African Capacity Building: TANZANIA.
A Report for
The Bureau for Africa, Agency for International Development, September 1990
P. 2 of 2
STRUCTURE OF ECONOMIC DECISION MAKING IN THE GOVERNMENT
The role of the Party
in setting Government policy has already been mentioned. One senior
official said that Government officials have not been expected to use
any analytical skills they may have had; they have been charged only
with carrying out decisions from above. That, he indicated, was now
changing, and would change further once the leadership of Party and
Government is again unified.
Even if the
Government assumes more economic decision-making power, economic
sophistication at the ministerial level is quite limited. A senior
economist from UDSM serves as economic advisor to the President, which
may account in part for the positive movement visible in the overall
policy framework of the country. For day-to-day decisions, however,
ministers with limited economics backgrounds can misinterpret analytical
papers from staff and may give unbalanced attention to selected aspects
of comprehensive reports.
The World Bank office
in Dar es Salaam has sponsored seminars with senior policy-makers to
explore their vision of long-term national objectives, in the context of
the Bank report, Sub-Saharan Africa: Crisis and Prospects. The
annual workshop on economic policy issues sponsored by UDSM is also very
valuable in helping policy-makers understand economic issues, and their
participation in the events has been commendable. In addition, the UNDP
is mounting a program called SAATA, Strategic Adjustment Advice and
Training for Africa, designed to assist countries to analyze their own
problems and to negotiate effectively with major economic institutions
such as the World Bank and the IMF.
Secretaries meet regularly as an Interministerial Technical Committee,
under the leadership of the Principal Secretary in the President’s
Office. This is a useful intermediary group between the technical people
in Government and the political leaders.
An ad hoc group of technical people from the ministries concerned
prepares for negotiations with missions from the World Bank and IMF, and
then seeks to inform the political leaders of the issues.
The economic planning
function was taken out of the Ministry of Finance and vested in a
Planning Commission in July 1989. The “Profile” of the new
Commission, issued by the President’s office, acknowledged some
fundamental weaknesses of past approaches to planning. Development plans
have mainly been project lists submitted by implementing agencies
interested in pursuing their separate objectives. Inter-sectoral
linkages were not examined, impact on foreign exchange was often
ignored, and only pre-project planning was undertaken. Economic
activities already under way were not part of the planning process. Such
problems as the under-utilization of industrial capacity and the
shortage of crop-haulage vehicles were not part of planning, but were
dealt with through “crisis management.”
Commission is an independent department of Government under the Office
of the President. It is the highest advisory body to the Government and
has broad powers, on paper, relating to the planning and management of
the economy. The Commission has eight members, including the President,
who is the Chairman. Four of the other seven members are full-time, and
three, including the Minister for Finance, are part-time.
A Secretariat serves
the Commission. Significantly, the manpower planning function, which had
been removed from Finance and placed in the Ministry of Labor and
Manpower Development when Finance and Planning were previously united,
again is part of the planning operation. Manpower planning has
historically had unusual prominence in Tanzania, and continues to issue
remarkably comprehensive annual manpower reports to the President,
critically evaluating training institutions. The reports are quite
current; unfortunately, due to a backlog at the Government Printing
Office, the 1987 report is the most recent published. The structure of
the Secretariat is shown in Figure 2.
1 = Macro
Planning 2 = External
Sector 3 = Human Resource
Co-ordination and Monitoring
5 = Regional
Planning Rural Development
and Natural Resources
7 = Industry
and Minerals 8 = Economic
Services 9 = Social
Structure of the Commission's Secretariat
It is too early,
after only one year, to be confident of the Planning Commission’s
ability to exercise its powers vis-a-vis the Ministry of Finance and the
Tanzania has a
surprisingly strong statistical department, called Takwimu, although
delays at the Government printer mean published reports are available
only a year or more after they are completed.
Takwimu has 40 staff
members with a BA or above, of whom six are women. Five staff have
post-graduate diplomas in statistics and four, including one woman, have
MA degrees. One person has a PhD. There are seven professional staff
indices are produced quarterly in the main urban centers. Income surveys
are done twice a year and a survey is made annually of employment in
both public and private sectors. A labor force survey will be conducted
this year in cooperation with the Ministry of Labor. Industrial
statistics are available for 1989, but published only for 1988. National
accounts are available provisionally through 1989, but firm figures only
production sample surveys began in 1985-86 and an agricultural census is
planned for 1992-93. Two other sources of agricultural data are the
Marketing Development Board and the Extension Department in the Ministry
of Agriculture. In addition, the Party often gathers its own
agricultural statistics. Frequently
none of these data sources agree.
The Government of
Sweden, through SIDA, has assisted Takwimu since 1982, beginning with
training for regional officers. A three-month crash training course for
regional staff was followed by a three-year program at Uppsala. SIDA
provided vehicles and motorbikes to regional offices and sent section
heads from Takwimu to Sweden and elsewhere for study tours.
The second stage of
Takwimu/SIDA cooperation involved the initiation of the agricultural
sample survey. Swedish students and consultants worked on various
aspects of the survey. They also helped establish the quarterly survey
of industrial production.
SIDA assisted greatly
in data processing by supplying microcomputers and training Takwimu
staff in their use. They are also training people in desktop publishing
in order to overcome the delays of the Government printer.
SIDA is currently
seeking to assist the Ministry of Agriculture in gathering agricultural
data so that the differences between the Ministry and Takwimu reports
can be reconciled.
