Failed Economy : Tanzania: A Vision Worn Thin

The university student, having exhausted himself in a mental search to find the reasons why he must carry a plastic bucket of water up three flights to his dormitory room to bathe, wash his clothes or flush his toilet, hits on the only answer he can find. “It is a problem,” he says, “of technology.”

The newspaper editor responds similarly as he probes the puzzle of the nation’s deadened industry, its failing agriculture, its leaden bureaucracies, its burden of bankrupt state-owned business.

“Implementation,” he decides. “Implementation has been poor.”

The government clerk, grateful to have avoided spilling his little can of gasoline on his pants as he escapes from the crowd clutching at the pump, uncoils a length of plastic hose and waits as his gallon of gas dribbles into the tank of his battered car. Blotting his brow with a folded handkerchief, he gives his considered opinion:

“It is a question, you see, of a lack of foreign exchange. That is the problem. Foreign exchange.”

Old Excuses

Such meditations pass for analysis in Tanzania these bleak days. In past years, Tanzanians have picked on the weather and an old Ugandan war to blame for the miserable state of their economy, but even these excuses (though still useful) have worn threadbare.

The evasions and obfuscations left to Tanzanians give the surface impression that a nation of 21 million people is suffering from a form of mass hypnosis. The possibility that some more fundamental fault may exist in Tanzania’s socialist system apparently remains unthinkable, or at least unutterable.

But beneath the surface, deep dissatisfaction and demoralization are present, and many thoughtful Tanzanians, when they are sure they are not being quoted by name, make it clear that their enchantment with socialism has long since faded. What to do about it is another problem, and one that shows no sign of being resolved soon.

Nyerere’s Vision

Tanzania is a case study of a country that ought to be better off than it is. Its potential is greater than that of most other countries in Africa, but it remains hobbled by one man’s stubborn vision of a so-far-unresponsive ideal.

A fresh sifting of the ashes is under way now in the aftermath of the departure from office of President Julius K. Nyerere, who, at the age of 63, joined the small circle of African leaders who have voluntarily retired from office.

No one, however, is holding his breath in anticipation of swift change. Nyerere has retained the leadership of the nation’s single and all-powerful political party for at least two more years. And his successor in office, Ali Hassan Mwinyi, has taken pains to point out that the party remains the “supreme organ” of the land and that he intends to carry out its will.

So Nyerere remains the nation’s dominant political force.

He occupies a special place not just in Tanzania, but in Africa. He led Tanzania to independence 24 years ago, and he remains the most distinguished of Africa’s post-independence leaders, a gray eminence in the councils of the Organization of African Unity, a relentless campaigner for the liberation of southern Africa and a man of modest tastes who has eschewed the wealth and overseas bank accounts that have tempted so many of his peers.

And he has left behind some notable accomplishments. Tanzania’s people are to some extent united by a common language, Swahili, and a refreshing absence of the tribalism that divides many other African states. His emphasis on education has brought literacy to 79% of the population. Basic health care and clean drinking water have been extended to millions, even in rural areas. Peace and stability have prevailed.

But prosperity has eluded Tanzania. The African socialism that Nyerere regarded as being somehow appropriate to the spirit of the village and the land, and which he decreed in the Arusha Declaration of 1967 as the national path for Tanzania, has proved an economic failure.

Inert Bureaucracy

The government, which was supposed to ensure that Tanzania’s wealth stayed in the hands of a self-reliant people, has become instead an inert, cash-absorbing bureaucracy (including 400 state-owned industries and corporations, nearly all huge money-losers) whose weight rests on the backs of the people it was supposed to serve.

Tanzania today is about as broke as a country can be. After nearly two decades of international good will that has made Tanzanians the world’s highest per-capita recipients of foreign aid, the East African nation has run out of credit and exhausted the patience of its durable sympathizers.

Late last month, an Iranian oil tanker arrived in the port of Dar es Salaam but waited days to unload at the refinery, which had already been idle for two weeks because its tanks were empty. The local newspaper attributed the unloading delay to “financial hitches.”

