WRONG TURN AT ARUSHA
p. 2 of 2
The TANU Executive met for a week in Arusha early in February. Here Nyerere arrived at the end of his tour of rural areas, and
it was immediately apparent that important policy decisions would be
taken during the week. A
Presidential Commission was to have been set up to define Tanzanian
socialism, but Nyerere announced that the country could not wait for its
report. At the end of the
week, the Arusha Declaration was announced.
The Declaration stressed from the outset that there is no room
for class divisions in Tanzania, or for one person to live off the labor
of another. All Tanzanians
must be workers or peasants, and the State must control the major
means of production. The
industries and resources comprising that category were defined.
Money was the subject of a long discourse intended to show that
Tanzanians could not hope to solve their problems solely through its
use; Tanzania is too poor, and outside assistance inadequate. Tanzania’s major resource was its
people. The document regretted the amount of stress put on industry,
citing again the inadequate finances and technical knowledge. Increased production of agricultural crops would be the only road
to development. The
Declaration warned that there are many kinds of exploitation, and in
Tanzania there is the danger that exploitation of the peasants by the
town dwellers may occur.
The last part of the paper is devoted to outlining the leadership
qualifications for the party and the Government. It is not a list of desirable virtues, but a set of severe
restrictions on the uses of influence and private wealth. No party leader, Government minister or civil servant down
through the middle ranks should in any way be associated with the
practices of capitalism or feudalism; that is, none should hold
directorships in private companies, have two or more salaries, or own
houses rented to others. (16)
The Declaration was followed in a week by the nationalization of
all banks, eight milling companies, all life insurance companies, and
eight import-export firms. Full and fair compensation was promised. Seven other firms were notified that the Government wished to buy
a controlling interest in their businesses, and the sisal plantations
were slated for nationalization or partnership with the Government. The Government then gave assurances that no other industries or
businesses were to be affected, and appointed as Minister of Commerce
and Industry a man in whom the private sector had confidence.
There is some evidence that even Ministers with direct
for commercial and financial affairs were not advised of the
in advance. Certainly the civil service had not been prepared for the
Most attention outside and inside Tanzania focused on the
nationalization measures, but they were probably not foremost in the
mind of the President. His
emphasis was on Self-Reliance and the quality of the nation’s
leadership. He was
apparently not displeased by the furor surrounding nationalization and
later remarked to the press that “this little explosion about
nationalization . . . has prepared the mood for everything else.” (2)
But he was not pleased with the reactions to the strictures on party
leaders. The President
offered to clarify the Declaration for Members of Parliament and
received 21 questions from them. In
his responses, published by the Tanzanian Government Press, the
President remarked with displeasure on the fact that every question
concerned “qualifications for leadership” and none concerned “self
reliance.” The questions all implied criticism of the severity of the
restrictions. (17) One observer commented that the Declaration is
popular because it is directed against domination from abroad and for
self-reliance -- but the former is better understood than the latter.
The Arusha Declaration was followed in March by “Education for
Self-Reliance,” recommending a radical departure from the inherited
educational system. The
President wrote it without consultation with the Ministry of Education. The document suggests a reorientation of the
system to meet the
needs of the vast majority who will have only primary schooling and
spend their lives on the land. It
recommends that Swahili be the language of instruction and that every
school in rural Tanzania have a farm attached to it. The statement is widely admired by educators concerned with
African problems, and would repay further discussion, but unfortunately
it bears only peripherally on the topic of this paper. (19)
Nyerere’s third major policy declaration of the year was issued
in September. “Socialism
and Rural Development” begins with a romantic version of traditional
African family life, extolling the virtues of mutual respect, common
ownership of property, and a general obligation to work. This is the concept of Ujamaa, or familyhood, in which every
member of a family must have a minimum standard of food, shelter and
clothing before anyone received anything extra. Nyerere had spelled out the meaning of Ujamaa before, in the
introduction to a collection of his writings published in January 1966
(18) and possibly elsewhere, but in this document he extended the
implications of the parable considerably.
He said that the ideas of selfishness and individual advancement
came from colonialism, as did the growth of urban centers and wage
employment. In the
countryside, cash crops have led to larger farms and competition. “The moment . . . a man extends his farm to the point where it
is necessary for him to employ laborers in order to plant or harvest the
full acreage, then the traditional system of Ujamaa has been killed . .
. Thus we have the beginnings of a class system in the rural areas.”
