THIRD DEVELOPMENT PLAN 1976-81

Tanzania’s Third Development Plan, 1976-81 (1)

The Third Tanzanian Five Year Plan, which was recently published, contains much interesting information about the state of the economy and its prospects. It consists of four parts, viz. Part I: Targets and General Analysis; Part II: Regional Plans; Part III: Projects; and Part IV: Manpower Development. Though chronologically the third five-year plan for the development of Tanzania, it is in fact the first of its kind, having been produced entirely by Tanzanians and after protracted discussion at various levels. It therefore represents – so far as complex economic documents of this kind can represent – a sort of national consensus about the developmental effort and the allocation of resources in the next few years.

Strictly speaking, the Second Five Year Plan finished on 30th June, 1974, but in view of the economic situation following the oil crisis and the number of uncompleted projects, the period was officially extended for a further year – to 30th June, 1975. A further year was allowed to pass before the introduction of the Third Five Year Plan on account of the national preoccupation with the villagisation of the rural population and the programme for universal primary education (UPE). Another reason for delay not mentioned in the plan was doubtless the time occupied in activating the novel and complex machinery for formulating the plan on the basis of consultation at all levels.

The formulation of the Third Plan was entrusted in 1972 to a Planning Commission consisting of the members of parliament as representatives of the people, with the Prime Minister in the chair. The Commission was assisted by 18 sectoral committees each specialising in a different aspect of the economy, to which experts were attached. The secretariat for the Planning Commission and its committees was provided by the Treasury. A committee consisting of the chairmen of the sectoral committees sifted and reconciled the recommendations of the various committees before forwarding them for debate and approval by the Commission.

Experts were also sent to the Regions to advise on the formulation of Regional and District Plans on the basis of the widest possible consultation with the people. The various regional and district officials of Government and Party were consulted about the choice of projects to be implemented during the plan period and agreed lists of projects were forwarded to the Office of the Prime Minister and the Treasury for further processing and selection and for scrutiny by the Treasury in relation to the available resources and the capacity of the economy. In this way, in comparison with its predecessors, the Third Five Year Plan rested on a wide basis of consultation with the people of Tanzania.

The Plan aims at the fulfilment of four general objectives, viz. the creation of wealth, the building up of the economic infrastructure, the extension of the social infrastructure and the establishment of respect for hard work and self-discipline.

The economic targets of the Plan may be summarised by a declared intention to increase the Gross National Product (GNP) by an average of 6% per annum. This target compares with a planned annual increase of 6.7% in the First Plan and 6.5% in the Second Plan, but during the period of the First Plan the actual average annual increase was 5% and of the Second Plan 4.8%. The target figure for the Third Plan must therefore be seen as an ambitions, though not wholly impossible, figure. Its attainment depends on the standard of the administration of the Plan in all its aspects, the terms and conditions of international trade and the availability of external aid of the form and in the extent desired. The first and second of these conditions of success affect among other matters the timely availability of resources for development purposes, since the increasing complexity of the economy and tte interdependence of its parts calls for a nice synchronisation of production where the output of one sector (e.g. cement or fertiliser) is a crucial input for another (e.g. water development or agriculture); while the import of capital goods for development will depend both on the volume of exports and the prices that they are able to attract.

The actual growth rate so far during the period of the Third Plan, though commendable, has fallen somewhat short of the target figure of 6%; in the calendar year 1976 the rate of growth was 5.2% and according to the Bank of Tanzania there was ‘some moderation in economic activity’ in the middle of 1977. This means that it will be a hard struggle to keep up an average of 6% over the whole plan period from July 1976 to June 1981 and some shortfall in the full accomplishment of the planned targets seems not unlikely.

In the light of the policy of self-reliance, the Plan lays great weight on the importance of increasing the production of export crops and other materials to sustain the import of the materials and equipment needed for development. Income from traditional export products must be increased over the Plan period by almost 100%, while a still greater increase is required out of the earnings of miscellaneous exports, such as timber, tyres, batteries and clothing. Judging from recent performance, this must represent a considerably enhanced production and export effort.(2) The Plan recognises that any balance of development requirements will have to be financed out of foreign loans and aid, but emphasises nevertheless that the main effort must go into trade and not aid. However, the Plan calls for continuing international cooperation with the aim of increasing the volume of loan money on easy terms for developing countries, seeking grants wherever possible and aiming at a general reform of the world economy.

An interesting passage relates to incomes policy, which is integral to the plan. The policy implicit in the Arusha Declaration of narrowing income differences between town and country and between different occupations is to continue, as greater equality of income is considered fundamental to a country based on ‘ujamaa’ principles. But under the Third Plan, while increases in real incomes will have to be coordinated with increases of GNP, consideration will also be given to extra payments based on labour productivity. It is also recognised that the stabilisation of commodity prices is closely bound up with the implementation of an incomes policy. Consequently, emphasis will be placed on the regulation and stabilisation of prices in order to enable industry to produce wealth under conditions of greater productivity.

