2.1 The early years 1961 - 1967
2.2 Socialism and education for self-reliance
2.3 The problems of a burgeoning bureaucracy
2.4 Structural reforms and the return to a free-market economy
Tanganyika, once a German colony and later a British Protectorate, gained Independence in December 1961 and in the following year it became a Republic. German colonial rule was short lived and had little impact on the economic infrastructure of the country. Following the First World War the country became a British Protectorate, but the country's economic development was stifled as preference was given to the more established British interests in Uganda and Kenya. Later, after a union with Zanzibar (following a coup d'état) in 1964, it changed its name to the United Republic of Tanzania.
In 1965 following a Presidential Commission, the country adopted a single party system and in 1967 initiated a process of socialism inaugurated by President Nyerere in what is commonly referred to as the Arusha Declaration. Socialism, Nyerere considered was essential to achieving human equality and in denouncing exploitation, he advocated public control of the means of production. Self-reliance became the clarion call and a concept that was to permeate every facet of government policy for the next two decades. To demonstrate the government's commitment and to serve as an example to the people, Party and government leaders were prevented from owning shares in private companies, receiving rents on properties or claiming more than one salary at the same time.
By the late 1980's the country was 'neither socialist nor self-reliant' (Maliyamkono & Bagachwa 1990) having agreed to a programme of structural reforms with the IMF. Constitutional changes in 1993 allowed the reintroduction of a multi-party democratic system and the first elections were held in October 1995.
In the years following independence the country continued to promote the capitalist economic system it inherited. The government's non-interventionist economic policy coupled with a belief that the role of the public sector was to support the growth of the private sector, (except where private investment to provide support or services could not be found) had resulted in increased foreign investment and provided the impetus for a significant increase in the economic performance of the country.
In both the rural and urban areas, self-employment and small-scale enterprises were common, supplying both services (blacksmithing arts and crafts) and basic commodities such as food, tools and utensils. The population was relatively small, the land was productive and generally supported the needs of the people (except in times of drought). There was little need to develop informal sector businesses as unemployment was low and basic human needs were satisfied. In both areas people gained formal employment, i.e. on plantations or in factories. The important factor to consider was that patterns of consumption reflected traditional culture, bartering was in some ways more appropriate and accepted than monetary transaction.
Prior to Independence the country operated a three-tier school system (4-4-2-2), four years Primary school was followed by a further four years of Middle school, those successful at this level were then selected for secondary education. A further two years of study led to 'O' level (Std X) examinations and for a smaller number, the opportunity to progress to 'A' level studies and on to higher education. The objective of colonial education policy was to ensure that there was sufficient numbers of suitably educated Tanganyikans to assist in the administration of the country. The Five Year Development Plan (1956-1961) prior to independence envisaged the expansion of middle and secondary schools at the expense of the primary school. Middle school places were to be increased by 50%, secondary enrolment increased and a Higher School Certificate introduced. In the event this did not happen due to a shortage of funds.
At independence literacy rates were significantly below those of other low income countries, with adult literacy estimated at 10% -15% and primary school enrolment only 25%, compared with an average of 37% in comparable low income countries (Maliyamkono & Bagachwa 1990). In 1961 only 10,316 children sat for the Territorial Leaving Examination (Std VIII), a pre-requisite for admission to secondary schools, of which 4,230 (41%) progressed to secondary Form I. By 1965 this figure had risen to 46,666 entrants, which represented a fourfold increase, but only 6,903 (14.8%) gained a secondary school place. It is important to note the tremendous decline in the proportion of Middle School Leavers who achieved a Form I place. In the period of four years this had dropped from 41% to 14.8%, in real terms a reduction of 26.2% in the opportunity for enrolment. This may be considered to be the beginning of the problems encountered by the youth in gaining formal employment and the emergence of informal sector activities by this group.
In rural areas, the Church and other mission organisations had established a long tradition of vocational training to support local needs as one of a range of activities to relieve poverty and some of these young people were absorbed by the Church organisations who provided employment.