Sweden also provides
assistance in the statistical field to the East African Statistics
Center at UDSM, a regional center with support from the Economic
Commission for Africa (ECA), the Directorate of Civil Aviation, and the
Customs Department. SIDA is also active in the statistics field in
Zimbabwe and Lesotho.
favorable record of building statistical capacity, two factors suggest
that the improved system may not be well meshed with the policy-making
process. The first is that no macroeconomists are assigned to Takwimu, a
lack commented upon by two senior people outside of the department.
Secondly, Takwimu has little information about how its reports are used.
No feedback has been received from the Planning Commission, for example,
nor is the department aware of who uses agricultural data and for what
purposes. Many requests are received for cost of living data, and the
cooperation of Takwimu with the Ministry of Labor in conducting the
labor force survey increases the chances that the data will be gathered
and presented in a form useful to the main consumer, but for other
statistical series one has the impression that Takwimu is acting on
4. Points of
Economic Analysis in Government
The Ministry of
Finance and the Planning Commission, two organizations where one would
expect to find the most analytical competence in Government, have little
staff capacity to conduct studies. Both have high-quality leadership in
line positions, people with the training and experience to undertake
analytical studies if they had the time to do so, but they are forced to
turn outside the Government to the University to have studies conducted.
staff in the Planning Commission has 21 economists, of whom three are
women, but most of them are trained only to the BA level and they are
unable to conduct advanced research independently. The Commission is now
encouraging its staff to participate in collaborative studies with
university people, and allowing them to receive extra compensation for
doing so, but until more trained people are available, the net result is
likely to be meager.
Even the process of
defining research tasks can be time-consuming. One official in Planning
said it takes six months to formulate a good proposal, given the
pressures of day-to-day work confronting him. Planning has,
nevertheless, stimulated studies in the fields of data management,
transport and taxation, and cooperated with the staff of the World Bank
in defining many others.
Outside of Finance
and Planning, there are two offices with analytical competence: the
Economic Research Department of the Central Bank and the Marketing
Development Board in the Ministry of Agriculture.
Economic Research Department of the Central Bank
The Economic Research
Department is headed by an economist, Dr. Charles S. Kimei, who was
trained at UDSM and Uppsala. He is an Honorary Fellow of the Department
of Economics at Uppsala.
The Department has 32
economists, and plans to expand to 48. Twelve have MA degrees, seven of
them from Williams College. Altogether, the Central Bank employs 118
economists, two of whom are PhDs.
Each year, the
Central Bank analyzes exchange rates. UDSM people are sometimes invited
to participate in the exercise, but generally the two or three
economists equipped to do so are already heavily committed to other
activities. This year, a visiting scholar from the University of
Pennsylvania, based at UDSM, was very helpful in the exchange rate
Relations between the
Central Bank and the economists at UDSM are good, and Dr. Kimei plays an
active role in the annual workshop on economic policy held at the
University. Dr. Kimei feels that even closer relations between the
University, the Bank, and key economic organs of Government would be
The Bank has
initiated studies of domestic savings mobilization, clove production in
Zanzibar, and a Zanzibari importing agency. The studies are generally
operational in nature and not released to the public. Recommendations
are made to ministers and the President.
The Bank employs
simple models in some of its studies, but Dr. Kimei is quite clear about
the kinds of macroeconomic skills he finds appropriate to Tanzania’s
needs, and they do not include general equilibrium modeling.
Marketing Development Board, Ministry of Agriculture
The MDB is
responsible for research on responses of farmers to price changes,
forecasting returns from agricultural exports, and recommending prices
for marketing agricultural commodities. The Director, Mr. T. Banda,
believes the economic management problem has two major components: the
ability to do the analysis, and the ability to present recommendations
effectively. The recipient of the analysis must have a grasp of economic
concepts in order to comprehend the analysis and its implications. MDB
is able to generate good analyses and recommendations, but communication
of the import of their work is often a problem. Their work is well
received and understood at the technical levels, including the IMTC (the
Principal Secretaries). At the cabinet level, however, there can be
misunderstandings of the results of their analyses, decisions may be
made on the basis of issues incidental to the analysis, or they may be
delayed until small problems develop into big ones.
Food policy continues
to be a central issue for Tanzania and for the MDB. While the 1980s were
characterized by scarcity, now there is a maize surplus. Whether this
surplus is likely to endure or whether Tanzania will become, like
Zimbabwe, a country in surplus nationally but with serious food gaps at
the household level, are serious questions beyond the unit’s present
mandate. To focus more effective analytical efforts on these and related
food security issues, a new Food Security Unit will be set up in the
Ministry. Its core will be the present MDB, but it will incorporate
several other smaller units in Agriculture as well.
Mr. Banda recently
attended a regional food security meeting in Harare sponsored by
Michigan State University. He
had high praise for the benefits of being linked to a network of people
sharing a common problem focus. He noted particularly the complexity of
factors bearing on food security and the difficulty of capturing these
in an analysis.
What, for example,
are the conditions for the market mechanism to function or not to
function? He said removing taxes on agriculture did not seem to affect
production much, but interest rate reform, and more realistic foreign
exchange rates, led to production increases.
He stressed the
difficulty of presenting these complex issues to top-level decision
makers in a form that an economic layperson could understand. He
suggested a need for explainers or translators between those designing
policy options and those making the decisions.
