The Tanzanian balance of payment crisis: causes, consequences, and lessons for a survival strategy.

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University of Dar es Salaam
This study examines the issues surrounding the current balance of payments crisis in Tanzania. The introductory chapter reviews the types of export options open to non-oil producing Third World countries such as Tanzania. Chapter Two reviews Tanzania’s balance of payments position in the post-Independence period, and interprets the developments leading to the current deficit. The primary cause is seen to be the inability of the economy’s weak export sector to generate sufficient foreign exchange to meet its expanding import requirements. The third and fourth chapters examine respectively the formulation of an export policy in the 1970s and the effects which the implementation of that policy has had on the economy’s export performance. Policymakers are seen to have neglected the importance of traditional agricultural exports, at the same time attaching great importance to the development of manufactured exports. As a result of over investment in industrial development, and insufficient attention to the many problems which Tanzanian industries would face in exporting, the performance of manufactured exports has been dismal. At the same time, agricultural policy has adversely affected export crop production in a number of ways. Chapter Five returns to the current situation, and assesses the government’s response to the crisis in light of the experiences of the past decade. The government is seen to have recognised many of the past problems in the export sector, and to have undertaken steps to correct some of these. On balance, however, the survival strategy’s heavy emphasis on manufactured exports, coupled with insufficient attention to the needs of the agricultural sector, suggest that its chances for success are not great.
Fiscal policy, Tanzania, Balance of payments, Economic aspects
Hanak, E. E.(1981) The Tanzanian balance of payment crisis: causes, consequences, and lessons for a survival strategy, Masters dissertation,University of Dar es Salaam. Available at (