an equivalent sum to the burden on the country’s meager foreign exchange reserves. These were staggering amounts for a poor agricultural country with a population of only about fifteen million. The collapse of the agricultural sector was so severe that even farmers had to receive food assistance. Although drought conditions in some food-producing districts contributed to agrarian difficulties, the basic fact was that Tanzania had failed to translate the president’s vision of agrarian self-sufficiency into economic reality.
The root cause of economic decline was the stagnation of the export sector. Production of virtually every major export crop declined dramatically during that period, diminishing the country’s capacity to generate the foreign exchange required to sustain both food imports and the import of inputs necessary for the country’s fledgling industries. The World Bank captured the broad parameters of this decline in its classic 1981 study, Accelerated Development in Sub-Saharan Africa.
During the last fifteen years, the volume of exports in Tanzania has declined dramatically. In 1980, the total exports of the country’s major commodities (cotton, coffee, cloves, sisal, cashews, tobacco and tea, which account for two-thirds of the country’s export earnings) were 28 percent lower than in 1966 and 34 percent lower than in 1973. As a percentage of GDP, export earnings fell from 25 percent in 1966 to only 11 percent in 1979.6
Since earnings from agricultural exports were the principal source of funds for food imports, export failure was doubly disastrous. Major contributions of foreign assistance were necessary to avert rural starvation and severe depression in the urban economy.
Evidence of the country’s dismal economic performance manifested itself in the deterioration of the roads, schools, and medical facilities and the unreliability of public utilities such as water and electricity. Although members of the political elite managed to live well despite all that was going on, others suffered, especially rural Tanzanians, the designated beneficiaries of the president’s vision. Economic decline widened the material gap between urban citizens and rural farmers, already the poorest citizens. By the end of 1975, Nyerere’s vision of an agriculturally self-sufficient nation able to support itself and, therefore, free to pursue its own independent course in world affairs had given way to the reality of a nation dependent for its economic survival on the generosity of the donor community.
The decline of the export sector had ripple effects that permeated the entire economy. In addition to making Tanzania dependent on its donors to finance food imports, declining revenues from agricultural exports also resulted in severe constraints on industrial production. Tanzania’s industrial sector, largely oriented toward production for domestic needs, was almost entirely dependent on imported inputs. Virtually every requisite of industrial production, including capital goods, spare parts, and raw materials, had to be obtained from international markets, which demanded hard currency. The industrial sector also required a steady flow of hard currency to finance such industrial intangibles as patent rights and royalty fees and pay for costly management contracts with the global companies that provided technical services and skilled personnel. As the earnings from agricultural exports declined, the government had to divert an increased share of what remained toward the cost of food imports. This meant that the import requirements of the industrial sector were accorded second priority. Agricultural export decline manifested itself in scarcities of such consumer items as clothing, medicines, automobile tires, soap, chemical products, plastic goods, and even soft drinks, beer, and cigarettes. The World Bank estimated that, by the mid-1970s, Tanzania’s industries were producing these goods at only 20 to 30 percent of installed capacity.7
The faltering output of the agricultural export sector also manifested itself in the rapid deterioration of public services. In a largely agricultural country such as Tanzania, education, health, water supply, public transportation, trash collection, and energy provision also require inputs that are only available on international markets. With the supply of hard currency increasingly diminished, schools suffered from the lack of books and other supplies; hospitals, from the scarcity of drugs and medical equipment; public buses and trucks from the lack of replacement parts and fuel; and infrastructure improvement from the lack of virtually everything. Even the most vital urban services became badly degraded: water and electricity supply, trash collection, and public transportation operated intermittently at best and became increasingly unreliable, posing added risks to public health. During the 1970s, Tanzania was struck with a new and more lethal form of malaria, one that required hospitalization and continuous intravenous hydration. The patients with the best chance of survival were those who could bring their own intravenous kits to the country’s medical centers. Ordinary Tanzanians found it difficult to afford these kits. Those who could afford them quickly found that the supply in local pharmacies was quickly exhausted, after which, Tanzanians could only purchase the kits in high-priced parallel markets. To make matters worse, the malaria kits had to be stored in refrigerators, also a parallel market commodity.
Daily life for ordinary Tanzanians became painfully difficult. Urban dwellers faced scarcities of virtually every necessity. Dar es Salaam is a sprawling city whose working-class neighborhoods are distant from the city center where most businesses, factories, and government offices are located. For many residents, the daily commute to work became an agony of unavailable or unpredictable bus service. Indeed, many residents simply had to walk, sometimes for several hours each way, between their homes in the residential areas and their jobs in the city center. The deterioration of public and private sector services made it necessary for employees of schools, hospitals, banks, and telecommunications companies to divert much of their time to scouring the marketplace for essential items. There was unremitting uncertainty as to whether such basic household necessities as maize meal, sugar and salt, cooking oil, or natural gas would be available in formal markets—and less uncertainty about their availability in parallel markets, with prices there reflecting the scarcity that prevailed throughout the country.
Life in the rural areas became even more impoverished. Vital consumer goods were even scarcer in the rural areas, where purchasing power was so low that even parallel markets sometimes failed to materialize. Tanzania’s rural population consists overwhelmingly of small farmers, and for this major segment of the population, economic life was subject to extreme difficulty. One of the great ironies of food aid programs in contemporary Africa is that they find it necessary to deliver basic foodstuffs to rural populations who, under most conditions, ought to be supplying these for themselves along with a surplus for urban consumption. Throughout much of the Tanzanian countryside, such vitally important production goods as hoes and shovels became scarcer and more costly. Critical inputs such as fertilizers and pesticides became less available at any price. The deterioration of the rural infrastructure made it increasingly difficult to travel from farm to township to market products or obtain inputs. The socioeconomic gap between the countryside and the city grew ever larger.
The economic decline brought latent racism to the surface. In Tanzania in the early 1980s a strain of anti-Asian sentiment began to emerge that had always been present but had remained largely dormant under the influence of the Nyerere government’s insistence on multiculturalism and while economic conditions were still relatively tolerable. Anti-Asian sentiment had been a part of the country’s political discourse since the nationalist period when the Tanzanian African National Congress (ANC) sought popular traction by criticizing Nyerere and TANU for being insufficiently proactive toward Asian dominance in the mercantile sector. The ANC had also sought political support by asserting that mid-level Asian civil servants tended to stand in the way of upward mobility for Africans. Even Nyerere’s government turned to racist measures to deflect attention from economic conditions. The Acquisition of Buildings Act of 1971,8 though nominally part of the government’s socialist agenda, was in reality a legalized confiscation of Asian-owned rental property.
One of the enduring questions in the Tanzanian political economy is why the government delayed so long before implementing reforms that might have reversed the downward spiral. One source of delay was the absence of an alternative economic theory that could explain why the economy was performing so poorly and what steps were necessary to improve things. Although the World Bank