The President believes a class system can be avoided by the
introduction of “economic and social communities where people live
together and work together for the good of all.” (21) He does not
expect this to happen in a short time, nor does he believe that the
basic productive unit will in all cases be the same. He suggests that, to begin, people should be persuaded to move
their houses into a single village, then to plant a communal plot, and
finally to grow all crops communally.
Since publication of this policy, the President has spent 40 days
popularizing it in the rural areas, including a 138-mile walk from
Butiama, his home village, to Mwanza, where the first meeting since
Arusha of the TANU Executive Committee was held. (6)
In this section an attempt will be made to identify some of the
personal influences on Nyerere as well as the objective factors bearing
on these policies. Personal influences are of unusual importance in
Tanzania because of the President’s eminent position. It has already been noted that “Education for Self-Reliance”
and the nationalization decisions were taken without consultation with
the Ministers or civil servants directly involved. It is also likely that the Ministry of Agriculture had little or
nothing to do with “Socialism and Rural Development.”
The education and rural development policies were promulgated
between meetings of the TANU Executive Committee, so that body could
have had nothing to do with their preparation. The policies came from Nyerere alone, and personal influences on
him are thus an important subject to consider when they can be
It was earlier noted that several dangerous economic trends have
become visible since independence. To recapitulate briefly, the wage bill of the economy went up
sharply while the number employed actually declined by one-sixth. Nyerere said in October that wages have nearly doubled since
independence. (27) Agricultural production showed a healthy increase,
but the major program designed to modernize rural methods had failed. Agricultural incomes were up only 5% since independence,
according to an official estimate, which cannot be expected to be erring
on the side of underestimation. (7) It is reasonable to assume that
most, if not all, the increased income went to the relatively small
areas where the large production increases of cotton and coffee arose. For the rest of the peasant economy, incomes probably have
declined in absolute terms since independence.
It is possible to see how this happened. The small
industrialization that did take place was of an
import-substitution nature. Import substitution often has the immediate effect of raising prices to cover
the less efficient domestic producers. Wage increases in the towns received by the employed few (9% of
the labor force) also tended to raise the prices of the simple goods the
peasants bought in the shops.
The growth of producers and marketing cooperatives since
independence was substantial (they doubled in number to 1600), but they
failed to offer better terms for the farms. Mismanagement was so widespread that in September 1967, the
Government suspended the registration of 450 of them. (5) In the
marketing field this was a particularly significant failure. Asians have dominated the marketing and distribution sectors in
Tanzania for many years; the failure of cooperatives to supplant them
was a political and economic problem.
There is an interesting possibility that Nyerere chose the
businesses the Government was to nationalize with a particular analysis
of the marketing situation in mind, and that this analysis was not quite
accurate. Ian Livingstone,
former economics professor at Makerere College in Uganda, analyzed the
marketing system in Tanganyika for an international seminar in September
1964. He described the
system as having three levels, each controlled by the one above. Primary buyers cover the countryside buying produce from
the peasants. They sell to
the merchants in the larger up-country towns, who in turn sell to export
firms on the coast. Livingstone
found very large credit advances were common from the coastal exporters
to the merchants and from the merchants to the traders. He concluded
that the exporters thus controlled the merchants, and the traders were
little more than agents for the merchants. As an example, he said that 95% of the
produce of Tahora was
exported through five or six large exporting houses. (12)
Whether Nyerere read the piece by Livingstone, or came to similar
conclusions by some other route, his choice of targets for
seems based on that analysis. Nationalization of the banks put the Government in a position to
break the credit control exercised by the large firms. The milling companies and export-import firms became eligible by
similar reasoning. The
latter case is particularly interesting because when the Government took
over the export firms thought to be the largest, it found itself in
control of only 10-15% of the trade. Livingstone’s article implied much greater centralization.
Distribution is similarly almost entirely in the hands of the
Asians. A study done by the
Economist Intelligence Unit in 1962 revealed that Asian shopkeepers were
exceptionally low-cost distributors, largely because the Asians do not
consider family labor an overhead expense. The Government nevertheless set up a State trading firm, COSATA,
to distribute goods, and found that it could not compete profitably with
the older system. COSATA
retrenched, but again it is politically difficult to abandon efforts to
wrest control of distribution from the Asians. (27)
Another scholarly work which may have influenced Nyerere was an
article titled “Trade and Aid in Tanzania” by a young Canadian
economist at the University College. The article was not published until April, but was the subject of
a lecture given on February 10, the week following Arusha. The article was based on the premise that in this decade the
rising prices of imports and the falling prices of exports have erased
the value of the gains in export volume achieved by developing nations. It went on to state that when allowance is made for increasing
prices in the produce of donor countries, the real value of aid has
fallen since 1963, and the author predicted that the underdeveloped
world would have to continue its battle for development on the terms of
the present system of international economic organization. (9) Again,
Nyerere may have independently reached the same conclusions, but the
rationale is here for his emphasis on self-reliance in the Arusha
Declaration, and it may be significant that he had the article
reproduced and distributed to all senior civil servants.
