strategy in Chapter 24 of this book, or which led to the agonized debates with the IMF over structural adjustment in the 1980s, would no longer limit what Tanzania could do.

The ‘liberalism’ which started in 1985 meant opening up to foreign imports and trade, and paying salaries close to international rates. One of the consequences was a flood of 4x4s which clogged the road network in Dar es Salaam. South African-owned shopping malls stocked the latest consumer goods. Corruption became a major topic of discussion, especially when it affected basic services such as electricity supply and water. The scandals were highlighted by the many newspapers publishing in English and Swahili. The legal system and the courts struggled to deal with the complex cases.

However, from the mid-2000s, Tanzania reported GDP growth rates of 6–8%, among the highest official growth rates in the world. Even so, the majority of its population felt little better off, especially (p.11) those depending on agriculture.15 This was especially true in the areas which pioneered the production of coffee and cotton for export, where the liberalization of marketing had led to declines in the usage of fertilizers and sprays, and in the quality of the products (Ponte 2002).16 Generally, food crops did better than the traditional agricultural exports, with overall agricultural output rising at 4–5%, above the rate of population growth, by the end of the decade.17

In 2005, the government announced that there would be a secondary school in every political ward. A very rapid expansion in secondary education, especially after 2006, and proportionately an even bigger expansion in university places, led to declining standards. The fact that both secondary and university education was supposedly conducted in English, when English teaching in many schools was in crisis, was just one of the causes.

Political parties other than CCM, legal since 1992, had no way of matching the promises made, especially when nearing elections, by CCM politicians. But opposition parties won eighty out of 357 seats in the National Assembly in the 2010 elections. Forty-four of these were won by the business-friendly party CHADEMA which appealed to younger and educated Tanzanians, predominantly in urban areas, by exploiting the apparent lack of action against corrupt politicians and business leaders.18 In April 2012, CHADEMA won a by-election in Arumeru East, outside Arusha. It was becoming clear that the 2015 presidential and parliamentary elections would be a referendum on the performance of the government, and that the results would be more open than any previous election.

(p.12) So how should this book be read today? The first one hundred pages tell the story of Tanzania up to its Independence from Britain in 1961, summarising the work of the historians who described the activity before the German conquest, not least the trade in ivory and slaves (the slave trade did not have the impact that it had in West Africa, and the population continued to grow through the nineteenth century). The Germans, in the few years between the 1890s and the First World War, built railways, roads, harbours, mapped the country, identified most of its minerals, and started basic education, a legal system and the official use of Swahili. In 1920, after the First World War, the British were granted a League of Nations mandate to govern Tanganyika, but were much less energetic. The chapters on indirect rule, and on the creation of agricultural marketing cooperatives as a conscious colonial policy, show how the elite which took over the country in 1961 was created.

The next thirty pages show how that elite brought the country to Independence in 1961. Fifty pages cover the six years from Independence to the 1967 Arusha Declaration, Nyerere’s policy statement which committed the country to socialism. Here the chapter on agriculture shows the difficulties that the agricultural specialists had in coming to terms with the knowledge, independence and sometimes the ability of small farmers to resist demands to grow and sell crops if they did not think the advice they were given was worth the effort. The final 150 pages, the core of the book, includes five chapters which take the story up to 1980, on economics, social policy, rural development, industrialization and the beginnings of a working class, and finally on development strategy and foreign aid. Of these, the chapter on rural development broke the most new ground, with its distinction between ujamaa, Nyerere’s vision of co-operative production, and his earlier vision of villagization, the benefits of living in villages, which was eventually implemented, with some benefits but disastrous consequences for production.19

The final chapter, on the Tanzanian state, sketched the theoretical framework which underlies the book—a version of dependency theory, developed with important insights from Issa Shivji. Colonial governments exploited countries like Tanganyika for their raw materials. After Independence, international companies continued to (p.13) exploit opportunities for profit in import-substituting industries and infrastructure development. The only countervailing power to this was from the State, so there was a rationale for the nationalizations of 1967. But a political theory based entirely on a Leninist analysis of imperialism and exploitation by the external forces of international capitalism underplays the role of those who hold power locally. It takes two parties to sign a contract.20 The value of Shivji’s conception of a bureaucratic bourgeoisie was that it focused attention on the class structures within Tanzania, in particular the elite who used privilege and education to get into the positions where they were able to sign the contracts.21 Whether they had the skills, technical knowledge, confidence, and the independence from outside exploiting interests, to negotiate good contracts at that time was extremely doubtful.

