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The Tanzanian poverty puzzle: Arusha or Washington?

Tanzania's latest attempt to cut poverty has moved the country further away from its African socialist roots. Opinion is divided on whether it's a step in the right direction.

The initiative for the so-called Poverty Reduction Strategy Paper (PRSP) came from the International Monetary Fund and World Bank, who asked Tanzania and over 45 other highly-indebted countries to produce a strategy after nation-wide consultations. The strategies must be approved by the IMF for countries to qualify for aid and debt relief.

Tanzania's PRSP has been praised for its poverty-reducing plans which some experts say are both achievable and will improve life for the poor. But, as in many other countries, it also has its critics.

"The formulation of the PRSP has effectively rendered the home-grown 1998 National Poverty Eradication Strategy (NPES) redundant," says Dr Benedict Mongula, a lecturer at the Institute of Development Studies of the University of Dar es Salaam.

Critics like Dr Mongula point to an emerging conflict between the PRSP and the NPES – a home-grown plan to eradicate poverty by the year 2025 under a programme called Development Vision 2025. The plan includes developing industries, improving access to education and boosting agriculture – the backbone of the Tanzanian economy.

Theoretically the PRSP should work in parallel with NPES to achieve the Vision 2025, but some observers say that in practice most funding is aimed at achieving the PRSP targets.

Less ambitious than the NPES targets, these include reducing the number of people living below $1 a day from 48 per cent in 2000 to 42 per cent in 2003, abolishing primary school fees and increasing enrolment in primary schools from 57 per cent to 70 per cent by end of 2003.

Both NPES and the Vision 2025 claim to build on Tanzania's socialist values, which date back to 1967 when the late Julius Nyerere, the country's first president, set out his radical vision to pull its people out of poverty.

The so-called Arusha Declaration set out principles of collective agricultural production, equal opportunity and self-reliance. Under the Declaration, the government introduced free education, health care and water services.

The results flowing from Arusha – described by the well-known African historian and political analyst Ali A. Mazrui as "intended to be indigenously authentic African socialism" – transformed the country Nyerere inherited from the British. In 1961, when the British left, the country had only two engineers and 12 doctors – and 85 per cent adult illiteracy.

Under Arusha, literacy rates and school attendance soared, and people's incomes and quality of life improved.

But low commodity prices on the world market, high oil prices, an overvalued exchange rate, an expensive war with Uganda to help oust the dictator Idi Amin, combined with the failure of Nyerere's policy to forcibly resettle farmers to collective villages, led the government to change its policies in the early 1980s.

The economy was in a bad shape: the government could no longer afford free services, debt had rocketed and foreign donors were refusing aid.

In 1982, Tanzania became one of the few African countries to attempt its own local structural adjustment programme (SAP), including a move to liberalise the economy while maintaining income redistribution.

When this belt-tightening measure failed to deliver, Nyerere stepped down in 1985 saying the ruling party and government had alienated themselves from the people.

The new government managed to secure a fresh IMF and World Bank loan to the tune of 67.9 million SDR. But the money came tied to the condition that Tanzania liberalise its trade, privatise state enterprises and open its economy – policies that have been continued under the PRSP.

Theobald Mushi, an economic consultant and former editor of the Tanzanian Financial Times says: "Since abandoning the Arusha Declaration, Tanzania has never had its own home-grown economic polices. Even the Vision 2025 and the NPES were highly influenced by experts from the United Nations Development Programme." He adds that the formulation of the PRSP was dominated by donors and government technocrats.

Professor Joseph Semboja, executive director of the think-tank Research for Poverty Alleviation, which advises the government on poverty reduction, admits that the PRSP idea began outside Tanzania but adds: "it was quite carefully crafted to really become a local initiative – it has local content."

The draft PRSP was drawn up in January 2000 by a committee comprising officials from 12 ministries. That same month it was discussed in a meeting between the government, donors and civil society. According to the Vice President's Office, 804 people – mostly villagers, councillors and nongovernmental representatives – then reviewed the document in workshops, before a consultative meeting with donors was held in June. Later, MPs discussed it in a workshop.