On the staff of MDB
are 11 persons with masters’ degrees in agricultural economics. Nine
of these received their advanced training on FAO fellowships. Most staff
have been trained in the UK, but the Director is keen to diversify
backgrounds by sending more to American institutions. The unit had one
PhD staff member, but he left to take a job in a private consulting
stressed the need for staff to have a solid grounding in economic
theory. Most of his staff comes from the UDSM; graduates of the
agricultural university, Sokoine University in Morogoro, do not have
enough of a theoretical foundation to be effective analysts. After a
year at MDB, new staff are sent abroad for master’s training in
agricultural economics on FAO or other project funding. The Director
also encourages staff to attend short courses on agricultural policy
analysis, which attempt to link theory with practice.
In addition to the
MSU food security project, he noted a new regional project in
agricultural marketing that he saw as potentially very useful. Conceived
by FAO and funded by Japan (about $3 million), it will be centered at
the University of Zimbabwe and will involve Malawi, Kenya, Zimbabwe and
Tanzania. Among other things, it will support substantial training
Mr. Banda, like the
leadership of the Institute of Financial Management, attends closely to
issues affecting staff retention despite low government salaries. At the
“mechanical level,” MDP provides staff transport, computing
facilities, air conditioning, and comfortable work space. Substantively,
he has a well-defined work program, so that people know in advance what
will be expected of them. They get extensive feedback on their work.
Financially, there are some extra office consultancy opportunities, and
the Director is seeking some donor funds for salary topping for staff
working on particular projects.
A shortage of
physical space for staff is the main reason for MDB being below
complement. This and other resource problems may be overcome if the Food
Security Unit comes into being. It would involve large funding from FAO,
the Dutch, EEC, World Bank and UNDP, and have a major focus on women and
food security at the household level. (The Carter Center in Atlanta also
has expressed interest in the household food security/ women’s welfare
Overall, MDB appears
to be a relatively strong analytical unit with substantial further
potential. Despite low government salaries, it appears to have found
ways to motivate and retain staff at the master’s degree level.
OF ECONOMIC ANALYSIS OUTSIDE OF GOVERNMENT
Sources of External Economic Analysis
The Faculty of
Economics and the Economic Research Bureau (ERB) at UDSM are the main
sources of external economic analysis relied upon by the Government.
Sokoine University in Morogoro has expertise on agricultural matters,
and there is one consulting firm in the agribusiness field. The
Institute of Development Management (IDM) and the Institute of Financial
Management (IFM) contribute to economic management skills, but UDSM is
alone as a source of macroeconomic analysis.
The ERB was
originally set up, with Rockefeller Foundation assistance, to conduct
policy-oriented research in the context of the East African Community.
Both the Community and the Foundation left the scene, and for a period
the ERB and the Faculty endured relatively hard times. As the result of
increased demand for economic consultative services on the part of
Government and donor organizations, and with increased donor assistance,
conditions have improved for these units to the point where the World
Bank and others cite them as a model for economic capacity-building in
other African countries.
The Faculty of
Economics, according to Ian Porter, the World Bank’s representative in
Tanzania, is one of the best in Africa. The Faculty has twenty members
now, plus five seconded to Government or other institutions, such as the
African Economic Research Consortium. Twelve more economists are in the
ERB. Eighteen of the 27 economists attached to these units have doctoral
degrees, and four are women. The Faculty would like to expand its
numbers, but it has four vacancies now, which it is unable to fill.
At one time, the
University College of Dar es Salaam was something of a Mecca for the
more radical brand of young Western economist, but now visiting scholars
are few. The Department has two visitors, a Hungarian and a Ugandan, and
the ERB has an English economist supplied through Dutch assistance. The
Chairman of the Department, Dr. H. K. R. Amani, indicated that the
Faculty would welcome people on sabbatical or interested in doing
dissertation research and willing to teach part-time in return for
association with the University. Government clearances for research are
routine for people associated with the University, but not for
independent foreign scholars.
In 1979 the
Government of Sweden through SAREC began a program of assistance to ERB
and the Faculty of Economics that included degree training (discussed
below), support for selected conferences, computer equipment, and
occasional visiting scholars. Unfortunately, visiting scholars under the
program are generally only interested in short stays, but the overall
impact of the program has been highly positive. Other cooperating
programs include DANIDA and the Danish Research Council funding for
collaborative research with the Center for Development Research in
Copenhagen, Dutch funding for a senior visiting economist, collaborative
research links with Cornell and Michigan State Universities under AID
programs, a small collaborative research program with the Food Security
Group at Oxford funded by IDRC, and a major UNDP-funded research project
on the social dimensions of structural adjustment programs.
of Relationships between Government and University
Tanzania has never,
since independence, repressed academic freedoms. This doesn’t mean
that the University has been a hotbed of criticism of Government action,
even in the days of self-denial following the Arusha Declaration.
Indeed, it seems as if the political coloration of the University has
kept pace with changes in the Government’s own orientation, but one
cannot attribute this symmetry to any form of coercion.
The absence of
tension between Government and the University is demonstrated by the
fact that the planning committee of the ERB is chaired by the Principal
Secretary of the Planning Commission.
Finance, Trade, Industry, the Science Commission and the Party
are also represented. In turn, ERB staff participate in Government task
forces, such as one on incomes policy, and sit on statutory bodies such
as the National Productivity Council, the Board of Directors of the
Central Bank, and boards of various parastatal organizations.