Raising literacy levels especially among the adult population was considered to be essential in the drive to achieve Tanzaniasation and was one of the principal objectives of the first Five-Year-Development Plan (FYDP), The most important aspect of Tanzaniasation was to raise the literacy levels of the rural peasant in an effort to improve agricultural production. In addition the quality of secondary, further and higher education was to be enhanced to speedup the process of replacing expatriate workers with Tanzanians, for prior to independence large companies and the public sector had favoured employing expatriates as managers, technicians and administrators, while Tanzanians performed the more menial tasks. To accomplish this, a cadre of educated Tanzanians was required in the immediate future, but the mass education of young people was considered to be a long term investment, 'first we must educate adults. Our children will not have an impact on our economic development for five, ten or even twenty years' (Nyerere 1965).
During this early period the debate about the future structure of education began. The initial idea was to combine the existing primary and middle school years to create an eight-year primary programme. However, in 1964 this was superseded by the current 7-4-2-3 system currently used.
2.2.1 The second five-year development plan (1970 - 74)
2.2.2 The third five-year development plan (1975 - 80)
The Arusha Declaration (1967) signalled the end of the capitalist, free-market economy and the beginning of a programme of nationalisation and centralised decision making. Nyerere's original emphasis had been to develop the rural areas at the expense of the industrial developments sited in the towns. The government intended that school leavers would be gainfully employed in the rural areas in farming and related activities, but this view represented the very antithesis of the aspirations of increasing numbers of young people.
The government considered that capital intensive enterprises supported by foreign investment represented a covert colonialism that exploited the rural masses and rewarded the urban few. The need to develop a modem industrial sector was dismissed by Nyerere on the grounds that, 'we do not have the necessary finances and technical know-how' (Nyerere 1967), yet within five years, due to a combination of factors not the least being a growing acknowledgement of the important role industry played in economic development, the policy had been reversed and plans drawn for the development of a long term industrial strategy.
'Education for Self-Reliance' (ESR) emphasised that primary schooling was a cycle of learning, rather than a selection mechanism for advancement to secondary education. Primary education, 'must be a preparation for the life which the majority of children will lead'. Similarly the function of secondary schools was to 'prepare people for life and service in the villages and rural areas of this country'. Nyerere considered the school curriculum needed changing to make the content of individual subjects more relevant to Tanzanian children. This would involve productive work on farms and in workshops, an amalgam of theory and practice. Parents, agricultural workers and artisans were encouraged to become involved in the learning process. This by implication would serve to reinforce the work ethic and maintain the status quo rather than encourage pupils to aspire to well paid employment in the formal sector.
These beliefs formed the basis of educational policies for nearly two decades and emphasised rural development at a time when ever increasing numbers of young people were migrating to the towns in search of jobs in the relatively well paid formal sector. The driving force for political action was a growing crisis in the education system caused by the success of the government's policies in increasing primary enrolment and the subsequent raising of peoples' (parents and children's) aspirations. Primary school entry had risen significantly since independence, but there had been little increase in secondary capacity, demand was greatly in excess of supply. The result was that from a position in 1961 where 41% of primary school leavers gained a place in secondary school by 1967 only 13% were successful. It is worth noting that between 1965 and 1970 the number of secondary school places had increased by 80% from around 23,000 to just over 41,000, although this rate of expansion was not maintained as in 1975 the total number of places was about 56,600.
The problem was not that academic standards had declined, although due to the rapid increase in the numbers of primary schools the quality of teachers, books and equipment had declined or were proportionately scarcer, but that there were simply not enough places in secondary schools. To many young people and their parents, failure to gain entry to secondary education meant that they were consigned to a life of manual labour in or around the village.
The policy of ESR could therefore be perceived as a political yet pragmatic response to defuse the emerging conflict between the ideology of the state anxious to stem urban migration and the expectations and aspirations of Tanzanian families who perceived that educational progression was the vehicle through which their children gained passage from rural, low paid agricultural employment to urban, relatively well paid employment in a parastatal organisation.
ESR was therefore an educational system designed to inculcate people into the culture of Tanzanian socialism, its principal tenets were, 'primarily in terms of mental and social attitudes rather than of knowledge and skills' (Dore 1976).
