The faltering output of the agricultural export sector also manifested itself in the rapid deterioration of public services. In a largely agricultural country such as Tanzania, education, health, water supply, public transportation, trash collection, and energy provision also require inputs that are only available on international markets. With the supply of hard currency increasingly diminished, schools suffered from the lack of books and other supplies; hospitals, from the scarcity of drugs and medical equipment; public buses and trucks from the lack of replacement parts and fuel; and infrastructure improvement from the lack of virtually everything. Even the most vital urban services became badly degraded: water and electricity supply, trash collection, and public transportation operated intermittently at best and became increasingly unreliable, posing added risks to public health. During the 1970s, Tanzania was struck with a new and more lethal form of malaria, one that required hospitalization and continuous intravenous hydration. The patients with the best chance of survival were those who could bring their own intravenous kits to the country’s medical centers. Ordinary Tanzanians found it difficult to afford these kits. Those who could afford them quickly found that the supply in local pharmacies was quickly exhausted, after which, Tanzanians could only purchase the kits in high-priced parallel markets. To make matters worse, the malaria kits had to be stored in refrigerators, also a parallel market commodity.
Daily life for ordinary Tanzanians became painfully difficult. Urban dwellers faced scarcities of virtually every necessity. Dar es Salaam is a sprawling city whose working-class neighborhoods are distant from the city center where most businesses, factories, and government offices are located. For many residents, the daily commute to work became an agony of unavailable or unpredictable bus service. Indeed, many residents simply had to walk, sometimes for several hours each way, between their homes in the residential areas and their jobs in the city center. The deterioration of public and private sector services made it necessary for employees of schools, hospitals, banks, and telecommunications companies to divert much of their time to scouring the marketplace for essential items. There was unremitting uncertainty as to whether such basic household necessities as maize meal, sugar and salt, cooking oil, or natural gas would be available in formal markets—and less uncertainty about their availability in parallel markets, with prices there reflecting the scarcity that prevailed throughout the country.
Life in the rural areas became even more impoverished. Vital consumer goods were even scarcer in the rural areas, where purchasing power was so low that even parallel markets sometimes failed to materialize. Tanzania’s rural population consists overwhelmingly of small farmers, and for this major segment of the population, economic life was subject to extreme difficulty. One of the great ironies of food aid programs in contemporary Africa is that they find it necessary to deliver basic foodstuffs to rural populations who, under most conditions, ought to be supplying these for themselves along with a surplus for urban consumption. Throughout much of the Tanzanian countryside, such vitally important production goods as hoes and shovels became scarcer and more costly. Critical inputs such as fertilizers and pesticides became less available at any price. The deterioration of the rural infrastructure made it increasingly difficult to travel from farm to township to market products or obtain inputs. The socioeconomic gap between the countryside and the city grew ever larger.
The economic decline brought latent racism to the surface. In Tanzania in the early 1980s a strain of anti-Asian sentiment began to emerge that had always been present but had remained largely dormant under the influence of the Nyerere government’s insistence on multiculturalism and while economic conditions were still relatively tolerable. Anti-Asian sentiment had been a part of the country’s political discourse since the nationalist period when the Tanzanian African National Congress (ANC) sought popular traction by criticizing Nyerere and TANU for being insufficiently proactive toward Asian dominance in the mercantile sector. The ANC had also sought political support by asserting that mid-level Asian civil servants tended to stand in the way of upward mobility for Africans. Even Nyerere’s government turned to racist measures to deflect attention from economic conditions. The Acquisition of Buildings Act of 1971,8 though nominally part of the government’s socialist agenda, was in reality a legalized confiscation of Asian-owned rental property.
One of the enduring questions in the Tanzanian political economy is why the government delayed so long before implementing reforms that might have reversed the downward spiral. One source of delay was the absence of an alternative economic theory that could explain why the economy was performing so poorly and what steps were necessary to improve things. Although the World Bank had published its transformative report Accelerated Development in 1981, and although a small number of Tanzanian economists had begun to envision the need for a more market-based approach to the country’s economic management, the political elite continued to be enthralled by the Nyerere ethos of socialism through central planning. Fear of punishment for dissenting views trapped Tanzanian leadership in a perverse game of rescue the failed hypothesis. Anyone who openly challenged the official economic orthodoxy risked harassment, dismissal, imprisonment, or worse.
The economic reasoning that prevailed during this period held that since socialism must be correct, the causes of economic failure must lie elsewhere. The cloak of infallibility that enveloped the president’s approach to development caused Tanzanians to look for traitors in their midst to explain the country’s economic decline. A politically popular explanation for the country’s economic difficulties was the presence of economic saboteurs who were attempting to undermine the economy from within. This, too, was a form of racial scapegoating. Although it was not explicitly racial, everyone understood that the term saboteur was code to refer to the Asian merchant class that had historically been a major presence in the Tanzanian retail sector. Under the influence of a highly popular political figure, Edward Sokoine, who became prime minister in February 1983, the Tanzanian government passed an Economic Sabotage Act that gave it broad authority to take action against individuals and businesses suspected of creating and profiting from the scarcities.9 Under the new law, businesses that sought to maintain an inventory of essential goods could be charged with “economic sabotage,” a crime that might be punished with lengthy imprisonment.
To implement the law, the government initiated an anti-economic saboteur campaign, and by April 1983 there were more than four thousand arrests under the law.10 Although the majority of those arrested were Asian merchants accused of the economic crime of hoarding, some were the African managers of state-owned trading companies. Practically all were imprisoned. Most of the private merchants arrested also suffered confiscation of their warehouses and stocks of consumer goods. The anti-saboteur campaign was a dismal failure that only made matters worse. It had a chilling effect on the entire Tanzanian business community; the atmosphere of fear it created only exacerbated scarcities that were already severe because of the degraded economic environment.
Viewed in retrospect, Sokoine’s effort to convince the Tanzanian public that the country’s economic woes were the result of the self-seeking behavior of a small number of greedy merchants—not the deficiencies of a dubious theory of development—was the last gasp for the Nyerere ethos. Since the Sokoine arrests included a number of successful African business entrepreneurs and managers, his approach