Chairman’s address to the National Conference of Chama cha Mapinduzi given on 20th. October, 1982, in Dar es Salaam. As the full address occupies 66 pages, the following is a summary-of the main points contained in it.

The address begins with a brief survey of Tanzania’s foreign policy and reaffirms commitment m the liberation struggle in southern Africa, support for the Organisation of African Unity, active participation in the Non-Aligned Movement, the United Nations, the Commonwealth and special meetings such as that at Cancun, regional organisations such as the Southern Africa Development Coordination Conference and the Kagera Basin Organisation, and the building of friendship with all countries on a basis of mutual respect.

On 5th. February, 1977, he reported to the Party on the national economic and social situation ten years after the Arusha Declaration and warned that despite the progress that had been made the next three or four years would be very difficult. That has certainly been the case. World recession has created economic difficulties for developed and developing countries alike and this is the world environment in which Tanzania has to live and do business. Tanzania has been very seriously and very adversely affected. In addition, Tanzania has had to repel and destroy an aggressor. Tanzania now faces formidable economic problems and declining living standards and it is on this front that it now has to fight back, correcting past mistakes, overcoming weaknesses and keeping clearly in view its basic goals.

“The basic problem is that our earnings and our consumption are out of balance; we are consuming more than we are earning. We are not earning enough to pay for all the things we need to buy from abroad if we are to feed, clothe, educate and care for the health of all our people as well as provide all the tools, the spares and the raw materials for the factories we have already built” and “our young industries, or enough transport and fertiliser and insecticide for our agriculture … The shortage of imported goods is compounded by a shortage of Tanzanian goods.. ..The shortage of goods reduces Government revenue and … even the money the Government does get from taxes buys less and less goods and services … The drop in our earnings arose partly and seriously from the fall in the price of the goods we sell; but in many cases there has also been a fall in the quantity we put on to the world market. Imports, on the other hand, have gone up in cost year by year … It is the lack of imported goods which is causing many of our factories to close.”

The prices of imports have increased much faster than those of exports. Despite the growth of population, in 1981 oil imports were only 70% of the 1972 figure, but the oil bill in foreign exchange increased more than sevenfold. In contrast, the price of coffee fell over 5 years by 40%, tea by 29% and tobacco by 12%. The prices of cotton and sisal have risen, but this has been offset by falls in production. The breakup of the East African Community cost Tanzania the loss of many vital maintenance, training and communications facilities and required expensive investment to create an airline, civil aviation support services, railway repair workshops, central postal services and an earth satellite, nearly all of which had to be paid for in foreign exchange. The war in Uganda in which 684 soldiers were killed and 467 seriously injured cost over shs. 4,000 million, a large part in foreign exchange. Finally, there have been problems with the weather, a succession of bad harvests, droughts, floods, damage to roads, bridges and crops.
These external problems have been the main cause of our difficulties. But problems have also been caused by our own successes. First, as a result of rising expectations people now expect to be ace to drink tea with sugar, wash with soap, light their houses with paraffin lamps, buy new clothes sometimes, obtain cement and corrugated iron for their houses and secure medical help when they are ill. These are things that the people did not expect 20 years ago. Primary education has expanded from half a million children in school in 1961 to three and a half million in 1982. The establishment of industries and the expansion of road transport have created a need for imported fuels, spare parts and chemicals. Investment in social services has greatly reduced the infant mortality rate and as a result the population has doubled in 20 years.

But we have also suffered from our own mistakes and failures. My appeal in 1977 to improve industrial discipline, reduce costs and increase efficiency in both parastatals and Government has had little effect. Payrolls, particularly at senior level, have been maintained even when production is much reduced. Since 1977 employment in Government ministries has increased by 35%.

Policy making has been done with great seriousness, but decisions are not always carried out and financial regulations are often ignored with impunity. Our most fundamental failure is perhaps our neglect of the principles of self-reliance. Traditional skills in carpentry and metal working have not been used to make good shortages of imported tools and equipment and in this there has been little improvement in detail, and none in attitude, since 1977.

