AN ANALYSIS OF TANZANIA ECONOMIC DEVELOPMENT

By

Leo Charnel Fotsing

TANZANIA

TANZANIA, DATA PROJECTION• Geography: East African coastal country – nearly 1.5 times the size

of Texas• Population: 49.6 million - population growth rate: 2.8% - Fertility rate: 4.95 children born/woman - Urban population:30.9% of total population

Age structure and population distribution

TANZANIA, DATA PROJECTION• Geographic condition Climate: varies from tropical to temperate Land use: arable land 16.37% , permanent crops 2.43% , other 81.2% Main natural resources: Hydropower, tin, phosphate, iron core, coal, diamonds, gemstone, gold, natural gas, nickel…

• Economic performance - Current GDP: $36.62 billion - GDP per capita: $1,900 - GDP growth: 7.2 %

TANZANIA, DATA PROJECTION

• State economic Infrastructure - Roads paved: 6.67% - Rail lines: 1,860 km - Quality of port infrastructure: 3.3/10 - Motor vehicles per 1000: 7.37 • Trade Main trading partners: China, Germany, Japan, the EU, UAE, UK, India, Kenya and South Africa

TANZANIA, DATA PROJECTION• Social and Human capital development

Education - Government expenditure on education (% of GDP ): 6.2 % - Literacy rate, adult total (% of people ages 15 and above ): 68%

Languages: Swahili and English (official), Arabic (spoken mostly in Zanzibar), and about 125 other local languages.

Religion: Christian 30%, Muslim 35%, indigenous beliefs 35%; Zanzibar /islands over 99% Muslim

Life expectancy: 61 years

Infant Mortality ( at birth and under 5 years of age per 1000) : 36

TANZANIA, DATA PROJECTION

Morbidity (common illnesses, prevalence of HIV/AIDS) - Communicable diseases: HIV/AIDS, Tuberculosis and malaria - Non communicable diseases: diabetes, cancer and chronic respiratory track and cardiovascular conditions.

The state of health infrastructure - Health Expenditure (% of GDP): 7.3 - Physicians (per 1000 people): 0.01

• Water and Sanitation - Improved water source (% of pop with access): 53 - Improved sanitation facilities (% of the pop with access): 12

TANZANIA, DATA PROJECTION• POLITICAL INSTITUTIONS - Independence : December 9th 1961 from the UK and Zanzibar December 10th, 1963 (from the UK) . On April 26th, 1964, Tanganyika united with Zanzibar to form the United Republic of Tanganyika and Zanzibar and was renamed United Republic of Tanzania on October 29th, 1964.

- Presidents: Julius Nyerere (1964-1985); Ali Hassan Mwinyi (1985-1995); Benjamin Mkapa (1995 – 2005); Jakaya Kikwete (2005 – to date)

The president is elected by popular vote for a five year term renewable only once.

- Corruption perception Index (rank): 119/175

- Political stability: Tanzania has enjoyed stability since independence in 1964.

TANZANIA BEFORE COLONIZATION

• Earliest known human: The Cushites, the Bantu, the Nilotes, Tatoga, Massai, Iraqw, and various others.

• Economy: centralized on agricultural and pastoral activities

• Governing power: livestock possession, defense ability, weather forecasting and healing power.

Innovation: Through Internal competition ( Irrigation system at Engaruka near Arusha – more than 250 years old)

TANZANIA BEFORE COLONIZATIONAfter the 1800sInfluence of foreigners from India and the Arab world

Increase in commercial trade (Ivory, firearms, ammunitions…)

Ethnic centralization (Small tribes got absorbed by big ones)

Increase in conflicts between tribes and the hunting of African peasants (slaves)

TANZANIA BEFORE COLONIZATION

• Ethnic centralization - Increase in Administrative power

- Development of agricultural activity (maize, cotton, cassava, and rice)

- Specialization in industrial skills such as iron transformation and craft

- Promotion of writing ( from Arab and Swahili clerks)

TANZANIA AND COLONIALISM

• The German conquest 1890s, German attack - More than 100,000 Tanzanian lost their lives “ We have not gone to East Africa to found plantations for 300-400 people, but to make a vast country bloom, to find raw materials and create markets for German trade and German Industry” Colonel secretary Dernberg, 1903 What was the nature of colonialism in this case?

After the First World War with German defeat, the British took over.