Educational reform faced opposition from administrators, teachers, parents and pupils alike (Schadler 1968). Officials in the Ministry of Education strongly opposed the teaching of agriculture in curriculum time, arguing that, 'self-reliant activities in practical subjects would stifle the development of innovative and creative imagination, something that Tanzania's long-term development would heavily depend on' (Morrison 1976), but to no avail. Such capitalist qualities as innovation entrepreneurship, initiative and self-motivation were ignored and deplored, as they were contrary to the socialist ideology of the government. Some parents and teachers considered it to be a return to colonial values by the suppression of aspiration, while to others 'little more than a return to farming' (Morrison 1976). The outcome was hostility and defiance, many teachers were not prepared to learn either the theoretical or practical skills necessary to teach effective farm practice which consequently had a twofold effect on their pupils. Firstly, by displaying negative attitudes towards practical activities they were reinforcing the anti-rural culture, the very antithesis of government policy and secondly, through their own attitudes and lack of farm skills they were a very poor role model for instilling 'good-practice', i.e. effective and efficient methods in their pupils. Nyerere envisaged ESR to be more than merely the addition of agricultural production to the school curriculum, but due to a lack of guidance and formal training, administrators, teachers and parents interpreted it solely as this.
The second FYDP heralded the implementation of two strategies, the Basic Industrial Strategy (BIS), a long term plan (1975 - 95) designed to develop a domestic, resource based industry to cater for the country's needs and more immediately, the creation of a Small Industries Development Organisation (SIDO) to stimulate small-industries. The aim was to reduce export dependency from a high level in 1974 of 48.5% to 14.8% by 1990 (URT 1974). The industries were to provide the 'basic needs' goods for Tanzania, identified as clothing, shelter, food, health services, water supply and education. Both policies aimed to foster the development of capital goods industries with the flexibility to adapt to local industries, provide training and where necessary the development of new skills.
To support the development of a cadre of suitably trained labour, legislation in the form of the Vocational Training Acts was passed in 1972 and 1974, paving the way for the formal training and certification of artisans. In the following year (1975) diversified secondary education was introduced with financial assistance from the World Bank (IBRD) that enabled secondary school pupils to study technical, commercial and agricultural subjects. The aim was to provide training that enabled them to enter the labour market equipped with the necessary knowledge and skills to alleviate what the manpower planners had identified as skills shortages. In the event diversified secondary education was deemed to be ineffective by the World Bank and funding was subsequently withdrawn.
Central to both the BIS and SIDO were the tenets of national Self-Reliance and rural development. In particular the role of the SIDO was to 'assist and promote the establishment of units which employed simple, labour intensive technologies which utilise locally available human and material resource' (Skarstein & Wangwe 1986). SIDO represented a concerted effort by the government to promote informal sector type enterprise in the rural areas. SIDO's brief was to promote and develop small-scale industries employing between 10 and 70 employees. The government considered that such enterprises could fulfil four policy objectives. The first concerned the limited availability of capital. Small-scale industry required less capital and therefore appeared to represent feasible propositions. The second and third were both associated with rural development and the villagisation programme. Finally, the siting of industries in rural areas would enhance the local economy, provide employment throughout the year and develop technical skills within the villages. Small-scale industries, it was envisaged, would make a significant contribution to national development as they would account for 60% of projected new industries, yet require only 15% of the proposed investment. In return they would generate 10% of the country's output and employ 18% of the population.
Education policies during the period of the second FYDP sought to reinforce rural development and stem the increasing tide of urban migration. Consideration was given to redefining the function of primary schools as 'community education centres' (URT 1969), with institutions undertaking a dual role as provider of primary education for children and concurrent education for out-of-school-youths and adults. This was seen as a mechanism for integrating formal and non-formal education at the village level. 'A school so conceived will increasingly become a focal point for the total education needs of the community, rather than serving as a somewhat detached institution for the education of children' (URT 1969). However, this policy was never fully implemented as the pilot schemes proved to be inoperable (Kwamsisi Community School Project- Korogwe). This was part of a broader programme of villagisation devised to improve the rural social and economic life and implemented in 1973 and later reinforced by legislation in 1975. Based on incorrect assumptions (Kwamsisi was already an Ujamaa village) and coercive strategies, community school reform although supported by UNICEF, UNESCO and URT was short lived.
