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At 39, A Nation Still Stunted By Poverty

By Anaclet Rwegayura, Panafrican News Agency, 9 December 2000

Dar Es Salaam, Tanzania - Tanzania mainland, formerly known as Tanganyika, Saturday marked its 39th independence anniversary with a simple military parade that was reviewed by President Benjamin Mkapa at the national stadium in Dar Es Salaam.

Other national leaders, including Vice-President Omar Ali Juma and Zanzibar's newly elected President Amani Abeid Karume watched the parade involving military, police and prisons service units.

At independence from British colonial rule in 1961, Tanganyika aspired to have broken the back of poverty, ignorance and diseases by now.

Even after merging with the offshore Indian Ocean islands of Zanzibar on 26 April 1964, the new Tanzanian nation had the same aim.

Over the last four decades, the country has gone through several vicissitudes but with little change to its lot.

Tanzania's present leadership is a new generation. It maintains that the country is ripe for an economic renaissance.

In the last 10 years, the Tanzania Investment Centre has approved 1,588 new investment projects in agriculture, tourism, mining, manufacturing, transport and services, hoping to lead the country to a new chapter of growth.

But the question analysts ask is whether those ventures will enable economic development to trickle down to the poor, the majority of the population.

A number of studies in different countries have shown that economic growth can reduce poverty, provided there are additional measures taken to ensure that the income of the poor grows too.

Due to widespread poverty, TIC executive director Samuel Sitta says his worry is about the small size of the Tanzanian market to be able to absorb products of new investments.

This may be a temporary constraint. Tanzania, Kenya and Uganda will before the end of the year unveil the East African Community, which aims at creating a common market for their combined population of 80 million.

Stressing Tanzania's need for more foreign direct investment, the state minister responsible for economic planning and privatisation of state-owned enterprises, Abdallah Kigoda, has advised the TIC to entice investors to put their money in projects which will speed up economic growth.

During the struggle for independence, Tanzania's rallying cry was Freedom and Unity. The country won its political freedom and its people remained united as a nation, an enviable achievement in conflict-ridden Africa.

Though Tanzania has enjoyed peace for the last four decades, its three arch enemies remain entrenched.

Since the early 1980s the country has experienced a profound economic crisis as it groped about for a programme that would put the economy on the right track and meet the needs of the majority Tanzanians.

Many countries in sub-Sahara Africa have been in the same predicament until they realised that the crisis was not transitory but of a structural nature.

The crisis originated partly from errors committed by governments plagued with growing pains and partly from problems in the external sector.

The economic crisis, together with the spreading poverty and the low prospects for employment, call for a new model of development.

Presently, most affected countries, including Tanzania, focus attention and efforts on qualification for external debt relief under the enhanced Heavily Indebted Poor Countries (HIPC) initiative. But what comes next after debt relief? Development must continue.

Until recently the main condition for qualification has been to develop elaborate Poverty Reduction Strategy Papers or PRSPs before receiving approval for debt reduction.

During their joint annual meeting in Prague, the Czech capital, in September, the boards of governors of the World bank and the International Monetary Fund agreed to slightly modify the rigorous conditions for relief under the HIPC initiative.

What they want to see, according to the World Bank's HIPC Implementation Unit manager, Axel van Trotsenburg, are intermediate steps taken on poverty reduction and which can produce results in a relatively short time.

Tanzania completed its PRSP in August and it has this month qualified for the HIPC debt relief.

Money that was supposed to be spent on external debt servicing will now be directed to improvement of social services.

At the end of August, Tanzania's committed external debt was USD 7,688.8 million, with USD 1,214.8 million still un-disbursed. Of the outstanding debt, 54.9 percent was owed to multilateral creditors and 38.2 percent to bilateral creditors.

Commercial sources and other private creditors accounted for 4 percent and 2.9 percent respectively, according to the Bank of Tanzania.

UNDP Resident Representative in Tanzania, Sally Fegan-Wyles is of the opinion that providing the rural small producers access to market should be a key strategy to poverty eradication.

Looking at the poverty map of Tanzania, it is mainly whether people in rural areas have access to markets or not, she said this week at a workshop on promotion of labour-based technology.

The UNDP representative challenged the government to adopt strategies that will ensure the country's rural roads network has a positive impact on overcoming poverty.

In the last five years, President Mkapa has strived to put Tanzania's economic house in order by cutting out its inefficient corporations and by instituting prudent fiscal and monetary policies.

As a result, annual headline inflation has dropped from nearly 30 percent in 1995 to 5.7 percent. For the next five years of his final term, Tanzanians look forward not just to a lighter debt burden, but also a little greater margin of economic independence.