However, “things have changed for the better Virtually everywhere, so that village life is now very different from life in the isolated homesteads we knew a decade ago. Almost all villages now have a primary school; 90% of them have at least one cooperative shop; about 31% of the villages (and about 40% of the village people) now have easy access to a safe water supply; and well over 30% of the villages have either a dispensary, or a health centre, with others being served by regular clinics.

Elected village governments have now become active institutions, initiating and running their own development activities …. We have passed legislation which will allow District and Village Councils to raise money locally …. Urban Councils were reestablished in 1981; an Act to establish District Councils has been passed … An Act has also been passed to establish a new Cooperative structure.”

In the health services emphasis is being laid on preventive work, which does not require expensive training or drugs.

Already 10.6% of the recurrent budget is spent on education. Adult education is now making an important contribution despite shortages of materials and Universal Primary Education (UPE) has made great advances, though much remains to be done in improving its quality and integrating the school into village life. Unfortunately, the post-primary technical centres, so important for supplying the villages with skilled craftsmen, do not seem to have attracted much interest or support. The Government will continue to emphasise the importance of technical and vocational training so vital to our development. Although the proportion of primary school graduates who go on to a secondary school has now fallen to 2•6% as a result of UPE, we cannot at present afford more secondary school places and will concentrate for the time being on consolidating what already exists. At the University the proportion of women students has now increased to 23.8%. There are still not enough qualified students coming forward from our secondary schools to fill all the available places in science-based subjects and we are trying to rectify this by earmarking 60% of the science graduates for training as teachers in our secondary schools. But university education is enormously expensive- on an average about shs.70,000 per student- and the University authorities are now looking into the means for reducing this very heavy cost.

The Dar es Salaam bus service has less than half the buses it needs to provide a good service and less than half of these are actually in service. Low fares, which have not increased since 1974, contribute to the low level of service. The joint Tanzania Chinese Shipping Line is operating successfully despite unfavourable world conditions, but the Tanzania Coastal Shipping Line continues to have severe problems despite valuable support from Norway. The railways have also been operating under severe difficulties, but with the help of Canada and other countries steps are being taken to reverse the decline. The railway system is crucial for the movement of agricultural exports to the ports and food from surplus to deficit areas.

The two extensive natural gas fields at Songo Songo and Kimbiji will take 5 to 10 years and much capital to develop, but agreement has been reached for the manufacture of ammonia and urea out of the gas at Songo Songo and negotiations are proceeding on the financing of the large investment involved.

In internal trade, pan-territorial pricing is being revised to allow Regional Trading Companies to add the cost of transport to the price of heavy goods. The number of goods subject to price control is being reduced to the most essential as an aid to proper enforcement.

In terms of factories built, industry can offer a success story. Some 43 new big projects have been completed since 1977 and another 28 are in an advanced stage of building. But industry has been heavily import-dependent in terms of raw materials, machinery, fuel and, in some cases, management. Starved of foreign exchange for the past two years, industrial production has fallen from over shs. 1,000 million in 1979 to shs.648 million in 1981 and average factory utilisation is now between 30% and 50%, which means high production costs. Small scale industry expanding under the auspices of SIDO has a much better productivity record. It has also been more resistant to economic crisis. Some large factories will have to be closed as a short term measure to allow others to receive enough of their imported requirements to enable them to operate profitably and efficiently.

“It is upon the agricultural sector that Tanzania depends for the earning of all the foreign exchange needed by the transport sector, the social services, the defence forces, the administration, industry- and agriculture itself. Whatever we call success in Tanzania is largely a success created by the peasants …. Although it is agriculture which is basically responsible for all the successes on which we pride ourselves, we have not been developing agriculture itself. And now it cannot bear the load we have put on to it.”

The urban and the non-productive rural populations have been growing fast – faster than the development of agriculture. The output of cash crops has been especially affected. Except for coffee and tea, where production has remained about the same, the output of all major export crops has declined in the last five years. “These figures cannot be attributed solely to drought and although special explanations can be given for the decline of each particular crop the evidence suggests that some more general explanation has to be sought for the decline over so many crops.”