They were not a bourgeoisie. A bourgeoisie not only owns and controls capital but has the capacity to expand its own power base, through accumulation of capital and economic growth. The discussion drew attention to the degree of discretion available to this emerging or proto- class, and their responsibility for failed investments, corrupt deals, and lack of learning from the past. The book concluded that, at the end of the 1970s, they were gaining the coherence to act as a class, but that under Nyerere they would neither succeed in pursuing a ruthless capitalist accumulation, nor implement socialist policies. Its final words were that ‘the contradictions and stagnation of the 1970s were likely to continue.’

In 1999, the Planning Commission produced a Development Vision for the country for the period up to 2025. It was about culture more than economics—an update of the philosophy of the Arusha Declaration in line with the country’s commitment to a capitalist path of development. In 2012, this was updated and relaunched along with a new Five Year National Development Plan. These had the explicit (p.14) objective of turning Tanzania into a ‘middle income country’ by 2025. Economic analysis was produced to show what this would involve (Mujobu et al. 2012). It assumed that the population would grow at 2.7% annually, reaching 64 million by 2025.22 Over half the people would live in urban areas, predominantly Dar es Salaam, already one of the fastest growing cities in Africa, with a population likely to exceed 20 million before 2025. To reach the ambitious growth target, GDP would need to grow at just below 8%. Manufacturing and services would become the main sources of employment, the extractive industries (mining and gas) and tourism the main sources of foreign exchange. In order to feed the population, including the urban population, the productivity of each agricultural labourer would have to rise by nearly 6% annually (Mujobu et al. p. 19). Inequality and poverty would probably increase, and the research suggested that mitigating measures would be needed to lessen this, including ‘transparent and productive ways of allocating the revenue from the extractive sector’ (p. 26).

Mujobu and her team studied the paths taken by South Korea, Malaysia, Sri Lanka, Thailand, the Philippines, and Vietnam, among other countries where industrialization and exports were key to rapid growth. Their main manufacturing products are consumer goods, for internal sale or for export, mainly in the private sector. Their strategies were very different from those of the Soviet Union or China, which initially industrialized around steel, heavy machine tools, electricity generation, industrial chemicals, oil and plastics, rubber, wood and cement, the basic industries of the Third Five-Year Plan, discussed in Chapter 24 of this book.

These Asian tigers did not follow a pure liberal agenda. The state retained important roles. Vietnam is the most interesting comparator for Tanzania. The two countries went through socialist periods—in Vietnam’s case, involving investment in heavy industries tied to exports to the Soviet Union. These were followed by periods of chaos, and then structural adjustment, and then by rapid growth. The Vietnamese professor Loc Duc Dinh compared Tanzania with Vietnam.23 Vietnam welcomed foreign direct investment, but (p.15) it ensured that key industries stayed in local ownership. It developed competitive export industries, e.g. of textiles and clothing, by building on what was already there. Corruption was present, but it was not allowed to divert key elements of the plans for growth.24 Agriculture was also developed successfully, in the small family farms; the production of rice increased greatly after the war when the returns to the farmers were increased. Later, new crops were planted, some such as coffee and cashewnuts in direct competition with production in Tanzania, and providing a contrast in approaches to rural development (Kilama 2013).

