Adjustment Policies in Tanzania, 1981–9: The Impact on Growth, Structure and Human Welfare

Abstract

Four main structural weaknesses characterised the Tanzanian economy at independence in 1960. First, relatively poor soils, a difficult climate and skewed transport, credit and extension service networks constituted major hindrances to rapid agricultural advance. Although much of the land was of poor quality, its relative abundance permitted low-level subsistence agriculture, which fostered circulatory migration. Other primary activities, including mining, were also little developed. Second, while foreign trade accounted for an important share of national output, exports were heavily dependent on a few primary commodities subject to large fluctuations in prices and foreign exchange earnings. Third, there was a strong dualistic pattern in the distribution of the limited available modern physical facilities and commercial and financial services. These facilities and services dealt with the requirements of the enclave sectors and the rapidly growing urban population but not with the needs of the majority of the rural population. Fourth, the shortage of indigenous technical, managerial and administrative cadres and modem sector entrepreneurs was acute. The country was therefore faced with the difficult choice between the rapid Africanisation of the civil service, with inevitable losses in efficiency, or continued reliance on expatriate manpower.

A more detailed discussion of the themes of this chapter can be found in Wagao (1990).