STRUCTURAL ADJUSTMENT PROGRAMME IN TANZANIA

STRUCTURAL ADJUSTMENT PROGRAMME IN TANZANIA

Tanzania got her independence in 1961 at that time it was under the leadership of Julius K. Nyerere, Tanzania adopted and practiced socialism even though, the country was a multi-ethnic society, all the groups were united by the language of Kiswahili introduces by Nyerere.

Background to the Introduction of S.A.P in Tanzania

In the late 1970s and 1980s, there were problems in the economies of developing countries, especially Tanzania making her one of the poorest country in the world. During and after colonialism, the main export of Tanzania were raw materials such as sisal, cotton, coffee, tea etc. about 80% of the population were employed in the agricultural sector while agricultural products provides about 60% of the GDP, during the 1960s and 1970s, Tanzania introduces self reliance policies; these includes the policy of indigenization introduced in 1967, this policy help villages to obtain markets of their products improved infrastructures health and educational services.

There was a service drought in Tanzania in 1973/1974 and 1978/1979 leading to a fall in cash crops and food crops production. By 1978/1979, Tanzania fought with Uganda, this have a lot of consequences to national economy and well being of its citizens. In addition to this, was the collapse of world market prices. To tackle these problems, Tanzania turned to IMF for assistance, IMF and World Bank seeks this opportunity and attempted to transform it economy to a free economy by trade liberalization and privatization.

In 1979, Tanzania sought to a standby loan from IMF but they were not given because the country fails to implement the national economic survival programme. In 1981, Tanzania run a program & policy measures to includes:

·         Increase in agricultural products by 46 – 55%.

·         Depreciation of Tanzania currency by 40%.

·         Elimination of subsidy.

·         Liberalization of trade.

·         Privatization of public sectors etc.

From 1983, series of adjustment programmes were introduced, these includes;

·         Economy Recovery Program (ERC).

·         Economy and Social Action Programme (ESAP).

ACHIEVEMENT OF S.A.P IN TANZANIA

1)    There is improvement of agriculture and consequently, improvement of food and crops production.

2)    Improvement in provision of social amenities likes roads, rails, etc. and the one produce by colonial was renovated.

3)    Funding of primary education & health care services were made easier

4)    Transformation of the society from a socialist to a capitalist state.

EFFECTS OF S.A.P IN TANZANIA

1)    Removal of subsidy and devaluation of currency led to a fall in living standard of the citizens.

2)    Tanzania further became a capitalist independent state.

3)    Govt. losses control of the economy to capitalist countries of the world.

4)    S.A.P also increases financial indebtedness in Tanzania.

5)    Agric policies under S.A.P. increase environmental degradation in the country.

In summary, Tanzania depends on agriculture export, i.e. coffee, tea, spinach and other crops. Around 70s and 80s they also experiencing economic crises like the other countries; to worsen the situation, Tanzania was practicing socialism which was against the capitalist states and there was cold war between the capitalist and socialist state; their economy was seriously affected and there was corruption.

The conflict between Tanzania and Uganda affects Tanzania as they cannot survive and this led them to accept S.A.P

Around 1978-1979, they apply for a loan to revive their economy but they were denied that loan, they were ask to restructure their National Economic Survival Programme to:

1)    Reduces the value of its currency.

2)    Open the boarders for traders.

3)    Increase the prices of agricultural products.

4)    Creates other capitalist programmes.

In 1983, they were given loan and S.A.P. was introduced.

It was expected that all those programmes will revive the economy of Tanzania, but at the end, only few achievements were made. However, the issue of converting the country to capitalist led peoples to have rights; and the government loses power in the country's economy. They became only producers of raw materials needed by manufacturing industries in the Western world.

            Agriculture as at then was the major sources of income of the country. If the S.A.P wants to help Tanzania revive from agriculture, they would have encouraged industries creation of the country. Tanzania still depends on the west for finished products and providing raw materials; the loan collected by Tanzania led them to be loaded with lots of depts.