In Do Duc Dinh’s analysis, the key features which distinguished the two countries were consciousness of the importance of key industries, and how one industry would link to another or to the agricultural sector; a commitment to competitiveness internationally; and an ability to expand existing factories and companies. Vietnam managed to maintain good returns to farmers by rapid increases in productivity and the planting of new crops. Thus he concluded his paper by asserting that ‘the most important lesson Vietnam has learnt through thousands of years in her history is: “Without trade, there will be no prosperity; without agriculture there will be no stability.” ’

Can Tanzania follow a similar path? Is its ambition to become a middle income country within a few years feasible? It requires some strong assumptions. The first is that the Treasury succeeds in taxing the investments in minerals and natural resources. Alan Roe has pointed out that incoming investors will expect to recover the costs of their investments within the early years, but that after ten years or so, very large sums should reach the Tanzanian Treasury, mainly from corporation tax. The first challenge for Tanzania will be to enforce those contracts.

(p.16) The second challenge will be to channel as much as possible of the resulting foreign exchange into manufacturing, which must be competitive with imports from China and elsewhere, and based on high technical and quality standards, in small and medium scale businesses not just large. Some of the investors will be from overseas. Some will be existing businesses, including some of the Asian-owned businesses which go back to colonial times.25 An increasing number will be Tanzanian-owned and run.26 Whatever the ownership, high growth rates will only occur if the companies and individual business leaders reinvest their profits in new ventures rather than take them out of the country or use them on imported luxury items. Much other manufacturing will take place in the informal sector, providing employment and incomes for many urban dwellers (Havnevik 1986; Bagachwa and Ndulu 1996; Tripp 1996 and 1997).

If up to half Tanzania’s population is to live in urban areas, and to earn incomes from manufacturing or services, there will have to be unprecedented high levels of investment in urban infrastructure. Electricity and water are fundamental to urban living. But so are housing, drainage, solid waste disposal, flood protection (a major issue in parts of Dar es Salaam), and recreation. There is also need for investment, and faster turnarounds, in the ports, for both exports and imports. Above all, large cities depend on transportation, so will need huge investments in roads, bridges, limited-access motorways, and public transport—the bus network but potentially also rail-based light rapid transit. It will not just be Dar es Salaam. Arusha, Mwanza, Kigoma, Mbeya, Songea and Mtwara are all well placed to take advantage of exports to neighbouring countries. The profession of town planning will have to be strengthened and given the resources and powers required to keep ahead of in-migration to these cities, to protect the public realm (for recreation, tourism, and civic pride, and (p.17) to ensure that space is available to expand the infrastructure) and to enforce planning regulations far more than hitherto.

Agriculture is even more challenging. The model requires sustained growth of 5% or more. The growth rate in agriculture between 1999 and 2009 averaged 4.4%, according to the official figures (Mujobu et al. p. 5). This is higher than the long-term average, and above population growth. Continued growth of agricultural production at levels above this over long periods is rare in world terms. It has occurred where there have been specific technologies, such as some of the packages for rice cultivation that comprised the ‘green revolutions’ in Asia, or historical situations like Vietnam’s recovery after its war. It is not impossible for such high growth rates to be achieved in Tanzania, but the record in recent years is patchy. The figures for the traditional export crops—coffee, cotton, sisal, tea, and in years other than 2011, cashewnuts—have been disappointing. This is reflected in poor outcomes for the areas dominated by those crops, such as Mount Kilimanjaro, where, in addition, springs and water sources are drying up and over-population is increasingly an issue. In the Sukumaland area, cotton is an extremely labour-intensive crop with uncertain results, and many farmers may get better returns from growing and selling maize, rice or cassava.27 Banana production has been affected by worms which attack their roots. Cassava is threatened by viruses. On the other hand there is a continuing ‘mini-green-revolution’ in parts of the Southern Highlands, based on hybrid maize, rice, potatoes, vegetables and other high value crops for urban markets, especially Dar es Salaam (Rasmussen 1986)—though this faltered for a period when subsidies for fertilizer were withdrawn (Isinika, Ashimogo and Mlangwai 2004: 27–30). Nationally there have been substantial increases in the production of rice and maize, (p.18) and some exports of maize to neighbouring countries. This has come mainly from small-scale farms, demonstrating that, in the right economic circumstances, such farms can produce surpluses. In both China and Vietnam, highly successful agriculture is based almost entirely on small farms.

