‘One African country that seems unable to put a foot wrong at the moment is Tanzania’ according to the March issue of ‘African Business’. IMF Director for Africa Goodall Gondwe spoke of Tanzania’s improving economy as a ‘tremendous achievement’. ‘Africa Confidential’ headed its most recent article on Tanzania: ‘Baby Tiger – At Last Some Good Economic News to Bolster President Mkapa’s Multi-party Democracy’ as some people even began to say that Tanzania could develop, in the new millennium, into one of the first ‘tiger economies’ in Africa.

ONE BILLION DOLLARS IN DEBT RELIEF
It was announced on January 23 that Tanzania had received a seal of approval from the Paris Club of donors. It had been given the most generous terms of debt reduction currently available for the world’s poorest nations – a debt relief programme of $1 billion (Shs 600 billion). The total debt is $7.8 billion. This relief should bring the government’s debt repayment to the 12 Club members in the financial year 1996/97 to Shs 44 billion instead of the Shs 100 billion anticipated. The remaining Shs 56 billion ($700 million) will be either rescheduled or refinanced over a period of 23 years including a six-year grace period on debt payment. In addition each creditor country can – separately – convert some Tanzanian debt into development projects. The creditor nations said that Tanzania’s very low per capita income and its very severe debt burden justified an exceptional treatment of the debt.

The debt relief followed President Mkapa’s agreement to split the National Bank of Commerce into three parts. World Bank Resident Representative Ron Brigish said the debt relief was a major pat on the back for the government of President Mwinyi and its tough economic policies. “Tanzania is now back in the fold” he said.

VERY ENCOURAGING SIGNS IN THE LATEST ECONOMIC DATA
Tanzania’s GDP growth rate reached 4.5% in the first half of 1996/97 and Tanzania’s foreign reserves have reached a record $450 million, the highest in the country’s history, following strong export growth and new donor support. Inflation has dropped at a record rate from 27% a year ago to 13.8% in February this year, the lowest figure for 11 years. Export earnings are up from $500 million on average for the last five years to $762 million last year. Revenue collection has improved substantially from Shs 29 million per month last year to Shs 45 million this year. The over-manned and underpaid civil service has been cut back from 335,000 to 275,000 since 1992 and those made redundant have received donor- financed compensation packages.

Foreign investors are coming back slowly but many are waiting for the passage of the new ‘Investment Bill’ which came before parliament in April. New investors in mining have recently claimed to have found up to 410 metric tonnes of gold which could eventually put Tanzania in the same league as South Africa and Ghana as an African gold producer. The huge new project in Kilwa, now well under way, will provide Dar es Salaam (and even parts of Kenya) with electricity from natural gas within two years. Tourism is beginning a boom – receipts are up from $250 million in 1995 to $322 million in 1996 and new hotels are springing up all over the country. And between 1992 and 1996, 125 of the country’s 400 mostly dilapidated parastatal industries have been wholly or partially privatised and many are now coming back into production. For the first time in its recent history, as a result of its tight monetary and credit stance, the government is expected to be in a position to meet 60% of its expenses during the next financial year instead of relying on borrowing or from the donor community for the major part of its expenditure.

The Dar es Salaam ‘Business Times’ is full of praise for what it believes to be the recommendations of the ‘Presidential Task Force on Tax Rationalisation’ which was due to present its report as this issue of TA went to press. The proposals could, if implemented, increase revenue collection from this years’ estimated Shs 564 billion to Shs 790 billion next year. ‘This would be a phenomenal improvement over a single year’ the paper wrote.

Meanwhile, the second tranche ($40million) of the IMF’s Enhanced Structural Adjustment Facility (ESAF) has been released; the money is to help increase allocations in the 1996/97 budget for the very hard pressed education, health and water supply sectors of the economy.

Finance Minister Daniel Yona attributed these positive trends in the economy to the radical reforms adopted in the mid-1980’s at the behest of the World Bank and the IMF.

FOREIGN AID RESUMES
Following the agreements with the IMF, the freeze on foreign aid, which was introduced at the time of the tax exemption scandal two years ago, has now ended. Tanzania has been picked as one of the six developing countries in Africa selected for Japanese aid; a representative of the Japanese Ministry of Foreign Affairs said that Japan was impressed by Tanzania’s political and economic changes. The EC’s latest package of grant aid for Tanzania is the second largest to be given amongst all 70 member countries of the ACP. Norway has agreed to provide $50 million in development aid this year, Denmark has promised Shs 150 billion and the African Development Bank is releasing $21.5 million for the first phase of a $281 million project to ease Dar es Salaam’s chronic water shortage.

But, to put matters into perspective, it has also been announced recently that about 60% of rural people and 39% of urban inhabitants have incomes below the poverty line.

AND IN ZANZIBAR
Here too, in spite of the continued reluctance of foreign donors to give further assistance pending a solution to the political deadlock, the economic news has been encouraging. The ‘Business Times’ reports that GDP growth was 3.9% in 1996/97 compared with 3.7% the previous year. Clove production increased to 10,105 tons last season, the best for three years but copra went down by 51%. Inflation has dropped to 12.6% compared with 30.8% the previous year. Revenue collection remained poor. Tourism has become Zanzibar’s second most important foreign exchange earner (after cloves). Tourist numbers increased from less than 30,000 in 1985 to 56,415 in 1995 and the number of hotels and guest houses had increased from 10 to 100.