As the Government
turns gradually towards a more market-oriented economy, it requires more
and more economic analysis and explanation of policy options. About
three years ago, the World Bank cut back on its practice of sending
massive teams of visiting staff and consultants to Tanzania and began
relying more extensively on studies produced in whole or in part by
local economists. Now, virtually every economic study financed by the
Bank has at least some local professional participation.
At the same time, the
Bank’s involvement in the economic affairs of its clients creates
additional demand for local expertise. Several officials commented that
Bank missions arrive staffed by economic experts from all over the
world, and they sit across the table from Tanzanian officials with
substantially less training and experience. The interest of these
officials in receiving assistance from their university compatriots is
Government interest in consultations with UDSM staff, in practice the
Government seeks external funding for local studies because the rates of
compensation involved are considerably above the salaries it is able to
pay. This can present a problem if the principal purpose of the activity
is to strengthen the Government’s hand in dealing with these same
Despite the highly
effective relationship between Government and University, points of
stress are becoming visible, and the system is very fragile. Already,
the demand for consultative services is affecting teaching
responsibilities, and members of the Faculty expressed concern that
excessive demand could lead to an erosion of teaching quality of the
University as its economists become overburdened.
In addition, the
demand is not evenly felt. Some Faculty members and ERB staff are better
known and in more demand than others, with the result that some may lag
behind in fulfilling responsibilities while others have time to spare.
Administrators have urged Government officials seeking consulting
assistance to make their requests through the ERB and the Faculty,
rather than contracting directly with individuals, but this practice is
not always followed.
can lead to a scatteration of effort, so that scholars have no clear
focus for their work. In addition, despite close working relationships,
the Government considers many economic issues sensitive, and in some
cases those who draft reports on issues are barred from policy
discussions of them.
University to Government and back again is possible, but infrequent. The
terms of service of Government are generally not attractive to
University people, and few civil servants have the qualifications sought
by the University. The potential gains from increasing the ease of
interchange of roles have been recognized by some, but the practical
difficulties have so far kept the frequency of realization low.
relationship now existing between Government and University is
demonstrated by the fact that attrition from the ERB and the Faculty of
Economics is practically nil, in contrast to a reported 14% annual
departure rate for people in other disciplines. The danger in the
present situation lies in the possibility that demand for economic
expertise may rise so much faster than its supply that well qualified
people find it more rewarding to set up their own consulting firms
rather than remain in either the University or the Government. In some
countries, an overheated demand situation, donorfueled, leads to
kickback requests from civil servants envious of the lucrative nature of
consulting assignments they were able to dispose of. The erosion of both
university and government quality can occur relatively quickly.
So far, consulting
rates are not exorbitant, unless compared with the monthly salaries paid
by the University. The Bank has set limits to compensation that are
attractive compared with base salary, but not enough to cause people to
scrap their regular employment and set up shop as consultants.
Role of Donors in Providing Policy Advice
We have already noted
that the World Bank finances many of the studies done for Government by
staff from the ERB or the Faculty of Economics. The Bank’s resident
staff also plays a major role in promoting the discussion of policy
issues among senior Government officials. Following publication of the
Bank’s recent report on Africa, Sub-Saharan Africa: Crisis and
Prospects, Ian Porter stimulated and participated in discussion of
long-term policy objectives, seeking to extend the time horizon of the
policy process. A workshop held in March featured the exposition of
longer-term objectives drawn up by each department of the Planning
Commission. The workshop, in which the Bank participated, drew up an
agenda of long-range research topics for which donor support is being
sought. The Bank staff also assisted in the preparation of Tanzania’s
paper for a conference on long-term development objectives in Africa
held in July in Holland.
The UNDP office in
Dar es Salaam also assists the Government at the policy level. A senior
UNDP official is setting up an office in Harare to assist African
governments in drawing up their own structural adjustment program. The
project is called SAATA, Strategic Adjustment Advice and Training for
Africa. Two missions headed by the project director, Dr. King, have
already visited Tanzania. The program targets three levels -- technical, principal secretary, and ministerial --
in order to ensure full understanding of the implications of
technical structural adjustments.
Another aspect of the
structural adjustment process of concern to the UNDP is reflected in a
newly-approved project on the Social Dimensions of Adjustment (SDA).
Research funded under this project, through the ERB, concentrates on
examining the impact of structural adjustment policies on vulnerable
groups in the society, such as women and children. Actually, the ERB
began research on SDA issues at the time of the first Economic Recovery
Program in 1986, well before international funding was available to
The UNDP also works
on economic management problems through the Management Development
Program. This is a special fund, outside the regular three-year country
budget, created to address management problems in African and other
countries. The initial MDP mission to Tanzania was headed by the Swedish
Minister for Public Administration, a person with extensive professional
experience in Tanzania through the Swedish assistance program. MDP is
not aimed at economic policy formation, but is targeted primarily on
massive problems of the country’s civil service --
its size, low salary levels, an unmanageable system of benefits,
and negligible motivation for productivity. MDP can devote only one to
two million dollars to working on these problems, but if the strategy it
devises is convincing, more resources are likely to be found from other
The World Bank is
making its own assessment of the problems of public sector management.
The next Structural Adjustment Loan (SAL) is scheduled to deal with the
industrial sector, but immediately following that, perhaps two years
from now, the Bank plans an SAL devoted to public management problems
such as tax administration, the budgetary process, civil service reform,
and parastatal restructuring. As the structural adjustment program goes
forward, it descends from the area of broad macroeconomic policy shifts,
which are likely to be popular, at least initially, to the more
difficult arena of curtailing the size and perquisites of the civil
service, where political consensus may be more elusive.