Currently there is a drive towards large-scale farming, for biofuels, rice and other crops (e.g. cassava), based to a degree on the initiatives of inward investors, but drawing succour from some of the statements in the 2010 policy statement Kilimo Kwanza ‘[Agriculture First’]. The debates between the advocates of small-scale and large-scale agriculture look uncannily similar to those between the advocates of the Transformation Approach and the Improvement Approach in the 1960s, discussed in Chapter 17. The large-scale farms have yet to prove themselves—and those who advocate them should remember that water resources are often less than anticipated, rains unreliable, the soils easily exhausted or eroded, plant diseases and pests a constant battle, and that wage labour in Tanzania is not cheap. Attempts to farm on a large scale go back to colonial times and the Groundnuts Scheme after World War II, and the sisal plantations. The Basotu Wheat Project benefited from the best expertise the Canadian government could provide. Yet all these failed. It remains to be seen if either modern Western agribusinesses or large-scale Chinese or Korean irrigation farming can do better. If they too fail they will be written off as land-grabbing (Chachage 2010a and b).

Conversely, small-scale farming should be conceptualised as part of the informal sector, a productive activity which draws in large quantities of labour from whole families, where farmers respond to price incentives, and are willing to adopt new technologies if these do not involve increased risk. The demand for food in urban areas should ensure that it is profitable, and most of the income so generated will feed back into local crafts and businesses. If village economies, largely based on agriculture, flourish, then poverty levels in Tanzania can be reduced. If they stagnate, then it will be very hard to improve health and education standards nationally, because no other sector can provide employment for the numbers involved.

Thus the goal of Tanzania to become a middle-income economy rests on many assumptions. It will remain a pipedream as long as there are shortages of electric power, water, problems with transport, and bottlenecks in the ports. It requires a state that will raise taxation from companies and its better-off citizens, carry through what it (p.19) promises, and combat corruption. It will require its bureaucratic bourgeoisie to articulate a vision that will be convincing to the rest of the population, and to ensure that it is implemented.

Can the Tanzanian elite use the window opened by gold, gas and minerals to bring this about? It is closer to being a ruling class than it was thirty years ago, through its members who have become successful capitalist entrepreneurs, but also through its ability to exploit the machinations of international aid and finance. It is not short of friends and advice, from China and the Middle East as well as the West. To achieve the transformation to which it aspires, it requires self-belief, the ruthlessness and the technical knowledge to take hard decisions and to coordinate them (important decisions will depend on the advice of engineers or economists, and will not always fit with the short-term ambitions of politicians), the readiness to learn from mistakes, and sustained hard work—in both the private and the public sector.

Political economy can only go so far. It is not a substitute for detailed historical studies, or for technical understandings. It cannot be determinist, or anticipate the impact of inspired leadership. Its strength is in its ability to provide a framework and suggestive explanations as to why decisions were taken as they were. What happens in a country is constrained and channelled by its class structure, but it also depends on what is technically and economically possible at any given time.28 This in turn can be extended by good leadership, the ability to persuade others to do what they otherwise might not do. This depends on integrity, and abilities to learn and improve, but also the opportunities that arise—the luck they have, the partners they choose, and the gambles they take that pay off.

The imperialists have not gone away. Tanzania remains at constant risk of being exploited by those it chooses as its partners, or who take profits out of the country. It requires leaders with a sense of history, and technical knowledge of how accumulation occurs, including the potential of different kinds of agriculture, small-scale as well as large-scale. Underlying the country’s stability is the legacy of Mwalimu Nyerere, who foresaw the dangers of excessive inequalities, and understood the importance of relevant education and skills, of the necessity for state intervention, of services accessible to all, of African (p.20) and Pan-African leadership and co-operation, and above all of rural development, even when he tried to run too fast in the 1970s. If this book inspires another generation to rework his writings and his analysis for a new era with new opportunities and risks, and to work out how to construct and enforce contracts which will both incentivize those who are willing to invest in Tanzania to plough back their profits into more growth, and allow some of the resulting surpluses to be distributed so that all the population have the opportunity to improve themselves, it will have fulfilled its objective.


