REVIEW OF THE NATIONAL ECONOMY 1978-79

ANALYSIS of REVIEW of the NATIONAL ECONOMY 1978-79 (Hali ya Uchumi wa Taifa Katika Mwaka 1978-79)
Government Printer, Dar es Salaam 1979. Shillings 20.50. 118 pp.

The latest review of the Tanzanian economy gives, as might be expected, a somewhat confused and bleak picture of the unhappy East African scene, drafted as it presumably was whilst the war in Uganda was still being waged. Indeed, with hindsight, it is clear that the price of military victory has been high not only in precious lives, but also in the inevitable delay to vital development plans. The authors write in the opening paragraph that … “In the period 1978-79, the state of the national economy showed a decline compared with the previous year. The national income increased by 5.6% but this increase is less than the annual increase allowed for by the third Five Year Development Plan (6% per annum) and also less than the increase attained in 1977 (5.9%), although more than that achieved in 1976 (5.2%)”. At the same time all trade between the East African countries virtually came to a standstill as a result of the continued closure of the Kenya/Tanzania border, allied to the effects of the crusade against Idi Amin. Imports rose, but exports fell owing to the lower prices of the main cash crops, with the exception of cashew nuts and tobacco, leading to a worsening trade deficit of £249 millions as against £83 millions in 1977.

More serious, Government recurrent expenditure showed a massive 36% increase over the previous period to reach a record £732 millions and to turn a small budget surplus of just over £1 million into a deficit of £49 million; the Uganda war is the third of four reasons for this expenditure increase, the others being described, somewhat vaguely, as to revise and strengthen services provided by Township Authorities, to provide salaries for various grades of Government and Party leaders in the villages, and to finish off, foster and strengthen various projects started in previous years.

The cost of living continued to rise, with the retail price index for towns in Mainland Tanzania rising by 17% for the last quarter of 1978 as compared to 12% for the last quarter of the previous year, although the index for lower paid workers in Dar es Salaam remained unchanged. In a still mainly subsistence economy, it was fortunate that the output of maize, rice, wheat and other foodcrops continued to increase although, with the happy exceptions of tea and sugar, that of cash crops as a whole declined.

Industrial output continues to lag behind Development Plan targets, factories in many cases falling far below their estimated capacity for the now familiar reasons of power cuts and water shortages, scarcity of experts and inefficiency, plus increased operating costs and higher prices of raw materials. The minerals and building sectors also declined severely, the latter owing to the difficulty in obtaining building materials.

The number of workers in paid employment on the mainland. increased by 2.8% to 511,310 thanks largely to the commercial, agricultural, communications and public transport sectors. The 1978 wage bill also rose by 17.7% albeit not quite achieving the same rate of progress as in 1977.

The tourist trade, which tends to reflect the political and economic climate of a given country, showed signs of a slight improvement, in that the number of visitors rose by 5.1% from the previous year’s low of 118,000 to 148,400 although, strangely, the average length of a visitor’s stay dropped to its lowest ever period of 2-4 days! Again, although there was a sharp drop in the number of visitors to Game Parks from 275,000 in 1976 to only 111,000 in 1978, it was comforting to know that 280 poachers had been arrested and sentenced to terms of imprisonment and fines totalling 21 years and 21,000/- respectively.

This report which, incidentally, has itself gone up in price more than 25% from 15/- to 20/50, must surely describe the nadir of Tanzanian economic fortunes as she is buffeted by the successive blows of Kenyan quarrels and Ugandan war, not to speak of the perennial problems of petrol prices and world inflation. She will find, like others before her, that although the euphoria bred of military and political success transcends purely economic considerations in the short term, only great efforts by her own people supported by the practical sympathy of the outside world, will enable her to regain valuable lost ground. In this endeavour she has the priceless advantage of a broadly based political stability which should be strengthened still further by current hopes for peace in Zimbabwe-Rhodesia.

Randal Sadleir

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