Countries of the World/COUNTRYS.BIN/dp/0365/03652.txt

Text File | 1991-06-25 | 25KB | 404 lines

$Unique_ID{COW03652}
$Pretitle{262}
$Title{Tanzania
Chapter 4C.   Industrial Productivity}
$Subtitle{}
$Author{Donald P. Whitaker}
$Affiliation{HQ, Department of the Army}
$Subject{tanzania
dar
percent
salaam
es
government
lake
private
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domestic}
$Date{1978}
$Log{}
Country:     Tanzania
Book:        Tanzania, A Country Study
Author:      Donald P. Whitaker
Affiliation: HQ, Department of the Army
Date:        1978

Chapter 4C.   Industrial Productivity

     The dominant position of the parastatal companies in manufacturing lent a
special significance to their performance. Both government representatives and
foreign observers noted in the mid-and late 1970s a relative inefficiency in
management, a gradual decline in productivity, and a wide underutilization of
productive capacity, which appeared to have increased from about the
mid-1970s. Management problems were due in considerable part to a shortage of
capable individuals for a wide range of positions, especially at the middle
level. Largely responsible for the decline in productivity were the lack of
incentives both for managerial staff and for the production work force. The
prices of parastatal products were set by the National Price Commission and
included a cost-plus factor. Coupled with product import and wage controls,
the result was a general disassociation of parastatal activities from market
forces and an accompanying lack of incentive for management to strive for
improved output.

     Productivity appears to have been seriously affected also by widespread
overmanning among the parastatals, which persisted despite government action
taken on occasion to reduce the work force. An example was the reduction in
1976 of the work force at the Wazo Hill cement plant. External factors,
including power outages and water shortages (accented in 1973 and 1974 by
droughts) as well as parts and materials shortages due to lack of foreign
exchange, have also affected plant utilization and overall production. Efforts
to raise productivity through a bonus system for laborers, of several years
standing, appeared to have been relatively ineffective because of a lack of
established production norms, and in the late 1970s the system was in disuse.
One result of the comparatively poor parastatal performance was the shortfall
in internally generated investment funds. President Nyerere noted in early
1977 that between 1967 and 1974 only one-fifth of new investment was financed
from the resources of the public corporations. That is, four-fifths of the
funds for parastatal investment programs came from foreign and domestic
borrowing, with concomitant added strain on the national treasury.

Internal Trade

     In early 1978 the institutions responsible for carrying on wholesale
trading were largely in the public sector, but much of the country's retail
trading activities remained in private hands. Government and TANU-sponsored
efforts had been under way since early 1976, however, to increase public
participation in the retail field. Wholesale distribution was chiefly carried
out by twenty parastatal regional trading companies, one in each of the
mainland's twenty regions. These companies obtained their merchandise either
from a group of parastatal importing companies that specialized in particular
commodity areas-the importers also engaged in the domestic distribution of
their imports and of similar local products-or directly from domestic
manufacturers (see The Handling of Foreign Trade, this ch.). Certain
parastatal corporations marketed their manufactures through their own
distribution systems. Others sold their products directly to regional farmers'
cooperative unions until the unions were dissolved in 1976.

     Changes and disruptions in the mechanism of retail trade that began in
early 1976 precluded a clear-cut depiction of the actual situation in this
sector at the end of 1977. Until 1976 retail trade throughout most of the
country was carried on by a large number of small, mostly privately owned
shops (maduka; sing., duka) that provided the neighborhood or locality with
essentials such as soap, cooking oil, salt, sugar, and the like. In February
1976 Prime Minister Rashidi Kawawa suddenly announced that all private
shops-in villages, on plantations, or operating in industrial or parastatal
establishments-were to close, and their place was to be taken by cooperative
stores. The move was declared to be another step toward ending all forms of
domestic exploitation.

     Within a short time "Operation Maduka," as it was labeled, had resulted
not only in shortages of essential items but also had created great
inconvenience for many people, as numerous shops closed and were replaced by
a much smaller number of cooperative stores. In May President Nyerere called
for a slowdown in the operation, blaming the excessive zeal of government and
TANU officials for the hardships caused. He cited as an example the official
closing of 100 stores in some areas where there was only one cooperative shop
to take their place. He stated that the movement was not a competition and
that the aim was to establish cooperative stores, not shutdown private ones.
Private shops, he said, would eventually close on their own when enough
well-run cooperative shops were in operation.

     The number of privately owned shops at the start of "Operation Maduka"
was unknown. In August the Office of the Prime Minister announced that as a
result of the movement general cooperative shops had increased from 300 to 879
and that similar shops run by villages had risen from 600 to 2,191. The prime
minister's office stated that there was still a long way to go because each of
the country's over 6,000 villages had need of its own cooperative store. At
the same time it was noted that the performance of the village shops was
unsatisfactory because of inexperience, shortage of capital, and inadequate
facilities to transport and store stock.

     Although the government appeared committed to eventual nationalization of
the retail trade, the pragmatic approach of President Nyerere was an evidence
in the denationalization of the retail meat business in Dar es Salaam in
August 1977. Private butcher shops in the city had been taken over in 1971 by
the parastatal Dar er Salaam Development Corporation. During the next two
years the corporation earned a profit but thereafter regularly showed losses.
The losses were explained in part as due to fixed selling prices for meat, but
there were also reports of theft, corruption, and general inefficiency of
operation. Whatever the cause, the continuing loss, accentuated by the local
shortage of meat, resulted in a government order to return the retail meat
trade to private operation.

Mining

     The decade from 1966 through 1975 was characterized in the mining sector
by a general stagnation in development and a gradual decline in the sector's
contribution to GDP-from 2.9 percent in 1966 to 1.3 percent in 1970 and to
about 0.6 percent in 1975, the latest year for which information was
available. The country has a variety of known mineral deposits or occurrences
that range from precious metals-diamonds (of both gem and industrial quality)
and colored gemstones-to iron, tin, copper, and other metallic mineral ores
and limestone, gypsum, kaolin, salt, soda ash, mica, coal, and natural gas.
Production, however, by world standards was small except for diamonds, in
which Tanzania was in either eighth or ninth place in the mid-1970s-diamonds
made up from 85 to 90 percent of the value of the country's mineral exports.

     Almost all diamonds came from the Mwadui deposit in Shinyanga Region. The
deposit has been worked since 1940 and is approaching the end of its estimated
resources; however, steps have been taken to delay the eventual closing of the
mine until the 1990s, as an economic measure, by including the processing of
lower grade ores that ordinarily would be passed over. The mine is operated by
Williamson Diamonds, associated with De Beers of London, which ow