AID and African Capacity Building: TANZANIA. A Report for The Bureau for Africa, Agency for International Development, September 1990         P. 2 of 2

D.  STRUCTURE OF ECONOMIC DECISION MAKING IN THE GOVERNMENT

1. Executive Decision-Making

          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.

          The Principal 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.

2. The Planning Commission

          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.”

          The Planning 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 Planning

4 = Co-ordination and Monitoring

5 = Regional Planning Rural Development

6 =Agricultural and Natural Resources

7 = Industry and Minerals  8 = Economic Services  9 = Social Services

Figure 2. 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 sectoral ministries.

3. Department of Statistics

          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 vacancies.

          Consumer price 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 until 1987.

          In agriculture, 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.

          Despite this 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 faith.

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.

          The macroeconomics 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.

          a.  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 study.

          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 beneficial.

          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.

          b.  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 firm.

          Director Banda 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 opportunities.

          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 nexus.)

          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.

E. SOURCES OF ECONOMIC ANALYSIS OUTSIDE OF GOVERNMENT

1.  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.

2.  Pattern 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 understandably great.

          Despite growing 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 funders.

          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.

          Unorganized demand 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.

          Movement from 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.

          The healthy 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.

3.  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 support it.

          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 donors.

          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.

F.  TRAINING PRIORITIES

1. Macroeconomics

          The Government 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 policy analysis.

          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.

          Government staff 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 exam.

          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.

2. Economic Management Skills

          Management, 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 economy.

          Training in 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.

3.  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.

4. Training 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 technological possibilities.

5. Women in Development

          Our interviews 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 women.

          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.

6. Business School Training

          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.

G.  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.

1.  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.

          Despite recognition 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.

2.  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 supply.

H. POLICY IMPLEMENTATION

          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

Planning. One 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.

          One Planning 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.

I. CONCLUSION

          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 to participate.

          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.

          Problem-focused 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 government.

          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.