TANZANIA AND COLONIALISM

• Tanzania under the British “The first object of the government to induce the native to become a producer directly or indirectly, that is, to produce or assist in producing something more than the crop of local foodstuffs that he requires for himself and his family” Governor Cameron stated, 1926

- Administration of Tanganyika by Britain was under the League of Nations mandate

- They highlighted the importance moral well-being and social progress of Tanganyika . - Despite their intentions, no time scale was laid down for the population of Tanganyika to take over the system. - Promotion of Education

THE PATH TO INDEPENDENCE

• British Indirect rule - Chiefs had power over their chiefdoms - Use of taxes to promote development - Britain still had power over the country

• Political movement - Leverage of Knowledge - Rise of a well educated class - Seeking freedom and equality

THE PATH TO INDEPENDENCE

• Julius Nyerere - First president of Tanzania and father of African socialim Born in April 1922

Education: Obtain a Master in history, art and economics at the university of Edinburg. Leader and founder of the Tanganyika National Union (TANU) IN 1954

Vision: to bring independence and self reliance in Tanzania.

THE PATH TO INDEPENDENCE• TANU and Nationalism

“…we are opposed to the idea of a small minority in any country appointing itself as the masters of an unwilling majority. Our position is based on the belief of the equality of human beings, in their rights and their duties as human beings and in the equality of citizens in their right and duties as citizens. We Tanganyika believe, sir, that only a wicked man can make color the criterion for human rights. Here we intend to build a country in which the color of a person’s skin or the texture of his hair will be as irrelevant to his rights and his duties as a citizen as it is

irrelevant to his value in the eyes of God” Nyerere, December 1959

- 1960, he became the chief minister of Tanganyika

- Tanganyika granted independence in December 9th 1961 with Nyerere as the prime minister.

- 1962 – elected as first president of the country

- Nyerere philosophy and vision and the international community

- Russia, China, India, the Scandinavia…

- International support through Foreign aid

The Arusha Declaration

• Decrease in Foreign Aid

• High foreign debt

• Increasing gap between the rich and the poor

• The Arusha DeclarationFebruary 5th, 1967

The Arusha declaration marked a turning point in Tanzania politics.

PART ONE The TANU Creed ( 9 beliefs and 13 objectives)

- That all citizens together possess all the natural resources of the country in trust for their descendants

- To see that the Government eradicates all types of exploitation, intimidation, discrimination, bribery and corruption;

- To see that the Government exercises effective control over the principal means of production and pursues policies which facilitate the way to collective ownership of the resources of this country;

The Arusha DeclarationFebruary 5th, 1967

The Arusha Declaration

PART TWO The Policy of Socialism

- Absence of Exploitation

- The Major Means of Production and Exchange are under the Control of the Peasants and Workers

- The Existence of Democracy

- Socialism is a Belief

The Arusha DeclarationPART Three

The Policy of Self-Reliance

Focus on war against poverty and oppression in Tanzania; It aims at moving the people of Tanzania (and the people of Africa as a whole) from a state of poverty to a State of prosperity.

PART FOUR TANU Membership

Emphasis on the beliefs of the Party and its policies of socialism

PART FIVEArusha resolution

The Arusha Declaration

• Commercial Banks and most private industries were nationalized

• Implementation of a new rural policy to increase productivity and control rural urban migration , Ujamaa vijijini ( socialism in villages)

• By 1970 , all imports and exports were handle by the state.

THE UNPLANNED DESTINY

• Production of wealth??

1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976* 1977*

-3500

-3000

-2500

-2000

-1500

-1000

-500

0

500

Trade balance

Trade balance

Graph showing the trade balance of Tanzania between 1965 to 1977

THE UNPLANNED DESTINY

• Production of wealth??

Subsistence agriculture

Monetary GMP Agriculture total Mining and quarrying

Manufacturing and Handicrafts

Total GMP Monetary GMP

-15

-10

-5

0

5

10

15

1965-19711971-1977

Graph showing a comparison of Tanzanian Gross material product between 1965-1971 and 1971-1977

THE UNPLANNED DESTINY• Production of wealth??

1969 1975 Average growth rate per annum %

Total urban labor force 219 600 375 400 9.2Regular wage employment

153200 210500 5.4

Casual employment 17200 27700 8.4Low-income self-

employment26900 78000 19.4

Unemployed 22400 59 200 17.6Unemployed as a percentage of the

labor force

10.2 15.8 n/a

Table4: Urban employment and Unemployment 1969 and 1975

THE UNPLANNED DESTINY• Production of wealth??

- Standard of leaving had deteriorated - Income level had decreased - Government spending had decreased - High dependency on foreign aid

IMF and World Bank attempted to intervene - Devaluation of the Tanzanian currency

Nyerere’s response: - Infringement to Tanzanian national sovereignty - Political suicide

THE UNPLANNED DESTINY• Received various support from like-minded donor countries

( socialist)

• Saw the Structural Adjustment policy as a political game.