Increasing literacy rates and a poor rural economic structure provided little opportunity for progression to either secondary school or what the youth considered to be meaningful employment so urban migration was aggravated. Migration was not a recent phenomenon but with increasing literacy rates, ever greater numbers of educated young people were seeking employment in the towns. Mascarenhas (1976) suggests that in 1961, 33% of migrants had no formal education, by 1970 this figure had dropped to only 7% as a result of the expansion of primary education and by 1976, 'the migrants had two-and-a half times the average schooling of those who remained in the rural areas', data that was supported by studies carried out by Roy (1966) and Collier (1986) on the educational attainment of the rural population. This suggested that the problem was not that the migrants were unsuitable for wage employment, rather there was a scarcity of vacancies, as the economy continued to decline and opportunities for employment receded.
With little chance of gaining wage employment in the formal sector, migrants were faced with the prospect of either devising a means of income generation, or returning to the village. Self-employment was perceived to be the key for many. Construction, the service industries, (e.g. fast food or maintenance), manufacturing and the supply of basic needs, (e.g. footwear), and ironmongery were all seized upon and developed. However, due to the structural difficulties inherent in the public sector these entrepreneurs could not be formally registered with the state. To compound these difficulties the government was ideologically opposed to such activities considering them to be clandestine, exploitive and subversive, so challenging the socialist notion of an egalitarian and classless society. As they operated outside the legal system depriving the government of tax revenue they must therefore be corrupt. In an attempt to eradicate informal sector operators the government abolished the issuance of urban trading licences to self-employed traders in 1973, but with little success.
The third FYDP sought to reinforce the socialist message, the aim of BIS was 'to restructure the industrial sector by increasing domestic linkages in order to achieve a greater degree of economic self-sufficiency'. As a consequence, in the late 1970's and early 1980's manufacturing industry was granted about one-and-a-half times the development budget of agriculture, even though at that time agriculture was the dominant sector in the economy supporting 90% of the rural population, accounting for nearly half of the GDP, and generating over 75% of foreign exchange. This discrimination was in part attributable to capital projects established under the BIS which were favoured by international donors and other lending agencies.
This policy failed to achieve its objectives as between 1977 and the mid 1980's agricultural output stagnated while industrial output recorded continuous negative growth. In part this was due to technology transfer, for although many capital/technically intensive projects were introduced, many failed to develop. Two reasons for failure were, a lack of foreign exchange to facilitate effective planned preventative maintenance programmes and inertia within the public sector in part attributable to a lack of communication within and between civil service and parastatal agencies.
Both SIDO and the BIS were considered to have largely failed to achieve their objectives. SIDO concentrated its investment programmes in the urban areas, as only 27% of the 120 million T/sh were given in development loans to rural industrial projects between 1973 and 1981. The failure was in part due to structural difficulties in the public sector that resulted in a lack of co-ordination, in identifying client groups and in providing effective support to those receiving assistance. A study by Kahama et al (1986) found that '60% of the total projected new plans and 15% of the proposed investment did not appear to be based on concrete data'. Compounding the problem, the operating costs of some of these businesses were found to be significantly higher than for mass production, while the goods produced tended to be of inferior quality.
In addition, according to Skarstein & Wangwe (1986), SIDO and the BIS represented two conflicting ideological strategies, the former biased towards production by the masses, the latter to mass production. Politically, SIDO represented an ideological solution, but was not popular with either senior administrators seeking quick-fix, fast track development, or international donors who preferred to fund large turn-key projects. This type of capital intensive investment rather than eliminating the need for expatriate labour, reinforced dependency (James 1983, Perkins 1983). By its very nature, the concept of import substitution aligns itself towards capital intensive technologies, in an attempt to satisfy consumer demands, i.e. if the consumer is used to brand X, then to maintain the consumer satisfaction, the in-country supplier must employ the same technologies and raw materials. However, by their very nature such plants represent a significant commitment on foreign exchange deposits (if the capital costs are not subsidised by a donor) both in the short and long term, as to maintain the plant and equipment, requires further foreign currency demands to purchase spare parts. The final important factor to consider is that such industries are technology intensive rather than labour intensive and therefore tend to exacerbate rather than alleviate unemployment.
