Economy of Tanzania
The Tanzanian economy is overwhelmingly agrarian.
The country’s preoccupation with agricultural production, which increased
in the 1970s and ’80s, is a reflection of the government’s commitment at
that time to socialist development and central planning, as outlined in
the Arusha Declaration of 1967. The declaration also resulted in the
nationalization of a number of industries and public services. In the long
term, however, the centrally planned economy contributed to a marked
economic decline.
Beginning in 1979 and continuing into the 1980s, the relatively high
international oil price, the country’s declining terms of trade, and the
sluggishness of the domestic economy brought about rapid inflation and the
emergence of an unofficial market (consisting of the smuggling of goods
abroad in order to avoid taxes and price controls). Despite attempts to cut
imports to the barest minimum, the trade deficit widened to an
unprecedented level, and the balance-of-payments problem became
so acute that development projects had to be suspended. This economic
crisis forced the government to secure a loan from the International
Monetary Fund (IMF) in 1986. The loan’s conditions required the
elimination of subsidies and price controls as well as some social services
and staff positions in state-run enterprises. In the 1990s and 2000s, the
government continued to implement measures intended to create a mixed
economy and reduce the extent of the untaxable unofficial markets.
Frank Matthew Chiteji
Agriculture, forestry, and fishing
Some two-fifths of the country’s population is engaged in agricultural
production (working as independent producers or salaried farm labourers),
and agriculture accounts for approximately the same proportion of the
country’s gross domestic product. The major food crops are corn (maize),
rice, sorghum, millet, bananas, cassava (manioc), sweet potatoes, barley,
potatoes, and wheat. Corn and rice are the preferred cereals, whereas
cassava and sweet potatoes are used as famine-prevention crops because of
their drought-resistant qualities. In some areas food crops are sold as cash
crops. Agriculturalists in the Ruvuma and Rukwa regions, for example, have
specialized in commercial corn production, and in riverine areas, especially
along the Rufiji, rice is sold.
sisalLeaf fibres of sisal drying on poles, near Tanga, Tanzania.
Export cash crops are a source of foreign exchange for the country. Coffee
and cotton are by far the most important in this respect, but other exports
include cashew nuts, tea, tobacco, and sisal. Once the source of more than
nine-tenths of the world’s cloves, Zanzibar now produces only about one-
tenth of the international supply.
The villagization program of the mid-1970s was followed by government
efforts to distribute improved seed corn and fertilizers through the new
village administrations, but timely distribution of such agricultural inputs
was largely thwarted by the logistical problems of transporting them to the
villages. Nevertheless, increased yields, attributed to the use of chemical
fertilizers, have been achieved in corn production in the southern and
southwestern regions.
Tanzania’s native forests are primarily composed of hardwoods, but
softwood production is increasing. A large pulp and paper mill at Mufindi is
supplied by the extensive softwood forest nearby at Sao Hill.
Several lakes, especially Lake Victoria, are important sources of fish.
Prawns are commercially fished in the Rufiji River delta, but coastal fishery
is primarily of an artisanal nature.
Resources and power
Diamonds, gold, kaolin, gypsum, tin, and various gemstones, including
tanzanite, are mined in Tanzania. Gold is an important resource and the
country’s most valuable export. There are large exploitable deposits
of coal in the southwest, phosphate deposits in Arusha, and nickel in the
Kagera region. Natural gas has been discovered at Songo Songo Island.
Several international companies have been involved in onshore and offshore
petroleum exploration.
Imported petroleum, hydroelectric power, and coal are the main sources of
commercial energy. Firewood and charcoal are the major domestic fuels,
contributing to a growing concern about deforestation. Many Tanzanians
are unable to access the main power grid. The majority of those connected
reside in urban areas, and plans to take electricity to villages are intended
to have the added benefit of also slowing deforestation there.