The World Bank and
the UNDP are thus playing useful and influential roles in the policy
environment of Tanzania, but perhaps the most striking aspect of the
situation concerns what they are not doing. Expatriate advisors or
officials are to be found nowhere in the upper reaches of the Tanzanian
Government. In this important sense, the Self Reliance objective of
the Mwalimu has been met. Whatever the mistakes of economic policy over
recent years, they are of local design.
officials and University administrators interviewed were remarkably
consistent in their assessment of priority training needs. Training in
macroeconomics is greatly in demand. The particular skill needs cited
included the ability to calculate effective exchange rates and effective
rates of protection, proficiency in forecasting Government revenue flows
and expenditures, public investment programming, and fiscal and monetary
Three levels of
training and familiarization are needed. For senior people in
Government, familiarization with macroeconomic concepts is essential,
particularly an awareness of the ways in which policies governing given
sectors of the economy impact on other sectors.
dealing with financial policies, planning, exchange rate management,
trade policies, agricultural pricing, etc., need to be able to carry out
macroeconomic calculations. A number of officials said that staff have
forgotten what training they have had and need re-tooling short courses.
Others favored master’s degree programs, such as those at Williams and
Vanderbilt, for gaining a theoretical grounding on which to base the
computational skills. Several senior people mentioned that even
university staff can benefit from short courses relating theory to
practical exercises, much in the way that law school graduates need to
study the practical dimensions of their trade in order to pass the bar
Doctoral training is
needed primarily by staff at the ERB and the Faculty of Economics.
Leaders of research centers in Government, such as at the Central Bank,
the Marketing Development Bureau, and those offices of the Planning
Commission and the Ministry of Finance that deal with economic strategy,
also benefit from doctoral training, but for the most part, solid
masters’ degrees in development economics are probably the best
investment for Tanzanian Government staff.
accountancy, banking and statistics training are also in demand, but
less urgently than macroeconomics. Time limitations precluded a thorough
examination of training needs in these fields, but we made calls on the
Institute of Financial Management, the National Board of Auditors and
Accountants, and the Department of Statistics, which provided some
insights into the availability of these skills.
In accounting, for
example, 8,000 technicians have been trained, but the need is estimated
to be 23,000. For fully trained professionals, a similar ratio prevails:
845 trained, but 3,000 needed. The fact that only 9 of the 845 fully
qualified professionals work for the Government may be more disquieting
than the shortage of absolute numbers. The terms of service for civil
service employment may be a considerable obstacle to improved economic
management, considering the important role Government has in the
accounting is offered at the IMF in Dar es Salaam, the IDM in Morogoro,
the Nyezezi Social Training Institute in Mwanza, and the Institute of
Accountants in Arusha. Only the Arusha Institute, which recently opened,
offers full professional qualification.
The IFM was
established in 1972 to provide training in banking and finance. It has
since broadened its offerings to include accounting, financial
management, social security administration and taxation. At present, a
third of its 700 students are in accounting. Demand for computer courses
has begun to rise sharply, and is expected to continue to increase as
more computers are imported under liberalized regulations.
The IFM is a
parastatal organization, as are most institutes and colleges. Four years
ago it had a 23.3 percent staff vacancy rate. According to the Annual
Manpower Report to the President of 1987, there was no solution in sight
to the exodus of trained manpower from IFM and similar training
institutions unless they were given enough leeway in terms of salary and
fringe benefits to compete with their “arch-rivals,” the private
companies and prestigious parastatals. Somewhat surprisingly, this
recommendation has been implemented, and the results are as the Manpower
Report predicted. The IFM has more applicants for positions than it can
fill, and the departure rate for staff has fallen sharply off.
The IFM incentive
scheme is simple: minimal teaching hours for each level of staff, from
six to ten hours per week, with extra teaching hours rewarded at a good
rate. The Institute divides short course fees between the instructor
(50%), the course designer (20%) and the staff welfare fund (30%).
Consulting fees, charged to clients at 6000 shs per day are divided
evenly between consultant and the Institute. Staff receive housing and
transportation to work, two important fringe benefits. Teaching staff
are permitted to earn as much as the Principal of the Institute without
shifting from teaching to administration.
The IFM has this kind
of flexibility, while other parastatal institutes do not, because it
earns virtually all its income and requires only a negligible subsidy
from Government. The IFM
accepts foreign students, and has a high reputation among donor
organizations in the regions for the quality of instruction offered.
Computer Training as a Strategy for Developing Analysis
Many of those
we interviewed commented on the great need for computer training at all
levels. Until recently, personal computers were seen as an inappropriate
technology for Tanzania in most of their common applications, because of
their labor-displacing potential. Importation
was difficult and expensive, and their use strongly discouraged. In
1990, however, this policy was completely reversed, and computers now
may be imported without restrictions. It appears likely that there will
be a rapid increase in personal computers both through their inclusion
in donor funded projects and commercial importation.