These factors all contributed to what appears to have become a
powerful conviction of Nyerere that privileged classes were emerging in
Tanzanian society. The
benefits of the modest gains so far made by Tanzania were not going to
those who had produced them, the peasants. They were being absorbed by the trade unionists, the civil
servants, the students, and some of the cooperatives.
Another powerful influence on Nyerere became apparent shortly
after Arusha. Rene Dumont, a 63-year old French agronomist with broad
experience in Indochina and West Africa, published a controversial book
called L’Afrique Noire est Mal
Partie in 1962. It was
published in English in 1966 under the title False
Start in Africa. Dumont
is much like Nyerere in many ways, although perhaps without the
President’s subtlety of mind. Dumont’s
book is an opinionated account of West African development problems, a
collection of sound lessons in agronomy interspersed with moralistic
strictures on wastefulness and folly. But the social ills he singles out for the most scathing attacks
were sharply relevant to those of Tanzania. Dumont, for example, hits out at what he calls “class
colonialism” -- privileged African groups overly aware of their new
dignity, with large official cars and high salaries. He calls the civil service a new type bourgeoisie, and ridicules
the jacket and tie in hot countries as a symbol of the alienation of the
bureaucrats from the “true proletarians of modern times,” the
peasants. He lashes the
metropolitan educational systems, still in style virtually throughout
Africa, for divorcing their products from the soil. He criticizes the South
Americanization of the cities, by which
he means the flocking of rural underemployed to the towns where they
swell the ranks of urban unemployed. He favors the introduction of draft animals, not tractors, and
believes full employment can be immediately achieved by convincing the
peasants to donate labor to development schemes. (4)
All this coincided closely with Nyerere’s own assessment of the
problems of Tanzania. Much of his “Education for Self-Reliance” comes almost
verbatim from False Start in
Africa, although much more comes from Nyerere. In August, Dumont arrived in Dar es Salaam at the request of the
President to advise the Government on rural development and to submit a
personal report to Nyerere. He
was in the country for six weeks and left, typically, with a blast at
the young civil servants who arrive at work at 9:30 while he, at
sixty-three, is on the job each day by 6:30. Nyerere’s “Socialism and Rural Development” was issued in
September, just after Dumont’s departure. (21) It would be difficult
to say which portions of that document come from Nyerere and which from
Dumont, they appear to think so much alike. Therein lies part of the
problem. Dumont’s strengths are Nyerere’s strengths, and his
weaknesses are also to some extent shared by the President.
Assessment of Arusha and After
It is impossible not to admire the courage and intelligence with
which President Nyerere has analyzed his country’s baffling problems
and set out to do something about them. Few leaders anywhere are prepared to slash the salaries of their
Ministers, to make them turn in their big cars, and then to tell them
that if by chance they have any money the only acceptable return on it
is the interest rate in the State bank. He doesn’t stop with the Ministers, of course; the peasant who
has followed the advice of the Government extension agent and
increased his income, and hence his holding, may feel equally misjudged
when told he is exploiting the men he hires to help him farm. But the problems of Tanzania, as a primary producer in a world of
falling export prices, are staggering, and the need for action urgent.
Much of what the President has done will not be criticized here. Salary reductions and smaller ministerial cars are positive
steps, and the general policy of turning from urban and industrial
development, under the present conditions, to rural development is
surely correct. If the full
range of policies set forth in the Arusha Declaration and “Socialism
and Rural Development” are vigorously implemented, however, the result
is likely to be very unfavorable for Tanzania’s growth.
Most of my doubts revolve around the question of incentives to
work and save, and this is a difficult area to deal with without letting
personal values prejudge the issues. Value judgments may be impossible to avoid, but I will try to use
examples to back up opinion as much as possible.
First, the limitation on returns to savings imposed by the Arusha
Declaration. The four to
six per cent interest rate likely to prevail may well lead to an
increase in luxury consumption. In
a country like Tanzania, where returns on investment are normally
several times that rate, the bank is unlikely to attract many savings
out of current income. It
would be possible to raise the interest rate the amount needed to
attract additional savings, but this would have some of the same moral
arguments against it as private investment, that it would tend to
create a privileged class with relatively high earnings.
