Global Policy Forum

A decade of liberalisation has earned Tanzania, which goes to the polls on Sunday, a reputation as a star pupil of the International Monetary Fund, yet its people remain among the poorest in the world. Annual per capita income hovers between $200 and $250. More than half the country's 32 million inhabitants and more than 80 percent of the working population depend on an agricultural sector that has yet to recover from the failed experiment of collectivism and "African Socialism" put forward by late founding president Julius Nyerere in the 1960s, 70s and early 80s.

Food security is a key issue and at the best of times Tanzania, where much of the population are subsistence farmers, and where drought has struck for three years running, is just about able to feed itself. Six out of every 10 Tanzanians are born at home because they cannot afford to go to hospital. One in five children attends secondary school.

Heavily dependent on international aid, Tanzania is "considered a good African pupil of the International Monetary Fund (IMF), more than ever since 1995, when (Benjamin) Mkapa came to power", according to one western diplomat. Mkapa is almost certain to win Sunday's presidential poll. "Donor countries, the IMF and the World Bank have taken into consideration the immense efforts over the last ten years to open up the economy to free market forces but the people have not seen the advantages," remarked a Tanzanian economist.

"The results we had hoped for are not there yet, despite a good growth rate of 3.5 to four percent for 2000, but the foundations and structures are promising," he added, noting that inflation, at around six percent has, under Mkapa's regime, fallen dramatically from the 30 percent of 1995.

In July, the World Bank agreed to lend Tanzania $212 million to support economic reforms, making Tanzania the first country in Africa to benefit from the advantageous terms of a Planned Structural Adjustment Credit. In April, the IMF and World Bank had already eased Tanzania's $2 billion debt burden and the IMF agreed to lend the country $181.5 million. The same month, the Paris Club, a group of western creditor states, agreed to write off $390 million of debt. These were the fruits of a gradual programme, begun in the early 1990s and accelerated from 1995, of liberalising prices, exchange rates and the banking and finance sectors and, above all, of privatising hundreds of state and parastatal bodies set up under Nyerere's socialist regime.

Mkapa has recently promised to speed up the privatisation process. Another major problem is corruption, which affects every level of society, including the higher echelons of government. "Mkapa, seen here and abroad as very honest and a man of integrity, does not really have the capacity to fight corruption, which takes place with total impunity among senior government and party officials," according to one diplomat.

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