But there were gaps in the consultation: the plan was not brought before Parliament for debate or approval, opposition parties were not included in the consultation process, and businesses, farmer and labour unions were only included at a late stage.

"Employers and workers were only called in at a national workshop in August 2000, a few weeks before the paper was sent to donors for approval," says Dominico Kabyemera, chairman of the Association of the Tanzanian Employers.

The gaps in the PRSP consultation are one aspect of the process. Another is to do with the content of the plan. Many experts believe agriculture – key to poverty reduction in Tanzania – has been accorded a low priority under the PRSP.

Ruben Masango, chairman of the Mtibwa Sugarcane Growers Association, says the PRSP is missing the target because it does not encourage modern technology and provide enough resources to increase farm productivity. "Since the PRSP avails so much funds for poverty reduction, a substantive portion should have been set aside as a core capital for the agricultural bank to kick-start agriculture into a vibrant industry," he says.

The PRSP is also silent on protection of the domestic market and extending subsidy to farmers – and it discourages the government from providing credit to the rural sector. In contrast, the NPES talks about investing in agriculture, developing agro-businesses, improving technology and increasing farm credit.

"In a country like Tanzania where more than 80 per cent depend on agriculture, issues like protection of home market, subsidy for farmers and strengthening of local industry could be very crucial," says Dennis Mchunguzi, executive director of Action for Relief and Development Assistance (AFREDA), a non-governmental organisation.

But Paschal Assey, coordinator of poverty reduction in the Vice President's Office which oversees poverty eradication initiatives, does not see a conflict. Rather, he believes the PRSP is the right approach because it addresses fundamental weaknesses in the NPES.

Unlike the NPES and the Vision 2025, Assey says, the PRSP offers good poverty analysis, prioritisation, monitoring and excellent linkage with the budget, adding it has "developed a poverty monitoring system with indicators for assessing the effectiveness of the strategy".

Prof. Semboja agrees, saying the PRSP has been drafted as a framework to stimulate quick economic growth. PRSP is likely to bring quick and tangible results to the poor, he says. "As long as the implementation of the PRSP is closely monitored and adequately financed, the strategy is likely to bear the desired fruit."

Opinion in the villages is similarly divided.

Juma Shaaban Magubila, a farmer from Chalinze, 109 kilometres west of the capital Dar es Salaam, says: "It is because of the PRSP that the government has abolished primary school fees. Whether the strategy was formulated by foreigners or not, the idea that we have free education for our children is overwhelming."

But Mwakatika Isaac, a farmer from Bagamoyo, some 70 km from Dar es Salaam, says he would rather development policies bring back socialism. "During the era of socialism we had subsidised farm inputs like fertilizers and pesticides as well as free seeds, health care and education from primary school to university," he says.

The fact remains that despite years of economic reforms, Tanzania is today one of the world's poorest countries with a per capita GNP of $270 in 2000, and it is highly dependent on external aid.

In 1998 the late Nyerere touched on the issue of whether a development process is nationally owned or externally imposed in an interview with the journalist Ikaweba Bunting published in New Internationalist magazine. Nyerere, at the time a highly respected African elder statesman, referred to a visit to Washington where he challenged World Bank officials on their performance.

"In 1988 Tanzania's per-capita income was $280. Now, in 1998, it is $140," said Nyerere.

"So I asked the World Bank people what went wrong. Because for the last 10 years Tanzania has been signing on the dotted line and doing everything the IMF and the World Bank wanted. Enrolment in school has plummeted to 63 per cent and conditions in health and other social services have deteriorated.

"I asked them again: 'What went wrong?' These people just sat there looking at me. Then they asked what could they do? I told them: 'Have some humility'. Humility – they are so arrogant!"

Alfred Mbogora is assistant editor with Sauti Ya Demokrasia, a monthly newspaper on democracy, which is published by the University of Dar es Salaam.

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Panos London

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08/21/2003

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