The increasing use of high productivity seeds for cotton, maize, millet, sunflower and many other crops is a ground for hope, but their reproduction in sufficient quantity takes time. Another good sign is the expansion of improved beef and dairy herds and the improvement in beef sales. But the fact remains that the explanations so far offered for our declining production do not appear to go to the heart of the problem. Some say that it is the result of our socialist agricultural policies, but the amount of socialist agriculture that exists so far is very small. For the most part agricultural production comes from individual peasant farms. There are indeed some communal village shambas and some are productive, but their total contribution to village output is slight. It is because those villages with large communal farms are so successful that a rapid extension of them has been urged in the 1981 Party Guidelines.

It is also not possible to pin the blame solely on the crop authorities and other agricultural parastatals, though they do have many serious faults. Administrative costs are much too high, there are delays in supplying fertilisers, insecticides and other inputs, crops are not always collected promptly and payment to farmers is often seriously delayed. Steps are in train to remedy these faults, but the problems of agriculture are more deep-seated.

One fundamental reason for our shortcomings is that, in spite of professions to the contrary in the Arusha Declaration, in ‘Siasa ni Kilimo’ and other statements, agriculture is not central to our planning and our thinking. Another lies in our neglect of the soil and the need to maintain soil fertility by the use of compost, manure, fertilisers and appropriate crop rotations. Further, we have failed to provide better implements, even enough hoes, and the ploughs and other implements suitable for use with ox traction are commonly not available. Very little use is made of our many rivers and lakes for small scale irrigation. In large areas of Tanzania land is being turned to desert by over-grazing and the careless removal of trees. It is gratifying to note that village fuel woodlots are now being grown in some villages and that 12,000 hectares of trees were planted last year. But a more widespread practice of contour ridging, as already practised by the peasants in Mbinga District, is essential if we are to protect our soil from total destruction. It is our land that is at stake.

Where do we go from here?

First, we must remedy those things that are within our power to remedy. Then, although we do not like their prevailing ideology, we must do all we can to reach agreement with the International Monetary Fund (IMF). But the IMF alone cannot solve our problems. Neither the IMF, nor the World Bank, nor anyone else will provide us with all we need for our rehabilitation. Only we ourselves can stop our economic decline on a basis of self-reliance. There is no other choice.

“In the light of our experience and further expert investigation, Government has now prepared the Structural Adjustment Programme. Its main objectives are: to increase production; to reduce the rate of inflation; to alleviate the foreign exchange shortage so that output and efficiency can be increased; to increase productivity in all fields and in particular to improve the management of the public sector; and last but not least to do these things while maintaining the advances we have made in income distribution and the social services.“

“The Structural Adjustment Programme (SAP) is a programme of consolidation, not of expansion. Hardly any new projects will be undertaken. That includes especially new projects in the social services, which in the short term are consumers of wealth and not producers of it. We know that new schools, new dispensaries, new social welfare arrangements, etc., are urgently needed. But we have been forced to recognise that what we do not produce we cannot consume. It is going to be extremely difficult, and require all our combined efforts, to maintain our present health and education services. We shall not be able to expand these services in the coming few years ….

Our task in the case of industries and agriculture is to rehabilitate the most important factories and large farms which now exist and to provide them with spare parts, fuel and other raw materials without which they cannot operate …. There will be no new cars imported …. We shall concentrate any foreign exchange we have for transportation on the purchase of spare parts, with priority given to lorries, bicycles and motor cycles- in that order. The cars which do get spare parts will be those used in the productive sectors and those used by the disabled and the elderly …. To continue to expand consumption in money terms without any increase in the production of goods … Simply leads to inflation … Recurrent expenditure … will go on being cut until it begins to compare.’ again with Government’s actual revenue.”

The political difficulties of such a programme for every minister and every member of parliament are acknowledged. But there is no alternative. Of great importance are better incentive systems and better economic management, planning and control. For the management of SAP a special implementation secretariat has been set up in the Ministry of Economic Affairs and Development Planning. But in the end the success of SAP depends on all Tanzania’s citizens. The maxim ‘kila mtu afanye kazi’ must be made a reality. Almost every country in the world is facing problems. But those that succeed in overcoming them will be those with good policies and good programmes and the determination to implement them whatever the difficulties in a spirit of self-reliance.

Abbreviated from the address by Julius K. Nyerere

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