Traditionally a significant amount of foreign exchange had been derived from the export of agricultural surplus, but the lack of emphasis by central government on agriculture resulted in falling reserves of foreign exchange. The consequence was that industrial production decreased as spare parts became increasingly difficult to obtain due to a lack of foreign exchange. However, in recording that agricultural production was adversely affected by the Ujamaa Villages Act of 1975 that replaced private ownership and enterprise with a state monopoly, in practice the farmers operated a second economy selling 'a large proportion of their output to unofficial marketing channels' (Maliyamkono 1985).
During this period urban migration continued despite attempts by central government to stem the tide. In 1976 there were attempts to resettle DSM's self-employed and unemployed in farming villages, again with little success. This situation was further aggravated by population growth, as the Tanzanian 1978 population census considered the working population (15-64 year olds) to be about 48.5% of the 17.5 million population and was estimated to be growing at a rate of 3.5% per annum, an annual increase in the potential labour force of about 380,000.
In terms of public sector growth at least two models are possible, the so called 'Japanese model' and the 'Indian model'. The former is capitalist orientated, the latter socialist. In operational terms, the 'Japanese Model' perceives the role of the state as supporting the growth of the private sector, intervention is seen as a last resort, when capital has not, or can not fulfil a role. This was the model employed from independence until the Arusha Declaration.
In contrast, socialism in Tanzania was based on the 'Indian model' of economic development as it was increasingly based on public control through interventionist policies. The outcome was that the state assumed an ever increasing influence on economic policy, a concept commonly referred to as 'wider Keynesianism' (Biersteker 1990 and Schott 1992). However, one of the principal difficulties with this approach, especially one perceived to have been 'ideologically loaded' (Moshi 1994) is that the state over-estimates its capability to manage and as a consequence, 'over-stretches itself by thinly spreading its resources over an increasing number of activities, projects and programmes' (Moshi 1994). This was the case in Tanzania. The number of public sector enterprises (parastatals) and employees grew rapidly from 42 parastatals in 1967 to 425 in 1984, a tenfold increase (Malima 1992). A phenomenal increase, the magnitude of which only becomes apparent when Tanzania is compared to other developing countries. A World Bank report published in 1988 attempted to portray the burgeoning public sector in a global perspective commenting 'only in countries as large as Brazil and Mexico - six times the population and 50 times the GDP and 3.6 times the population and 35 times the GDP respectively of Tanzania does one find more than 425 parastatals'.
This expansion required a cadre of literate administrators and other skilled workers, fed mainly by graduates and upper secondary school leavers. The Government, according to the ILO, paid little attention to productive workers, rather, 'the preoccupation was not with the earning or producing services, but with the 'spending services' (ILO 1981). Increased state control did not translate into increased productivity, but rather the burgeoning red-tape impeded the efficient and effective operation of parastatal activities and productive output per se declined.
The parastatal system seriously inhibited the assimilation of technology transfer and through failing to provide adequate incentives effectively discouraged innovation and entrepreneurial activity. By creating an inertia to change and adaptation, administrators and managers failed to take advantage of opportunities to develop, preferring instead a conservative maintenance of the status quo.
One serious consequence was in forecasting demand for manpower. The training of artisans in vocational training centres and diversified secondary schools based on supply-side forecasts of skill shortages in industry, were according to the ILO and World Bank, over ambitious and 'only too often the supposed acute shortages become surpluses, and expensively trained technicians find themselves redundant' (Morrison 1976). A further criticism focused on the employability of the products of training centres and technical schools. There is evidence to suggest that in general the products of these institutions were poorly equipped to enter the labour market, in some instances due to a lack of suitable skills, while in others the cause was attributed to personal attitudes, elitism and expectation (Thomas 1965, Schadler 1968, Leonor 1976).
