REVIEW OF THE NATIONAL ECONOMY, 1976-77

ANALYSIS OF REVIEW OF THE NATIONAL ECONOMY, 1976-77
Hali ya Uchumi wa Taifa Katika Mwaka 1976-1977, Government Printers, Dar es Salaam, 1977, Shillings 14.70

Amazingly the price of the report is now nearly halved – a refreshing start to a much more cheerful document since the state of the economy showed considerable improvement over the previous years. The National Income increased by 5.2% compared with 4.6% in 1975 and only 2.5% in 1974, whilst the food situation eased considerably although it was still necessary to import shs. 177.6 million worth of grain to bridge the gap between production and consumption. The food sector increased by 4.7% and other key sectors such as industry (6.2%), Transport and Communications (6.1%) and Electricity and Water (5%) also increased significantly. Only the wholesale-retail trade showed a decrease, mainly because of greatly reduced orders of overseas goods especially foodstuffs. The balance of payments showed a welcome turn-round, exports increasing from £130 million in 1975 to £205 million in 1976, an increase of 49.6%, while imports declined by 4.8% from £284 million in 1975 to £271 million in 1976. As a result the trade deficit narrowed to £65 million compared to £146 million the previous year. Coffee sales played a big part, accounting for 31% of all exports; cotton, tobacco and tea also fetched good prices. Foreign currency reserves increased accordingly from £55 million to £74 million.

Although prices continued to rise in 1976 the inflation rate began to slow down from 15.2% in 1975 to 12.1% in 1976, helped by a considerable fall in the retail price index for lower paid workers in Dar es Salaam from 33.9% to 14% during the same period. The difference between a ‘developed’ and a ‘developing’ country strikes one forcibly when one notices that instead of an endless preoccupation with unemployment this report refers to a 3% reduction in employment from 470,799 paid workers in 1975 to 456,787 in 1976, with a concomitant 2.2% drop in the total wages bill. A very different ‘ball-game’ as the Americans have it!

There was a 16% increase in all buildings completed and a 34% increase in buildings other than housing, mainly schools and factories, but also including the beautiful Mount Meru Hotel at Arusha whose foundation stone ceremony I attended in 1973. The completion of the great KIDATU hydro-electric scheme added 100 megawatts to the national grid and also reduced the incidence of power cuts listed by the authors as one of 8 reasons for disappointing industrial output in a number of plants – similar to last year’s frank list of shortcomings. However some comfort can be gleaned from the 104% increase in flour production and the 18% increase in the output of beer and chibuku resulting from the improved wheat crop.

On a sadder note a short but poignant paragraph states baldly that ‘in the period 1976/77 the East African Community was in a state of confusion. This period witnessed the break-up of the East African Harbours, Railways and Airways’. It is good to see in a recent news-report that reconciliation is now hoped for early in 1978, since only a truly unified East African Community makes economic sense for young nations struggling for higher living standards in a harshly competitive world.

Randal Sadleir

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