The Plan envisages the fixing and explaining of baseline labour costs against which the performance of labour can be measured. The agreement of the Union of Tanzania Workers is to be sought in the fixing of grades and to be registered with the Permanent Labour Tribunal. Incentive payments out of the profits of production are to be considered. Finally, there is to be a change in the labour laws so as to emphasise duties and not, as hitherto, only the rights of labour.

Part IV of the Plan gives details of a manpower survey. Manpower planning, though inevitably approximate and prone to error, is an important tool in economic and social planning at the present stage of development, as it helps to ensure both that the essential skills are forthcoming in approximately the right numbers at the right time and that scarce resources are not dissipated by excessive or premature production in any category. Although manpower demand estimates are increasingly uncertain as the economy becomes more complex and transfers of function more numerous, they can still serve a useful purpose by indicating the order of magnitude of demand.

The shortcomings and limitations of manpower planning are well illustrated by comparing the projections in the Second Plan (1969-1974) with the number actually employed in 1975 as ascertained for the purposes of the Third Plan. The divergencies between Second Plan projections and the results of the Third Plan manpower survey are considerable and disclose a growth in employment(3) considerably greater than anticipated. Thus the Third Plan survey reveals a category A employment 32% higher than the Second Plan Projections. Of this excess, 9% is accounted for by the employment of 538 more non-citizens than anticipated in the Second Plan, an interesting indication of the growing diversity of the economy. Ascertained category B employment is 12% higher than the Second Plan Projections and category C employment no less than 148% greater. In particular occupations the differences are also considerable. Only 58% of the projected veterinarians (other than university teachers) were in fact employed. On the other hand, 53% more professional accountants were in post in 1975 than envisaged by the Second Plan.

These figures illustrate the great difficulty of producing manpower projections with any pretensions for reliability, even in a comparatively simple economic structure, partly due to the known fallibility of economic forecasting, of foreseeing changes in employment patterns and of making estimates of productivity changes. In particular, they show how infirm is the basis they provide for educational planning unless checked and revised by trend studies and supplemented by information from other sources.

The Third Plan as a whole contains a large amount of interesting detail on the various sectors of the economy which cannot be appraised without much more information, or summarised in a short article. The total investment envisaged by the Plan over the five-year period is shs. 30,218 million (c. £2,158 million), of which shs. 26,604 million (c. £2,054 million) is for ‘national’ projects, that is, projects developed from the funds of the central government, or national parastatal bodies, and shs. 3,615 million (e. £258 million) is to be devoted to projects financed by the Regions. Of this total capital expenditure, some shs. 21,268 million are to come from the Treasury (including funds from external aid sources) and shs. 8,951 million from specialised domestic banking institutions and other non-governmental sources. So far as the Regional projects are concerned, these extraneous sources will in the main consist of the free labour and other contributions of the villagers themselves. Of the investment in Regional projects, 29% will go into productive enterprises such as village industries, 47% will be used to improve the social infrastructure and 24% to build up the economic infrastructure. The large preponderance of investment in the social infrastructure is mainly due to the national effort to provide primary education for every child reaching school age (7 years old).

This development plan is a remarkably thorough inventory of intentions. the fulfilment of which to a marked degree depends on world factors beyond the central of the Tanzanians. Nevertheless, it is not an unrealistic plan and it provides a framework for orderly progress based on a clear perception of priorities. It may appear that the list of projects in Part III of the Plan is bound to become increasingly unrealistic during the years of the plan due to implementation delays, changes of policy, new needs and opportunities and other influences. But in fact the government also publishes an annual plan in which such changes are recorded and the parameters of the Five Year Plan are updated. Thus, development planning in Tanzania is a continuing process based on a general stocktaking at five year intervals and annual adjustments to take account of changing circumstances. It is a sobering thought that even the complete implementation of this plan will not markedly close the wealth gap between rich and poor countries.

With such solemn considerations in mind, it is incumbent on the rich countries to do everything in their power by way of aid, and still more by way of trade on a rational basis, to help countries like Tanzania to reach their self-imposed targets.

J. Roger Carter

(1) Mpango wa Tatu wa Maendeleo ya Miaka Mitano ya Kiuchumi na Jamii 1 Julai 1976 – 30 Juni 1981. Kitabu cha Kwanza – Shabana na Maelekezo (Sehemu ya Kwanza), Mipango ya Mikoa (Sehemu ya Pili): Kitabu cha Pili – Miradi-: Kitabu cha Tatu – Mpango wa Maendeleo ya Watumishi (1975-1980) (Mpigachapa wa Serikali, Dar es Salaam, 1978).

(2) Unfortunately, the state of the world economy and poor prospects for market penetration do not encourage hope of implementation on such a scale.

(3) In this calculation, ’employment’ is assumed to be the number of people in post and ignores vacancies. It is true that vacancies represent not only transfers, but also advertised posts unfilled because there is no suitable person available. In the Third Plan, 31% of the Category A posts are shown as vacant, but this figure must include aspirations in addition to true vacancies, as it is hardly conceivable that the money could be made available to pay additional salaries on this scale.

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