A recurrent problem was a belief that economic difficulties resulted from a shortage of skills, i.e. that the problem was quantitative, hence a reliance by government on manpower planning. This does not infer that there was a shortage of skilled/qualified manpower, rather that qualifications and skills were in many instances inappropriate for the demands of the marketplace. In reality the problem appears to be qualitative, a failure to provide new recruits and established employees with the requisite knowledge and skills to effectively and efficiently fulfil the duties associated with a particular post. One example of this was the policy of a guaranteed place for secondary school leavers and graduates in the civil service and parastatals. This resulted in a situation whereby title or tenure implied capability, which in practice led to ever increasing levels of inefficiency. Such inefficiency has led to a contracting civil service, the collapse, or privatisation of ever increasing numbers of parastatal organisations and consequently contributed to retrenchment. One implication is that these organisations no longer guarantee employment to school/university leavers. This scenario supports the notion that to be effective or competitive, organisations are beginning to acknowledge that the calibre of their employees is all important and that they must have qualifications and experience relevant to the demands of the post.
As a consequence of economic stagnation and negative growth in agriculture and industry, opportunities for employment in the formal sector have diminished. School leavers, graduates, artisans and other workers trained specifically for employment in the civil service, parastatal and other similar organisations are denied this opportunity and are forced to consider the informal sector. However, many were ill-equipped to operate in this environment as their expectations of conditions of service were in stark contrast to those experienced in the informal sector.
2.4.1 Political abjuration
2.4.2 Early measures to arrest economic decline
2.4.3 International assistance to alleviate economic decline
During the early 1980's government successes in raising literacy levels among adults and children, in reducing infant mortality rates and improvements in health care that had increased life expectancy, were not matched by economic improvements. This situation resulted in ideological conflict between the government and the people.
Educational success led to an increase in expectations that could not be fulfilled, while economic difficulties attributable to inappropriate macro-economic policies, resulted in decreasing levels of food production and distribution and basic manufactured goods. Economic growth in real terms had been achieved between 1967 and 1975 (3.9% of GDP and 1.2% in per capita terms), but these gains could not be sustained and the economy was characterised by declining growth rates, high interest rates and rising public sector debt. This led to the introduction in the early 1980's to the first of a series of structural reform programmes. Underlying all of these factors was a demographic time bomb, increasing levels of unemployment especially among the youth.
Successive policies had guaranteed that unemployment among graduates was almost nonexistent through restricting the expansion of higher education. However, this policy had only served to create significant unemployment problems for secondary and primary school leavers, although the government was reluctant to acknowledge this. A survey carried out by the ILO in 1976 indicated that between 25% and 33% of Form IV leavers had been unable to obtain employment or pre-service training. A similar survey undertaken five years later by the ILO found the situation to have deteriorated (ILO 1981). In terms of formal sector employment, government statistics indicated that between 1983 and 1986 a total of 43,342 new jobs were created 27,083 (1983-4), 15,130 (1984-5) and 1,129 (1985-6), yet during the same period there were about 47,000 Form IV and Form VI leavers seeking employment (URT 1987). Added to this figure are primary school leavers and tertiary institution graduates. At the same time an ILO/JASPA study estimated that unemployment rates in DSM and Tanga in 1984 to be 17.6% and 29.9% respectively and was expected to increase as a consequence of implementing structural reform programmes. The government were unwilling to acknowledge that unemployment per se was a problem and maintained these people were voluntarily unemployed as they could be gainfully employed working the land. 'What was needed was to orient idle school leavers back to Ujamaa villages and to the land' in the spirit of ESR (Leonor 1985).