Ironically, the rigid restrictions may actually foster
corruption, particularly if resentment against the regulations is
widespread, and there is some evidence that it is. In this situation, being unable to earn extra income legally,
the dissatisfied party leader or civil servant may accept bribes or
engage in other forms of corruption, his guilt lessened by the knowledge
that his peers feel as he does that his earnings are unfairly limited. This sort of behavior could become widespread.
It is still possible, of course, for Tanzanians who are not in
leadership positions to invest in profit-making enterprises, and several
in high positions have already decided to leave Government. But this creates class divisions just as the old system allegedly
did, and the dividing line is greatly sharpened. There is the additional point that the prohibition will leave
greater opportunities for Asian entrepreneurs, and this can hardly be a
The prohibition against having more than one salary is likely in
obvious ways to reduce the hours of effort a man is willing to make. There are admitted dangers in a one-party state when Government
and party leaders are permitted to be directors of important
international business organizations, but this abuse could perhaps have
been handled with conflict-of-interest legislation without the necessity
of a blanket prohibition against any form of “moonlighting.”
In a country where the single largest constraint is qualified
high-level manpower, a policy encouraging full utilization of what is
available would seem more sensible. *
Hirshman, for example, has recommended a policy almost directly opposite
to the Tanzanian: “The art of promoting development may consist
primarily in multiplying the opportunities to engage in these
dissonance-arousing actions (pursuit of individual profit,
entrepreneurial risk-taking, promotion according to merit, etc.), and in
inducing an initial commitment to them.” (11)
It is in the agricultural field where the adverse results of the
new policies are likely to be most severe. While it is generally accepted that the long-term elasticity of
demand for primary products lies somewhere below 0.7 (24), this is not
necessarily true for African products because of their small share of
the world market and their low labor costs. This comparative advantage can be maintained or even
increased as development successes in Latin America raise labor costs on
that continent still further (23), but this is only possible if African
production costs remain low, that is, if emphasis is put on efficiency
in both production and marketing.
The new policies are unlikely to promote this necessary
efficiency. The record of Tanzania’s state enterprises has been miserable
to date. Big game hunting,
nationalized in early 1966, was denationalized in October 1967, after
the state company lost $250,000. (14) Investment by state enterprises,
as we have already noted, is running at only 30% of plan targets. To turn a substantial responsibility for agricultural credit,
marketing and milling over to the state is to increase the demand for
managers at a time when the public sector is already in critically short
There is an important psychological point in connection with the
conduct of state enterprises. People
have been led to believe that the main reason Tanzania is poor is due to
foreign exploitation rather than low productivity. They are therefore likely to expect loans to be cheaper and more
available from nationalized banks, prices to be lower at state trading
companies, and wages to go up in nationalized businesses. (25)
There is little evidence that the peasants will welcome the
communal farm idea. John de
Wilde has noted that where Government has fostered African producers’
cooperatives, for example in Mali, the cooperative fields have remained
extremely modest and their cultivation generally has had a lower claim
on a farmer’s time than his private crop. Also, the standard of cultivation is usually below that of
individual farms. (3) Berg points out that there is a tendency to
coercion inherent in communal effort, but peasants cannot readily be
bullied because the retreat to subsistence cultivation is fairly easy.
(1) It seems quite likely that a farmer faced with the choice of joining
a producers’ cooperative or curtailing production to the level that he
and his family can handle, will choose the latter.
President Nyerere’s undeniable charisma may help him over some
of these shoals, but not all of them, and not for long. He seems, with commendable purity of purpose, to be leading his
poor country down the road to continued poverty. It was, perhaps, particularly unfortunate that his path should
cross with Dumont’s just at this time. Each has reinforced the other’s belief that if people can only
be made to stop exploiting other people, all will be well. Both rely on the same methods, largely exhortation well seasoned
with paternalism. Dumont
said, “The need now is to take the African peasant in hand, with
understanding and skill, and show him the advantages and necessity of
the modern techniques of cultivation and livestock management.”
A noble ambition, and Mwalimu took many a peasant by the hand on
his 138-mile walk, but one fears that moral encouragement may not be
One can readily sympathize with the President and share his
frustrations about the six years since independence. The failure of the
settlement schemes and the fall in sisal
prices in particular dealt him severe blows. But in retreating from pragmatism to ideology, he is accepting a
heavy moral burden. He is committing ten million people along with
himself. He will be judged, not by his conception of social justice, but
by the accuracy of his judgment of human behavior. If he is wrong in assuming that people will respond to the moral
incentives he offers, and there is evidence that he is, then the results
for Tanzania could be tragic.
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