• International economic system falling behind capitalism as inherently unfair to low income countries

• However, Tanzania economy worsen off – standard leaving decline to 65%

• Foreign donor started backing off in the 1983s

• Opposition emerged and in November 5th, 1985 Nyerere resigned.

TANZANIA DEVELOPMENT

• Economic recovery program in 1986 – president Hassan

- In partnership with the IMF - The economy started recovering at a steady space. • The Economic and social Adjustment Program in 1989

with the World Bank - Focus on Institutional reform - Validation of a market-led strategy approach within the country.

TANZANIA DEVELOPMENT

1967-1973 1974-1978 1979-1981 1982-1984 1985-1987

GDP per Capita 2.5 -0.9 -1.1 -2.9 0.7

Inflation (CPI) 8.5 15.1 23.2 30.6 33.1

Exports 3.6 -6.8 7.1 -16.7 6.0

Imports 3.6 2.8 14.3 -8.4 13.8

Ration of net exports to GDP*

-2.6 -9.6 -11.4 -7.1 -12.4

Ration of debt to export+

120.6 187.1 261.1 513.1 902.4

Table:5 – Selected economic Indicators (Percentage annual change)

TANZANIA DEVELOPMENT

GDP per Capita Inflation (CPI) Exports Imports Ration of net exports to GDP*

Ration of debt to export+

-200

0

200

400

600

800

1000

1967-19731974-19781979-19811982-19841985-1987

Graph showing the country performance at a specific period of time according to a particular economic indicator.

TANZANIA DEVELOPMENTYears Value of FDI (In US$ million)

1995 150.86

1996 148.64

1997 157.8

1998 172.2

1999 516.7

2000 463.4

2001 467.2

2002 387.6

2003 308.2

2004 330.6

2005 447.6

2006 616.6

2007 653.4

2008 744

2009 558.4

2010 433.9

2011 854.2

FDI to Tanzania 1995-2011, bank of Tanzania

UNDERSTANDING THE DEVELOPMENT FAILURE

- Pre-colonial experience

- The effect of colonization

“We have been oppressed a great deal, we have been exploited a great deal and we have been disregard a great deal. “ Julius Nyerere during the Arusha declaration - Creation of an hostile attitude toward foreign ideologies - Arusha Declaration, and the nationalization of entities of production.

- High dependence on agricultural products ( Ujamaa villages)

Policies prescriptionA glance at Tanzania problems:Poverty, debt crisis, the bureaucratic corruption, rapid urbanization, balance of payment deficits and budget deficits.

- policy framework that recognizes both the limitations of the states in social and economic affairs, as well as the capability of the private sector to bring about a positive impact in the economy

- Invest in human capital and providing a comfortable economic environment to the private sector and civil entities

- Implementation of a mechanism of sanction and control especially by neutral and independent institution.

Personal view of Tanzanian economy during Nyerere

• Nyerere involuntarily enjoyed by virtue of the loyalty of Tanzanian and the exercise of power.

- His conviction and strong belief on ‘African socialism’ led the state to force socialism upon the people from the top down.

• Could this be the reason why the economy had underperformed during his reign?

INTERNATIONAL COMMUNITY

Graph showing the different type of aid received by Tanzania and other African countries

INTERNATIONAL COMMUNITY

• In recognizing the Burden of slavery and colonization in Tanzania and most African countries in General, the international communities should effectively agree as stipulated Brandt Commission that wealthy nations should pay 1% of their GDP to poor countries to enable them to foster their manufacturing sector.

• The WTO should revise his agreements to equally fit the interest of both poor and rich countries.

CONCLUSION- The economy has been improving steadily- International debt reduction has tremendously help the country.

Graph showing the Annual average growth rates of Sub-Saharan Africa compared to Tanzania compared (2005-2012)

Graph showing the GDP growth rate between Tanzania, Sub-Saharan Africa and Developing countries

- Today, life in Tanzania is still hard; most people are very poor. The minimum wage amounts for about $20 a month. Only about 10% of the population is employed full time. - A vast majority of the youth population is leaving to work in Kenya or the

Arab countries. The functioning of the economy is largely due to foreign workers

- In the case on Tanzania, would it be right to blame Nyerere’s development instead of the International community? Who does the actual growing economy benefit to?

Posted in African Politics, Global Africa, Tanzania by ruben Eberlein on June 12, 2009

Consider visiting Tanzania one day, you will not regret.

THANK YOU FOR YOUR ATTENTION!

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