AND THE NOT SO GOOO NEWS
Tanzania has shown once again how harsh its climate can be. Following the failure of the short rains, severe drought – in some areas the worst for forty years according to the ‘East African’ – has been afflicting almost four million people in nine regions of the country and foreign donors have been asked for assistance. Dar es Salaam’s three million population has been suffering from severe water shortage because of the very low level of the Ruvu river and breakdowns in equipment.

And then, with the beginning of the main rains in late March, the skies opened all over the country and there have very been very severe floods. Some 40 people are believed to have been killed and 2,100 people have been rendered homeless in Kilwa District.

There has never been anything quite like it in Tanzania or even in many other countries. Few administrations in the world seem to be as willing as the Mkapa government to wash their dirty linen in so public a way. There were screaming headlines and juicy stories in the press. Some tabloid newspapers began serialising it. And some big people were mentioned including a former prime minister, a cabinet minister, six former cabinet ministers, a former chief secretary, a chief engineer and a former mayor of Dar es Salaam.

The 521-page report published by former Prime Minister and Attorney General Joseph Warioba and his nine-person Presidential Commission has revealed corruption everywhere:

• in 20 lodges and hotels in game parks and in hotels in Dar es Salaam and Kigoma;
• in the offices of the Ministry of Home Affairs, the Attorney General, the ministries of education, health and lands;
• in the Treasury and the ‘Investment Promotion Centre’ where tax exemptions had been given to rich businessmen;
• in the use of the VIP lounge at the Dar es Salaam airport;
• in the National Bank of Commerce (uncovered loans);
• in 15 private companies (not repaying loans);
• in the social services (for example, demanding money for hospital beds);
• and especially in the police force where it was said to be deep-rooted throughout the hierarchy; and in the courts (‘judgements are written in the streets without even a hearing’);
• amongst journalists for ‘cheque book’ journalism – accepting bribes to write or not to write revealing stories; and so on.

The Warioba Report said that Tanzania inherited the ‘Colonial Anti-Corruption Law’ of 1958. The report went on: “Because at that time public servants observed ethical standards for civil servants and because corruption was limited to the lower and middle grade officers who had direct connections with the delivery of services to the public, this law was adequate. After independence, the public service expanded very rapidly, public servants started to behave contrary to the civil service code of conduct and began to use their offices for private economic gain …….it has become evident that the greatest source of corruption in the country is (now) not the poor economy and low salaries, although these too have played some part. The greatest source is laxity of leadership in overseeing the implementation of established norms …. most leaders do not understand the seriousness of the problem …. most believe that corruption is more widespread in the lower and middle grades of the public service. In the Police Force 123 policemen had been dismissed for corruption in the last six years but of these 120 had been constables and only one was of the rank of Assistant Superintendent … if we want to rid ourselves of corruption we must begin by cleaning the top leadership ranks:

The report makes a large number of recommendations covering all departments of government. Among recommendations are the following:

• the setting up of a ‘Truth Commission’ to prepare a code of ethics, to administer oaths, to take legal action against those making false declarations ….
• declaration by leaders of all presents received ….
• forfeiture of property for breaches of established rules …
• changes in the Anti-Corruption Bureau … the benefits for its employees should be improved;
• policemen should be transferred more frequently;
• the size of the government should be reduced …… and many more.

President Mkapa has announced that a team of experts is working on the feasibility of taking criminal action against those implicated in the report. If there was enough basis for action the culprits would be prosecuted. If not, disciplinary action like retirement would be instituted.

The Warioba Report had its critics. Munir Daya in the ‘Sunday News’ wrote that the persons mentioned in the report had been tried, convicted and punished by the press without them being given a chance to defend themselves. Ludovic Ngatara in the Dar es Salaam ‘Guardian’ used the simile ‘Unchained dogs after long captivity’ to describe the opportunity which had been offered, when, in the late eighties, the CCM’s unpopular ‘Leadership Code’ had been abandoned and replaced by the ‘Zanzibar Declaration’. ‘The unchained party and government leaders ‘ he wrote, ‘rushed for all sorts of whatever seemed to be of some value for enriching themselves’. The article then listed examples of these things, including funds levied for the construction of the CCM headquarters, foreign exchange obtained for export crops, donor funds, bank borrowings, land reserved for wildlife. . . . .. and went on to say that, since nearly all government and party leaders had been involved in corruption, the Warioba Commission should have named those who were not corrupt. “Everyone has been doing it, Why only us?” (Thank you Simon Hardwick for bringing this latter news to my attention – Editor).

MINISTER RESIGNS
A few days after the report was published, and in which he had been mentioned in connection with allegations about the issue of a hunting licence to the Deputy Minister of Defence in the United Arab Emirates, Dr. Juma Ngasongwa, Minister for Natural Resources and Tourism resigned from the government. This, he said, in his letter of resignation, was ‘to enable state organs to investigate the allegations that featured in the report’. President Mkapa replied by commending the Minister saying that by the action he had taken he had demonstrated his sense of accountability and loyalty to the CCM. At the hearing of a separate election petition in court in March however, which alleged infringement of election rules by Dr. Ngasongwa, the judge found that all the charges against the MP’s conduct of his election campaign had been ‘baseless’.

NEW ANTI-CORRUPTION MEASURES
On February 21 Prime Minister Frederick Sumaye directed the new Tanzania Revenue Authority to sack all its corrupt officials (“who are known to fellow workers” he said) before the end of their one-year probationary period. Instructions were also issued that by June 30, Ministers, Regional Commissioners, District Commissioners, and departmental and parastatal heads had to submit to the Prime Minister reports on the actions they intended to take to stop corruption in their respective jurisdictions in accordance with the Warioba Report.