Since many people are
eager to learn computer skills, the introduction of computers can serve
to teach appropriate administrative and analytical skills at the same
time. For example, Lotus 123 skills can be learned in the context of how
to deflate a price index. Learning project management software can help
to teach project management skills. Learning to use a graphics package
helps to develop skills of graphical analysis, helps people to visualize
trends and relationships among variables that are not obvious in looking
at tabular material. That Tanzanians’ desire to learn computer skills
can be an important incentive and opportunity to build managerial and
analytical skills. Skills in how to run computer programs should be
recognized and incorporated in the design of capacity building projects.
in Computer Systems Design and Management
In terms of training
in computer operations, such as instruction in MS/DOS, Lotus 123, etc.,
there are enough knowledge, organizational interest, and entrepreneurial
skills for suitable training programs to emerge relatively
spontaneously. IFM, for example, already is offering a range of computer
training courses. However, as computers are introduced to large
institutions, the skills most critically missing are those pertaining to
overall systems design. As institutions seek to replace outdated
reporting and administrative systems with organization-wide computerized
management information and analysis systems, high levels of systems
analytical skills will be needed. One example cited was shifting the
whole social security payments system from a manual one to a
computerized one. Such transitions cannot be designed and managed by
people trained only in Lotus 123 and Word Perfect workshops. Thus one
aspect of capacity building is helping some high level managers to
develop a strategic perspective on the introduction of computers to
their organizations and then training technical experts in such topics
as system design and integration.
As an overall
observation on Tanzania’s situation vis-a-vis computers, coming late
to “the computer revolution” is not without its advantages. Tanzania
has virtually no installed base of obsolescent equipment with which new
purchases must be compatible. Like Germany after the destruction of her
industry, Tanzania could start with a relatively clean slate, avoiding
older generations of computer hardware and software. Capturing this
potential advantage will require well informed leadership to make sure
that the computerization of Tanzania’s major organizations takes place
in a systematic and sensible manner. A high priority in the capacity
building enterprise is provision to help develop the local capability to
lead such a transformation.
Much of the
difference between the current generation of personal computer software
and the last generation is manifest in improved ease of use, especially
the graphic user interfaces. Potential advisors may have a personal
investment in past systems, and the tendency to impose them on Tanzania
must be strongly resisted. Having no earlier generations of hardware and
software with which one must remain compatible gives Tanzania a great
opportunity to play technological leap-frog directly to systems more
powerful, yet easier to learn and use than the installed base of most of
the rest of the world. It would be too bad to forfeit this opportunity
by rushing to import the very systems the rest of the world is just
beginning to leave behind.
With its comparative
advantage in systems design and software integration, the US would seem
a natural source of appropriate expertise in this dimension of capacity
building. However, great care should be taken to assure that the current
“clean slate” is written on with sensitivity to local needs and
conditions, but also with full knowledge of today’s and tomorrow’s
5. Women in
included questions relating to the gender of the analytical staffs and
individuals in the training pipeline, and more importantly, how the
issue of gender was taken into account in the analyses themselves.
Virtually all of the institutions where we conducted interviews had
capable women economists on their staffs, but generally in relatively
low numbers (four of 32 at the Bank of Tanzania, three of 18 at the
Economic Research Bureau). A look at the training pipeline suggests that
it will not be easy to expand these numbers rapidly. For example, the
undergraduate economics program at the university includes relatively
few women, around 10%. The problem seems to stem from lack of earlier
training in quantitative skills which still seem to be relatively
stereotyped as a male domain. However, there are two strong candidates
in the Ph.D. program at Lund coming back to the University and the IFM
reports a number of qualified women awaiting graduate training
opportunities for which there is no sponsor available at the moment.
AID has been making a
special effort to recruit women in its merit-based training program,
Although the percentage of women applying is substantially below the
percentage of men applicants, there were enough strong women candidates
that half of this year’s participants are women. SIDA, as well as
USAID, has a longstanding interest in encouraging women professionals,
and a substantial part of the SIDA training funds are earmarked for
In terms of analysis
of the gender effects of various macroeconomic policies, Professor
Mbilinyi of the University’s IDS (Institute for Development Studies)
is preparing a paper on macroeconomic policy and women. This is not yet
available, but should shed useful light on the subject.
When we pursued these
gender issues in the Planning Commission, it was clear that whatever
their views on the subject, “We are forced to take account of gender
issues in all policy discussions.” Clearly the donors are making a
marked impact here. Moreover, the Commission appears receptive to
including women’s concerns in the policy agenda. “We say to the
representatives of women’s interests, ‘Bring us your agenda and we
will incorporate it.’”
The general policy
atmosphere appears hospitable to changes designed to remove gender
discriminatory policies and to create more opportunities for women.
However, from our interviews it appeared that the agenda for such policy
changes is not yet well developed.
We were not charged
with exploring the potential for MBA training in Africa, but the idea
was persuasively proposed to us in both Botswana and Nairobi, so we
mentioned it as a possible option to several officials. It seems
significant that some of the most senior officials concerned with policy
were most heartily in favor of the idea, and thought Tanzania would be
an ideal location for it. They said Tanzania is the African country most
convinced of the merits of the private enterprise system because “we
learned the hard way.”
Another aspect of
their interest in the business school concept is the feeling expressed
more than once that the Asian community has been the main beneficiary of
the Arusha Declaration. The private sector, said one, was left to the
Asians because of the restrictions on the behavior of Africans mandated
by the Declaration. The implication of the discussion was that for the
shift to private enterprise to be accomplished smoothly, Africa
entrepreneurs must be enabled to participate on a level playing field.
SUPPLY OF ECONOMIC ANALYSTS
In contrast to the
surging demand for economic analysis, the supply is expanding only
slowly. Retention rates of capable people in both Government and the
University, however, appear to be high.
