CHANGES IN THE STANDARD OF LIVING

In January, 1978, in Bulletin of Tanzanian Affairs No.5 we reported on the trend in the cost of living in Tanzania down to the beginning of 1977. Since then, strong inflationary influences have pushed prices up and it therefore seems opportune to review once again the effect of this trend on the standard of living so far as this is apparent from the published figures.

The first general indication of the price trend is to be seen in the national consumer price index. Using a base line in 1969, this index rose by 687% in 1983. Within this period, food prices rose by 807%, clothing by 696%, fuel and water by 855% and furniture and utensils by 1,101%, only rents remaining but 8% above the 1969 level. After the nationalisation of buildings in April, 1971, rents fell by over 60%, but were subsequently increased in stages in 1978, 1980 and 1982. The trend of prices at the end of 1983 is clearly visible in the figures for the fourth quarter. Food prices were then 894% above the 1969 baseline, fuel and water 1,252% up.

The Dar es Salaam retail price index for the lowest paid workers showed a still more serious upward movement, while Dodoma was somewhat less seriously affected. The following table compares the trend in Dar es Salaam and Dodoma with the trend in the minimum wage for urban workers.

Percentage rise over 1969 of the retail price index for the lowest paid urban workers in Dar es Salaam and Dodoma

Dar es Salaam All items, Food
1972 18.6, 20.1
1974 69.0, 77.2
1975 148.5, 165.8
1980 412.2, 460.1
1981 569.5, 619.4
1983 907.9, 961.2

Dodoma All items, Food
1972 14.2, 13.4
1974 47.2, 70.2
1975 99.0, 144.4
1980 292.2, 324.4
1981 392.6, 424.0
1983 706.8, 784.4

Minimum wage % over 1969
1972 35%
1974 70%
1975 90%
1980 140%
1981 300%
1983 300%

Source: Hali ya Uchumi wa Taifa katika Mwaka 1983: Dar es Salaam 1984

The conclusion from the above table is inescapable that the standard of living of the lower paid town dwellers has fallen substantially. In July, 1984, there was a further rise in the minimum wage to 405% above the 1969 level, but the disappearance of the sembe subsidy in the 1984 budget must have given a simultaneous boost to the retail price index. The widespread cultivation of spare patches of land in Dar es Salaam, even to some extent in the middle class suburbs, is evidence of the straightened conditions in which many people now live.

There is no doubt that the pressure on urban populations shown by these figures is a cause not only of great anxiety on behalf of those affected, but also of concern for political stability. The figures well illustrate the caution shown by the Tanzanian government in accepting some of the more draconian proposals of the International Monetary Fund. Owing to the very great difficulty in bringing inflation quickly under control, the situation is unlikely to get better in the short term. The real solution to the problems of the urban poor is a turn round in the economy and every day that passes without an IMF agreement only exacerbates the problems of regeneration and increases the dangers of political disorder.

J. Roger Carter

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