June 2013


(1) Industrial Development in Tanzania: Some Critical IssuesIdris Kikula, Policy Implications on Environment—The Case of Villagisation in Tanzania (1997), both published by the Nordic Africa Institute (Uppsala).

(2) For a recent interpretation see Edwards (2012), which draws on the memoirs of Edwin Mtei, Governor of the Bank of Tanzania at the time (Mtei 2009). For three contemporary papers which illuminate the debate see John Sender and Sheila Smith, ‘What’s right with the Berg Report and what’s left of its criticisms’, Kighoma Malima, ‘The IMF and World Bank conditionality: The Tanzanian Case’, and Werner Biermann and Jumanne Wagao, ‘The IMF and Tanzania—A Solution to the Crisis’, all in Lawrence (eds.) (1986). Other interpretations are Boesen et al. (1986), Campbell and Stein (eds.) (1991), Bryceson (1993), Mbelle, Mjema and Kilindo (eds.) (2002), Ponte (2002), and Havnevik in Havnevik and Isinika (eds.) (2010: 19–55).

(3) This is similar to arguments following the international banking and financial crisis from 2008, that European countries including Greece, Spain and the UK, with large amounts of borrowing and deficits in their government accounts, should correct these over longer rather than shorter periods of time.

(4) This was the Technical Secretariat of the Tanzania Advisory Group set up by Robert McNamara, President of the IMF, in 1980 (Edwards 2012: 22).

(5) For contrasting but complementary books on Nyerere’s legacy, see Legum and Mmari (eds. 1995), and Mwakikagile (2006) and especially the articles in Mbelle, Mjema and Kilindo (eds. 2002) and Havnevik and Isinika (eds. 2010).

(6) Agence France Press Press release, following a press conference at the Kilimanjaro Hotel, Dar es Salaam, 14 March 1995, quoted in Mwakikagile (2006: 67–8).

(7) For a recent biography see Mwakikagile (2010). Earlier biographies are Listowel (1965), Edgett Smith (1971), Pratt (1976).

(8) For detailed analysis of three industries in Tanzania and their weaknesses, see Wangwe (1992), written before the textile factories were forced to close.

(9) For details on Kilwete’s early life and first five years as President, see the biography by Nyang’oro (2010).

(10) Corruption went back a long way. It could be found in the co-operative movement and early parastatal bodies, discussed in Chapters 17 and 23. Nyerere appears to have turned a blind eye. From the 1990s onwards, the problems with the police, the courts, the tax authorities, and the port of Dar es Salaam became overt. For details see Mtatifikolo (2002), Nyang’oro (2010: 206–11), Cooksey (2010), Havnevik (2010).

(11) Only a small fraction of its working population were in regular employment. The majority worked in what came to be called the informal sector, in small workshops, crafts, or every possible kind of service industry. See Bagachwa and Ndulu (1996), Swantz and Tripp (1996), Tripp (1997), and for a more recent discussion of a particular group of workers Rizzo (2011).

(12) See Mashindano et al. (2010, 2011), for policy recommendations to support agriculture; Deborah Bryceson (2010, p. 77ff), for a discussion of the figures up to 2005 and the pressures put on Tanzanians trying to make a living in rural areas; Kikula (1997), for the problems of declining productivity in agriculture; and Da Corta and Magongo (2011), for specific examples of the ways in which changes in agriculture and land ownership have acted adversely on women and their families. For a discussion of the problems facing agricultural research see Coulson and Diyamett (2012).

(13) But not entirely. There were continuing imports of wheat and palm oil—both facilitated by modern flour and oil mills in Dar es Salaam—and of rice.

(14) For details of the mining contracts, and their impact, see also Macdonald and Roe (2007), Policy Forum (n.d., but around 2008), Roe and Essex (2009). For artisanal mining see Bryceson, Fisher, Jønsson and Mwaipopo (2012).