Staffing of Government Offices
At one time, Tanzania
adopted the idea of an economic service in which trained analysts could
attain compensation and rank commensurate with their skills without
becoming line administrators. The decentralization program in the 1970s
led to the neglect of this concept. Government has decided to rebuild an
economic service, according to the Deputy Principal Secretary of
Planning, and is now taking an inventory of existing skills.
Most training of
Planning Commission staff abroad must be financed by donors. The Social
Dimensions of Adjustment project recently approved by the UNDP contains
some training money for Planning Commission staff. The heads of all the
departments in the Commission Secretariat have formed themselves into a
Training Committee, recognizing the central importance of upgrading
their own staff, but the needs far exceed likely resources. For the next
three years, the training plan of the Planning Commission cites the need
for sponsorship of 35 masters degree candidates and over 130 person
months of short courses.
of the priority of training needs, a personnel officer of the Commission
discouraged staff from applying for the USAID competitive training
program. He felt the competition was too tough for too few places.
The Research Department of the Central Bank, as noted above,
currently employs 32 economists and plans to expand soon to 48. Over
half of the 12 masters degree holders in the Department received their
degrees from Williams College, but funding for attendance in this
program has dried up and the Bank has been unable to send anyone in the
past two years.
The MDB does not seem
to be in particular need of additional funds for graduate training, in
contrast to the rest of the Government. FAO projects have provided
masters degree training for most staff in the past, and the new
Japanese-financed FAO project promises to continue to provide
appropriate opportunities. It is probably unwise for MDB to sponsor
doctors’ degree training. It would have difficulty retaining staff
once they had PhDs and masters training plus applied workshops should
adequately equip staff for their jobs.
The Government is now
permitting employees to join with outside consultants to conduct
commissioned studies, and to receive extra compensation for their
efforts. In practice, Government people are at a substantial
disadvantage because of their lack of training and equipment. When it
was allowed to bring in computers for carefully designed purposes, such
as research, the University acquired impressively up to date hardware
with funds from SIDA and other cooperating external agencies.
Government, however, stuck to pencil sharpeners.
In June of this year,
the quarantine of the computer quietly ended and free importation of
hardware was permitted. The demand for computer courses at the College
of Business Education, the Institute of Financial Management, and other
training facilities is already on its way up, but Government employees
are likely to be in the back of the queue behind the private sector and
parastatals as the machines become more available.
Staffing of ERB and the Faculty of Economics
The Faculty of
Economics at UDSM is the main source of supply for economic analysts.
About a hundred students are admitted to the Faculty each year, and
support courses in economic principles are offered for another 150
students taking management and commerce courses. At the master’s
degree level, five to ten candidates are admitted each year to an 18 to
24 month program, of which 9 months are devoted to course work and the
balance to the production of a thesis. The Faculty seeks to select
outstanding students from the MA program for retention, and to enroll
them in a PhD program, generally in cooperation with Swedish
universities, as soon thereafter as possible.
The system has not
suffered from uncontrolled expansion, unlike some African countries. The
University has had between three and four thousand students for a number
of years. Moreover, the Government stopped expanding secondary school
places several years ago, and actively discouraged the growth of private
schools, although they have expanded anyway. The quality of secondary
schools may have declined in the past decade or two, although this was
not possible to determine. The national examinations council still uses
the Cambridge system of setting 0 level and A level exams, but opinions
differ on whether Cambridge standards have been maintained.
In the past four or
five years, the Faculty has not identified outstanding MA candidates
from undergraduate ranks whom it wished to add to its staff. Most
candidates for the MA have come from Government, and they are bonded to
return to their employment. Only one candidate has been attracted to the
Faculty in four years.
Despite the lack of
recent intake to the Faculty, and to the ERB, there remains a backlog of
candidates for PhD training. UDSM has a SIDA-funded arrangement with
Swedish universities, coordinated by the University of Lund, under which
two candidates per year can begin course work in Sweden. After two years
of courses, the candidates select their thesis topics with the guidance
of a Swedish professor, and return to Tanzania for field research. In
Tanzania, the candidates also receive guidance from a local professor.
The degree, once earned, is from UDSM.
This system has been
of immense help to Tanzania, and is the main channel for the production
of doctoral degrees in economics. It is a rigorous channel, more
difficult than other PhD programs at UDSM. In other Faculties, course
work is not required and the time taken to achieve the degree is far
less than in economics. Some candidates for the sandwich degree have
taken ten years without as yet achieving their goal.
The Faculty would
welcome and would benefit from visiting scholars willing to teach, and
to participate in research and the preparation of manuscripts for
publication. Staff housing and office space are, however, in short
In Tanzania, unlike
Kenya and Botswana, there is general agreement that the economic policy
framework, until recently, has not been conducive to growth. Assistance
in building policy-making capacity is theref ore an appropriate focus
for donor intervention. There is considerable concern within the
Government over problems of the implementation of liberalization
policies once they are in effect.
Motivation was cited
as a key problem by senior people in both Finance and
commented that when Tanzanians go away to work for the African
Development Bank, or the East African Development Bank, they do very
well. The Tanzanian bureaucracy, however, does not do well, and even
when people have had successful assignments abroad, they go back to the
old ways when they return.
The Government is now
permitting staff of the Planning Commission to work on study teams with
consultants from UDSM and to receive commensurate extra compensation.
