Tanzania: Failure of Ujamaa (1976-1986)
Updated September 2010
On February 5, 1977 the goal of a one-party state was finally realized when the mainland Tanganyika African National Union (TANU) merged with the Zanzibari Afro-Shirazi Party (ASP) to form the Chama Cha Mapinduzi (CCM, "Party of the Revolution"). A new constitution was adopted shortly thereafter legitimising the relationship between the new party and the state. Divisions between the two parts of the union and between the two wings of the party persisted and almost reached breaking point in the mid-1980s (Talbot 2000, Columbia Encyclopaedia 2004, US State Department 2005).
Quarrels between Uganda and Tanzania, patched up in 1973, climaxed in 1978 when Idi Amin Dada invaded Tanzania. Tanzania mobilized its forces rapidly, expelled the Ugandans and advanced towards Kampala. Amin fled and the Tanzanians occupied the capital in April 1979, restoring Milton Obote to power. The war drained the country's resources and placed additional strain on the country's already fragile economy (Lupogo 2001, Columbia Encyclopaedia 2004).
By the early 1980's it was clear that Tanzania was heading towards an economic crisis (PBS Foundation Undated, Columbia Encyclopaedia 2004, Temwende 2004, 2):
- Uncontrolled growth in the public sector, and in government spending, combined with corruption and poor productivity formed one part of the equation.
- A second part lay in state involvement in the economy and resistance of the peasantry to the coercion that created the village system, leading to declining agricultural productivity.
- A third is found in the cycle of alternating droughts and floods that wracked the country at the time, reducing exports and foreign exchange earnings.
- All this was compounded by the oil price shocks of the late 70s that increased demand on Tanzania's foreign exchange earning just as these themselves were declining.
Despite massive state investments in agriculture the GDP share of this sector declined between 1965 and 1975 from 56% to 42%, while the neglected manufacturing sector's share increased from 4% to 11% (Chachage 2003). The difficult condition of the economy was reflected in the depreciation of the shilling by 25% in 1984, while wage levels declined and inflation soared to nearly 40%. Foreign currency reserves plummeted dramatically from US$ 281.8 million in 1977 to US$ 20.3 million in 1980 (PBS Foundation Undated, Chachage 2003). State share in economic activity had expanded dramatically. Chachage (2003) notes: "There were nearly 400 parastatals handling production, processing, transportation, and marketing of goods and services. Prices of almost 1 000 commodities were also controlled by this period". Plagued by inefficiency and corruption they proved to be a drain on state income. In agriculture profiteering in the 108 state marketing and distribution firms was directly at the expense of the peasants (Chachage 2003).
The deepening economic crisis thus took the form of falling agricultural production and export earnings, a declining balance of trade and falling foreign exchange earnings, spirally inflation and unemployment and deteriorating state finances and private income (Chachage 2003). During this period the villagisation programme began to disintegrate as peasants deserted the villages (Columbia Encyclopaedia 2004). The increasing involvement of foreign donors and the progressive decline of the public sector led to a privatisation of development effort and the emergence of a variety of non-governmental agencies (NGOs). These played an ever more important role as state social-economic developmental programmes were reined in (Chachage 2003, Ewald 2002).
Declining economic conditions on the mainland led to strains between the Zanzibari and central governments as conflicts emerged over the utilisation of export earnings from clove production. Demands for the secession of Zanzibar rose. Matters reached a head when speculation with the clove harvest by Jumbe led to massive losses by the state in the export of cloves. Fearing a break-away, in 1984 Neyere occupied Zanzibar with troops and forced Jumbe's resignation (Talbot 2000).
Nyerere had consistently resisted pressure from foreign donors and especially from the International Monetary Fund to embark on the economic reforms outlined by the IMF as the Structural Adjustment Plan, but by the time he stood down as president, in 1985 he admitted that Umajaa had failed (History World undated). By the time he was succeeded to the presidency by Zanzibari President Ali Hassan Mwinyi there was little scope for the government to manoeuvre on economic policy (History World undated).
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