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The structural adjustment programmes

There have been four distinct stages in Tanzania's attempts to improve the structure and performance of its economy: the National Economic Survival Programme (established in 1981), the Structural Adjustment Programme (1982), the Economic Recovery Programme (ERPI, 1986) and the Economic and Social Action Programme (ERPII, 1989).

The first major attempt by the Government to deal with unprecedented economic difficulties facing the country was the formulation of the National Economic Survival Programme (NESP) in 1981. The objectives of NESP included mounting an aggressive export drive in order to increase substantially foreign exchange earnings; saving on imports; eliminating food shortages; controlling of public spending in both government and para-statals; formulating development plans emphasizing consolidation of existing activities, in contrast to extension into new activities; and raising the productivity of the workers and farmers through appropriate incentive schemes. As a follow-up to these efforts, the government, with the help of an Independent Advisory Group, prepared a three-year Structural Adjustment Programme (1982/3-1984/5).

Table 5.9 Tanzania: debt servicing 1981-1990

Year Official debt (millions of current US dollars) Debt to IMF (millions current US dollars) Debt to World Bank (IBRD/IDA) (millions current US dollars) Total debt as a % of GDP Service of debt, annual total (millions current US dollars) Service of official debt (millions current US dollars) Service of private debt (millions current US dollars) Total debt service as a % of GDP Total debt service as a % of total exports Service of official debt, as a % of government expenditures
1981 1,850 99 529 53 n.a. n.a. n.a. 2.0 11.7  
1982 1,945 81 626 61 n.a. n.a. n.a. 1.6 15.7 n.a.
1983 2,208 51 699 68 77 47 28 1.5 15.8 n.a.
1984 2,201 24 749 68 68 54 14 1.3 14.2 n.a.
1985 2,509 21 818 75 65 55 10 1.2 15.0 2.9
1986 3,314 45 894 72 69 69 0 1.3 15.2 4.5
1987 n.a. n.a. n.a. 161 275 238 37 8.6 61.5 21.0
1988 n.a. n.a. n.a. 185 332 258 74 11.4 65.6 22.9
1989 n.a. n.a. n.a. 206 335 275 61 12.9 62.4 27.9
1990 n.a. n.a. n.a. 267 271 220 51 11.8 49.5 n.a.

Columns 1-3, 5-7: Strack and Schönherr, 1989
Column 10: for Government expenditures see Table 5.25, column 2; conversion to US dollars official rates of exchange (Table 5.1)

Table 5.10 Tanzania: net transfers from abroad 1981-1990 millions of current US dollars)

Year Total net transfers Net transfers to official suppliers Net transfers to private suppliers Total flow of funds into country Interest payments, as % of exports
1981 n.a. n.a. n.a. 293 n.a.
1982 n.a. n.a. n.a. 316 n.a.
1983 294 273 22 329 35
1984 162 127 35 190 29
1985 115 111 5 137 22
1986 116 116 1 143 26
1987 -114 -78 -36 n.a. 100
1988 -229 -155 -74 n.a. 130
1989 -264 -204 -61 n.a. 121
1990 -225 -174 -51 n.a. 111

1981-1990: Strack and Schönherr, 1989

The main elements of the Structural Adjustment Programme could be said to comprise the provision of incentives and support for exporters of both traditional and non-traditional products; an articulation of specific priorities for cutbacks in the composition of future government recurrent and development expenditures; a reduction in the rate of monetary expansion through measures to restore overall economic balance, as well as strict financial controls of public sector expenditures; an improvement of efficiency in the para-statal sector, in some cases through the device of privatization; the rationalization of agricultural producer and ultimate consumer pricing policies; an increase in efficiency of transport, marketing and distribution services; and the effective use of external assistance, taking into consideration the nation's objectives as well as its investment priorities. In order to implement this programme, the government began to take measures at macro and sectoral levels, aimed primarily at consolidating and rehabilitating the national economy. The later programmes (ERPI and ERPII) have tended to repeat the elements in the original Structural Adjustment Programme.

Comprehensive as the measures in all the programmes may seem, from the point of view of the advancement of science and technology there are no instructions. That R&D should be conducted with more efficiency, both in governmental and para-statal enterprises, is implied, but no specific guidance is to be found. For that, one must turn to proposals for the furthering of R&D in the individual sectors of the Tanzanian economy.

The most impressive of the sectoral R&D programmes is that for agriculture (see Tanzania, Ministry of Agriculture, Livestock and Cooperatives, 1991, subsequently referred to as the Masterplan). Formulated by a 'Task Force' recruited from Tanzania's Ministry of Agriculture, the Planning Commission, the Treasury and the Civil Service, Sokoine Agricultural University and abroad (with a ratio of approximately two Tanzanians to each foreigner) the Masterplan is addressed to the difficulties facing agricultural R&D in Tanzania and to their elimination. It admits that the research system is run-down, and that substantial efforts will be needed to rehabilitate it, and recognizes that the Tanzanian government alone cannot accomplish the task. Foreign donors must be sought; their funding to be geared exclusively to the implementation of the Masterplan (ibid.: xii).

The Masterplan sets priorities for research. 'Due to the importance of agricultural export earnings for financing national development, research in export commodities was given special attention' (ibid.: xi, xii). With the emphasis placed on traditional exports, three of the commodities appearing in the set given highest priority are not surprising: they are coffee, cotton and tea. Completing the set of commodities given highest priority are rice and meat. Assigned to the second set are some of Tanzania's main food crops - maize, roots and tubers (cassava, sweet and round potatoes), beans, legumes, vegetables and oil seeds. The remaining main food crops sorghum, bananas and wheat- appear in the third priority set.

In its discussion of financing, the Masterplan reveals the function of the priority sets: they are to determine the future allocation of resources to agricultural research. Research on crops in the first category will be rationalized and expanded, those in the second will continue at the present level, and those in the third will be '... de-emphasized, and resources currently applied to them might be re-allocated' (ibid.: x).

The resources applied to research in agriculture and livestock in Tanzania by the Ministry of Agriculture, at the time of the formulation of the Masterplan, comprised 50 research institutes, staffed by 3,375 employees, of whom 350 were scientists, 550 technicians and 760 assistants. Within the research institutes there were 22 crop commodity programmes, five livestock programmes, and six special programmes. In the interval between 1981 and the present, the numbers of institutes, employees and programmes have increased, as the Ministry has absorbed the research establishments of para-statal firms disbanded or privatized (e.g. coffee and tea). Ultimately, all public research in agriculture will be concentrated within the Ministry (with one exception, to which we shall shortly come).

The financial resources necessary to implement the Masterplan were estimated to be an injection of US$10 million for rehabilitation plus annual expenditures of US$7 million per year over the first seven-year period. Of the annual expenditures, a little over half (US$3.66 million, or TSh651 million at 1981 prices) were to be allocated to maintenance, supplies, publications, training and other non-wage current costs; and a little less than half (US$3.34 million, or TSh651 million) to the payments of salaries and wages. It was the first two items (rehabilitation and non-wage current costs) that had been beyond the ability of the Tanzanian government to finance; prior to the formulation of the Masterplan the government was hard pressed to meet even the salary and wage bill for the existing number of workers.

No such masterplan exists for research in any other sectors of the Tanzanian economy, probably because so little research has been undertaken there (either public or private). To be sure, there are development programmes for the industrial, transport, health and other sectors, but the attention devoted to research in these programmes is negligible. Our own sample of research institutions will not reflect the proportions in which R&D is carried out in the different sectors, however, since we covered only three institutes, out of the many whose activities fall within the agricultural sector, whereas we covered two industrial institutes, out of that sector's four.

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