Nyerere approached the Third FYP much more soberly. The plan concentrated on developing Tanzania's infrastructure, improving basic facilities, such as water and electricity supplies, and developing scientific and technological research. Nationalization was not abandoned but Nyerere made it clear that the private sector was now fully acceptable in the nation's economy. His more conservative approach was explained by events in Africa and the wider world which cut across developments in Tanzania.
The impact of the international oil crisis, 1973
The worldwide recession created by the rapid increase in oil prices in the 1970s impacted particularly severely on the Tanzanian economy. Despite cutting back on its purchase of oil from abroad by 20 per cent, Tanzania still saw the cost of its fuel imports quadruple between 1972 and 1977. This coincided with the income from Tanzania's exports (mainly coffee, cotton and tobacco) dropping by over 30 per cent in the same period. Falling profits led to companies cutting back on production and laying off workers.
The collapse of the East African Community (EAC), 1977
EAC was a common market and trading partnership formed in 1967 between Burundi, Kenya, Rwanda, Uganda and Tanzania. It lasted a decade until its collapse in 1977, caused largely by the disruptive behaviour of Uganda's Idi Amin (see below). The EAC had provided Tanzania with cheap resources, particularly for its aviation and telecommunications industries. With the EAC's disintegration, Tanzania now had to purchase these resources at a higher price from Europe and North America. This involved spending its limited foreign exchange reserves to import materials and equipment. Tanzania suffered losses of $200 million.
The Ugandan War, 1979-81
Idi Amin had seized power in Uganda in a military coup in 1971. Over the next eight years, he ran a fierce dictatorship which resulted in the death of more than 300,000 people. Responding to appeals from Ugandan exiles who fled to Tanzania, Nyerere sent his troops into Uganda in 1979 to aid the rebels. This was also in retaliation for the occupation of a part of Tanzania by Amin's troops a year earlier. Although Amin was overthrown in 1979, the war dragged on for another two years before Tanzanian forces finally withdrew following the return to power of Milton Obote, the leader whom Amin had originally toppled. The conflict, which caused the death of 700 Tanzanian troops and the serious wounding of a further 500, drained Tanzania of $600 million in military costs.
Natural disasters in the 1960s and 1970s
Tanzania's financial problems were deepened in this period by a series of droughts and floods. These caused a fall in harvest yields made worse by the damage to the road and rail networks, which disrupted the distribution of dwindling food supplies. To cope with the crises, Tanzania had to appeal for international food aid. The total losses had to be met by borrowing $250 billion.
Faced with such a list of deficits, Nyerere's reaction was to cut expenditure which slowed down economic expansion. Ujamaa remained an ideal, which he continued to advocate in his public pronouncements, but in his remaining years as President he became much more realistic and accepted that his original objectives were unrealizable.
Tourism
An interesting development that went some way to off-setting the financial costs of the floods and droughts was the growth in tourism. The natural beauty of Tanzania and the splendour of its wildlife made tourism an obvious economic resource to exploit. By 1979, foreign visitors to the national parks, such as the Serengeti, numbered over 400,000, bringing the equivalent of $12 million into the country.
World History