“What that means,” a Western diplomat said, “is they haven’t paid for the oil or they haven’t paid for the shipping charges, and the captain will not unload until the money is paid. In this case, I suspect they’ve paid for the oil but can’t raise the money for the shipping charges. What we are talking about here is something in the neighborhood of $50,000, so you can see what kind of shape they are in.”

Tanzania has exhausted its credit with the world’s oil salesmen. Even its friends--Algeria, Libya, Iran--deal with Tanzania on a cash-only basis. All of them, according to economic sources here, have been burned before.

Tanzania has had many supporters in the world, and many would most likely become more active on its behalf if they detected a change in the country’s basic policies.

Agriculturally, the country has a potential that economists say has yet to be scratched; well managed, it could feed all of East Africa. Its mineral resources, similarly undeveloped, include nickel, coal, gold, diamonds and semi-precious stones.

Its tourist parks--the stunning Serengeti reserve, the Ngorongoro Crater, the vast Selous park--are unrivaled in black Africa.

But the parks are virtually empty of tourists, minerals are still in the ground and the farmlands largely fallow because even the most sympathetic aid donors and careful planners have been unable to overcome the apparently crippling handicap of Nyerere’s economic system. When the system changes, they say, Tanzania’s future may brighten. Until then, the road looks bleak.

“The time for Tanzania to start realizing its potential,” a Western economist said, “is quite a few years away.”

World Bank Action

In October, the World Bank stopped disbursements on all its projects in Tanzania because the government was so far behind in its payments. It is in arrears, as well, to the African Development Bank and the Export-Import Bank. A longstanding $10-million debt to the U.S. Agency for International Development is leading to closing of the last American aid projects for Tanzania.

Overseas debts to private companies go back as far as 1979. Tanzania’s total foreign debt, approaching $3 billion, is not large as nations’ debts go, but no progress is being made toward paying either the principal or the interest that keeps piling up. Negotiations with the International Monetary Fund have proceeded fitfully over the last two years without agreement.

Nyerere has taken a hard line toward--and has been a leading critic of--IMF policies in Africa.

“Should we really pay our debts to the rich, before providing food aid for our people to prevent starvation?” he asked recently, “or should we answer brute power with the power of the spirit and say no?”

In the meantime, Tanzania’s industry is working at no more than 25% of capacity, handicapped by the lack of cash to import spare parts and raw material. (Bank accounts of state-owned corporations are frequently raided, as some were late last month, to scrape up enough money to unload an oil tanker.)

The nation’s agriculture is in tatters. In border regions, Tanzanian farmers sell across national boundaries to get more return for their crops. Tanzanian coffee is routinely smuggled onto the world market through Kenya and Burundi.

The amount of time consumed by many Tanzanians just to search out the necessities of life has become debilitating to many. In some parts of the country, half of an ordinary bar of soap costs the equivalent of $2. A roll of toilet paper is $2.50.

If many Tanzanian workers seem absent from their jobs as much as 50% of the time, it is because they are out looking for cooking oil, rice or laundry soap.

“Everyone understands,” explained a young man working in the Finance Ministry. “You have to do it, you have to tolerate it. I know a man who can always find me soap when there is no soap in town. Sometimes I help my friends get it. Now I need brake fluid for my car, so I’m looking for a friend to repay my favor. That’s how we get by here.”

‘Real Anger’

A university professor described what he called “the seething frustration” behind the accepting face that Tanzanians wear for the outside world.

“There is real anger here,” he said. “Most of the people in this circle (the university faculty) have been abroad; they know what the world is like, and they feel cheated. They feel there is no need for it to be this way. They feel they are professional people and they are spending a quarter of their time out searching for a bag of rice or a box of soap. It takes a real psychological toll.”

The constant scrounging has taken a toll, also, on the once relatively uncorrupted civil service. Venality in high places is now an accepted fact.

“The corruption has been worsening over the last five or six years,” said Andy Chande, a prominent Asian businessman who has served the Tanzanian government in several important posts since independence. “Before that, there was almost no corruption here. Now, I have to say that it is very widespread.”