(15) For discussions of food crops up to 1994, showing the importance of fertilizer subsidies, see Raikes and Gibbon (1996: 251–70); and for the subsequent period, Isinika and Msuya (2011), writing as part of the AFRINT [Africa and Intensification] research project conducted from the University of Lund, Sweden.

(16) Many farmers uprooted coffee bushes. The story of cotton is more complicated, and by 2011 there was increased output, achieved by ‘contract farming’—linking farmers to particular ginneries. For a discussion of the figures up to 2005 see Bryceson (2010: 75–82).

(17) For a discussion of maize and rice, but only up to 2000, see Skarstein (2010).

(18) CHADEMA (Chama cha Demokrasia na Maendeleo) is a member of the International Democratic Union whose members include the US Republican Party and the UK Conservative Party. It campaigned strongly against corruption and gained much of its support from younger, educated voters. It was the main Opposition, with forty four of the 342 MPs, in the 2010 parliament.

(19) Kikula (1997) goes more deeply into the potential benefits of living in villages, and the adverse consequences for agriculture.

(20) The arguments about imperialism were already qualified by the mid-1970s, by the position argued by social theorists such as Aidan Foster-Carter in Tanzania at that time, later to become an expert on South Korea, as well as by neo-Trotskyist scholars such as Bill Warren (1980), Geoffrey Kay (1975), and David Rosenberg, to the effect that it was not possible to build socialism in Tanzania without first industrializing. For a series of articles which criticize those positions see Tandon (ed.) (1982).

(21) In this it joins forces with right wing commentators influenced by public choice theory, such as Robert Bates whose influential 1981 book on Markets and States in Tropical Africa argued that agricultural policies could best be explained by studying the behaviour of the elites who benefited from them, almost always at the expense of farmers.

(22) Actual population growth in 2009 was 2.9%. It was projected to fall to 2.5% by 2020.

(23) Professor Dinh was a keynote speaker at REPOA’s 17th Annual Research Workshop in Dar es Salaam, March 2012. His paper describes the strategy adopted by Vietnam (Dinh 2012). His presentation compared the strategies of the two countries. He illustrated his conclusions by contrasting the treatment of the paper industries in the two countries. Both had been supplied with modern paper mills by Sweden and other donors. The Vietnamese mill is one of the most profitable industries in the country, in Vietnamese ownership. The Tanzanian mill at Sao Hill was sold to a Kenya-based company for $1million in 2004.

(24) This may be contrasted with corruption such as that in the Richmond/Dowans contract in which Tanzania did not get any of the extra electricity generation capacity for which it paid. For a discussion of corruption internationally which draws on Tanzanian case studies, see Cockcroft (2012).

(25) The nationalist politicians were highly ambiguous in their attitudes to the Asian business class, and many of the Asian families found it easier to make money from property or tourism than from manufacturing. But the technical skills and expertise remained.

(26) Chachage’s 2012 paper includes a list of 39 leading Tanzanian business leaders, and he provides brief summaries of the interests of six of these: Reginald Mengi (of IPP Group and ITV), Michael Shirima (Precision Air), Khadija Simba (Enterprise Homes), Ernest Massawe (Tanzania Security), Vulfrida Mahalu (VMB Holdings) and Gideon Mazara (Musoma Dairy).

(27) The Anti-Malthusian school, taking its lead from the work of Ester Boserup (1965), argued that population pressure on the land would lead to innovation, probably requiring extra labour, that would lead to production rising as fast or faster than population. This is clearly a possibility, but it is not automatic, and if population growth is too fast, or there are other challenges to increased productivity, farmers may move away to other activities, a process described by Bryceson and others as ‘depeasantization’ or ‘deagrarianization’. It is likely that both the kind of intensification studied by Boserup and deagrarianization are taking place in Tanzania—in some places both at once. Kikula (1997) showed how, in land along the Tazara railway, South of the Mufindi escarpment, villagization led to soil exhaustion, erosion, and declining yields, and he did not find any evidence of significant innovations which might have counteracted this (pp. 206–7).

(28) In Marxist terms, the forces of production as well as the relations of production.