In the late 1970's and early 1980's the austerity caused by shortages of basic commodities had resulted in the rapid growth of informal sector activities and the emergence of corruption in public sector operations, smuggling and a black-market. In an attempt to rectify the situation the government introduced the National Economic Survival Plan (NESP) in 1981 that according to Maliyamkono (1985) was a set of incoherent targets which failed to be realised and as a consequence were replaced within a year by the Structural Adjustment Programme (SAP), a three-year 1983-85 programme intended to restore output to the 1978 pre-crisis level and improve the general economic circumstances of the country. One aspect worthy of note was that greater investment was given to agriculture, thus reaffirming its economic importance.
Coinciding with the introduction of the SAP in 1983 the government began a purge against what it considered economic saboteurs having convinced itself that the current climate of shortages was not due to ill-conceived macro-economic policies, but was sabotage and that 'it (the government) was facing a deliberate attempt to subvert public institutions to frustrate government (Maliyamkono 1985). In reality some people were merely reacting to a situation in which their living standards were deteriorating and their expectations and aspirations remained unfulfilled. To the vast majority of people, participation in activities considered illegal by the state, represented the only feasible method of alleviating of poverty and hunger.
This was followed by legislation, the Human Resources Development Act (HRDA) 1984 and as a consequence 470,000 people, including the youth who were engaged in informal sector activities, were repatriated to the villages. Many of these returned to the towns as there were no meaningful activities for them to undertake in the rural areas (Oman & Shaidi 1991).
The climate of change has, if belatedly, culminated in a recognition by the government of the importance and potential of the informal sector. In May 1987 the President acknowledged that, 'since the government could not afford to pay people adequate salaries, they should be free to do various income generating activities to support themselves'. Since then persecution of informal sector operators has diminished. Old habits die hard and in DSM, a conflict of interests between central and local governments has resulted in a periodic resurgence of hostilities towards street vendors. In 1988 and 1989 President Mwinyi formerly denounced the harassment of street vendors 'whether licensed or not and vowed that 'stern action' would be taken against any police or militia found harassing vendors. Condemning such activities, the President remarked 'the traders were actually engaged in legal activities trying to struggle against harsh economic conditions facing everybody... all urban councils should help the people engaged in petty businesses because that was one way of easing their economic burden' (Daily News 3/5/89). In 1995, harassment still continues but in a more covert way, e.g. vendors are moved to allow for civic improvements.
The Economic Recovery Programme (ERP), devised in conjunction with the IMF in 1986 and the Economic and Social Action Programme (ESAP) introduced in 1988, were both extensions to the SAP and paved the way for market reforms on the premise that such activity would promote growth and that denationalisation and private sector enterprise would, 'increase the incentive for efficiency and thus enhance the performance of the economy as a whole' (Lafay & Lecaillon 1993). The resulting de-regulation and subsequent liberalisation of economic activity has permeated and influenced all strata of Tanzanian life and manifests itself most forcibly to the man in the street through changes in social and employment expectations and as one might expect, has not been welcomed by everyone.
Structural adjustment has become synonymous with privatisation and retrenchment (redundancy), as industry attempts to realign itself to face the challenge of market-forces. Parastatal industries are being offered for sale or closed. Over-manning and ineffectual management has been replaced and as a consequence many employees have become retrenchees. To assist in the transition, the international donor community is active in providing technical assistance.
Musoke (1991), studying the effects of structural adjustment policies, found that the working class and especially the minimum wage earners were found to be the most economically affected, although wages in real terms have declined for all employees since the 1970's. The corollary is that ever increasing numbers of individuals and families have been forced to participate in informal sector income generating activities (mradi) to supplement their formal sector wage, or to abandon the formal sector altogether out of choice or due to retrenchment, in favour of informal sector self-reliance.
In recent years a number of studies and policy documents designed to encourage the development of the sector have been published. There is now almost universal acceptance of the potential of the informal sector to provide employment and mechanisms are in place to assist entrepreneurs to start-up and for established businesses to expand. In terms of education and training the government has discarded its reliance on manpower planning and begun the transition from a supply led to a demand orientated training system in its Vocational Training Centres (VTC's).
However, although mechanisms are in place to assist people enter and develop in this sector, (funded and operated by both governmental and NGO agencies), the current provision is inadequate, as it helps only a very small number of people compared to the vast numbers requiring assistance.