Most observers attribute the increasing corruption to the entrenched bureaucracies--and to the ruling Revolutionary Party.

“Go out into the hinterland,” said a European diplomat, whose government has been among Tanzania’s supporters, “and see who has the fuel to drive around. It will be government officials and party officials--and mostly the party. They’re like little kings.”

The government has been talking for some time about cutting down the size of the bureaucracy, but the effort is clearly painful. A few months ago, it fired about 27,000 government workers but quickly put 15,000 of them back to work on local payrolls. The verbal assault on the evils of the bureaucracy is continuing--it seems to be the crusade of the moment in Tanzania--but the ax has yet to fall.

A Nation of Meetings

Instead, Tanzania holds meetings. It is a country where great faith is placed in the efficacy of talk. A visitor to the country gets the impression that at any given moment about half the government is away at some conference or retreat, some basic rethinking of basic problems, very few of which seem to arrive at any basic solutions.

Arusha, the site of Nyerere’s 1967 declaration, is a favorite venue for these gatherings and so is Dodoma, the planned new capital, where he has taken up his duties as the party’s full-time chief. Out of this stew of words, the same morsel of guidance is finally extended to the public: Tanzanians will have to work harder.

Just why they should want to remains obscure, since the system in Tanzania offers virtually no reward for hard work, enterprise or imagination. A worker cutting sisal on the government’s nationalized (and now largely ruined) sisal estates gets paid the same whether he lazes through the day or sets out in the morning to be the world’s best sisal cutter. The pattern is repeated in every government enterprise in the nation.

The regime recently decided to return those sisal estates to private enterprise, if takers can be found, realizing that it had been unequipped to manage them.

There has also been talk that the government may offer its coffee holdings, which produce only 5% of the nation’s total harvest, to private owners as well. But financial advisers here warn that no quick shift toward private ownership can be expected. Overseas investors, wary that Tanzania still has not drawn up an investment code, are staying well away, despite the country’s significant potential.

In the unofficial marketplace, however, the one that some Tanzanians call “the second economy,” private enterprise is flourishing. It might also be called “the survival economy.” Unofficially, it has been the subject of a lot of talk around Dar es Salaam lately.

Economics Prof. Ted Malayamkono has written a paper describing it. “It’s simply a way people have devised to make a living outside the system that is not supporting them,” he said. “I myself raise a few cows. Some people keep chickens in their backyards. People plant gardens. Nowadays, a person cannot make any money bringing spinach into Dar es Salaam because everyone is growing it in their backyards.”

Very Private Enterprise

The system works in a hundred related ways, but it all adds up to private and sometimes surreptitious enterprise. Law professors moonlight quietly, giving legal consultations on the side. Government physicians, enjoined from maintaining private practices by law, operate unofficial clinics and take afternoons off from their hospital jobs to make house calls. Malayamkono says he has discovered about 500 restaurants operating out of Dar es Salaam backyards, operated by housewives trying to make enough money to feed their families.

In addition, of course, black market activities are growing and thriving. Those with access to scarce basic commodities--usually corrupt petty officials--slip them out the back door of the warehouse to willing speculators. Some schoolteachers run petty rackets to shake down “donations” from their pupils; the children catch on, run the same scheme past their parents and give the whole system a name: michango (cash contribution).

On the streets, black market currency dealers offer seven times the official rate for the overvalued Tanzanian shilling. As in most countries where the economy is in collapse, almost everything is for sale.

It is ironic, as a resident economist here noted recently, that Nyerere--a dedicated socialist, his faith still unshaken--should preside over a nation so rapidly filling with entrepreneurs and speculators, working darkly in the cracks of his crumbling system.

“Nyerere is an idealist,” said a Tanzanian businessman who once knew him well and worked in his government. “I was once sitting in a doctor’s office when Nyerere’s secretary called to inquire if he could pay his son’s doctor bill in three installments. That’s Nyerere. If I know him, he was upset because his son had gone to a private doctor.

“Nyerere never liked money. He never had it. He never understood it. He never wanted it. He thought Tanzanians should be the same.”