This may lessen the possibility of tensions arising between Government
staff and consultants in that case, but the broad problems of motivation
of civil servants remains.
Commission official estimated that only 30-50% of agreed programs are
implemented. The World Bank representative agreed that there are serious
problems of policy implementation and investment program implementation,
as well as policy formulation. The Bank plans to devote one of the
structural adjustment loans in the next two years to strengthening and
reforming the civil service, an arena where most donors have found it
difficult to succeed. In addition, the UNDP is devoting substantial
resources to the problems of the public service.
The importance and
complexity of the problems of economic management and policy
implementation do not lessen the profound importance of economic
analysis and policy formation, but they do suggest that concerted donor
action should not be too narrowly focused.
It is a particularly
auspicious time to try to expand Tanzania’s capacity for economic
analysis and management. Demand for analysis is growing rapidly inside
and outside of Government. The shift from decision making by party fiat
to a greater reliance on research and analysis, and from a state
controlled economy to one relying more on market forces, adds importance
to the understanding of how these forces work, the outcomes they may
generate, and the critical points where interventions or policy changes
may move the economy in desirable directions. Donor organizations, some
of the main consumers of economic research and analysis, are turning
increasingly to local analysts for inputs into virtually all economic
research they commission.
The demand for
analytical and management skills has outstripped the sources of supply.
Given Tanzania’s limited use of economic analysis in policy-making in
the past two decades, one might expect the economics faculty at the
University and the ERB to be near a state of collapse. To the contrary,
they are well staffed by a core of experienced and well trained senior
staff supported by reasonable numbers of good juniors; there is a decent
institutional base for expanding capacities.
In the long run, a
large country like Tanzania needs strong economics training capabilities
at both undergraduate and graduate levels. Although the University has
demonstrated its ability to retain economics staff, opportunities for
training new PhDs have declined sharply. Swedish universities are
providing virtually the only PhD training, and that path is long and the
number of places is limited. A number of qualified candidates are unable
In our view, any
economics department staff member qualified for rigorous graduate
training should be able to enter a program without delay. We also agree
with those in the University who believe the Faculty would benefit from
the diversity created through access to high-quality US institutions.
Although we support merit-based selection for most training
opportunities, that route may be too slow and unpredictable to be of
much benefit to the Faculty of Economics and the ERB.
There are a number of
ways in which the use of the existing stock of analytical capabilities
could be improved. Several people mentioned the gap that typically
exists between economics theory courses and the practical application of
economic tools in operational agencies and ministries. A few officials
from the Ministries of Finance and Agriculture have benefited from short
courses and workshops designed to bridge that gap, but the opportunities
for such training have been too scattered to do more than impress
participants with their eventual value. Conducting-well designed courses
on various aspects of applied economics right in the ministries where
the techniques will be used would be useful and cost-effective.
The MDB and the
Central Bank have succeeded in developing analytical competence is their
areas of expertise. Research and analysis units could also be built in
the Planning Commission and the Ministry of Finance. They need not rival
the ERB in the level of staff development, but they should have a solid
core of master’s degree holders who receive adequate incentives to
remain in analytical positions. Units of this type can improve the
utilization of research done outside of Government by defining and
interpreting the operational implications of the results.
The research skills
of the Faculty and the ERB might also be better used if overall research
themes were developed around which staff selection and training took
place. Government representatives help to set research themes now, but
because individual researchers are open to private arrangements with
official clients and donors, the allocation of effort is suboptimal.
Consideration is currently being given to organizing a
quasi-governmental research facility, possibly based on the ERB, which
would receive funding and direction from Government. This sort of
research institute has proved useful in several Asian countries.
research networks have had demonstrated value in several sectors, such
as the SADCC food security research network involving MSU with AID
support and the AERC research network supported by the IDRC and the
Rockefeller Foundation. There is scope for expansion of this sort of
international cooperation in a number of economic and social policy
areas. (To give an example remote from economic policy-making, AID
supports a network of Third World researchers through the Applied
Diarrheal Disease Research (ADDR) Project administered by HIID which
builds policy-related research competence. The scope for this Sort of
capacity building is broad and mechanisms for supporting these
activities seem adequately tested.)
The utility of
analytical capabilities can also be enhanced by improving the ability of
decision makers to understand research results and their practical
implications. ERB conducts a valuable annual forum for policy-makers,
with AID support, and SAATA is structured to ensure appropriate
participation in designing structural adjustments at several levels of
Finally, we believe
that Tanzania has influence and importance in Africa that goes well
beyond the recent success it has enjoyed in managing its economy. The
principled foreign policy the country has pursued, and the eloquence of
the Mwalimu in enunciating the country’s positions, have elevated the
nation to Third World leadership despite its chronic poverty.
Now Tanzania is
seriously trying to reverse direction and rely on the private sector to
lead in economic growth. Its progress in this endeavor will be watched
closely in Africa particularly because it is not saddled with enervating
corruption or political repression. Success is far from assured because,
since the Arusha Declaration in 1967, the Africans in Tanzania have been
inhibited in their pursuit of private gain. As one official commented,
the Asians were left in control of the private sector.
Unless ways are found
to stimulate and assist in the growth of indigenous entrepreneurship, it
seems unlikely that Tanzania can pursue a private enterprise-oriented
policy for long without encountering popular resistance. For this
reason, it seems especially important for AID to consider measures to
stimulate indigenous private sector development.