Nyerere, the most influential African writer and intellectual of his time, established himself as a hero and a prophet for the poor of the world, giving sermons as opposed to political speeches, preaching socialism.
His socialist experiment in Tanzania would stand as a beacon of hope in Africa. He was modest, lived simply, and unlike many of his counterparts, was not interested in personal shows of wealth. As it were, he had many admirers abroad and as a result Tanzania soon received more in foreign aid than any other African country.
The driving force of the state was Julius Nyerere alone: there was no popular movement, no military body, not a mass of peasants agitating socialism. The vision was his alone. For five years he took no action apart from his frequent sermons but in 1967, alarmed that a "new African elite" was emerging in Tanzania, began operating against the perceived threat with rapid speed.
Donor pressure was to be minimized to ensure Tanzanian independence. During the (in)famous Arusha Declaration, Nyerere announced mass nationalization. Yet there were no detailed plans, no cabinet meetings, no legal preparations.
In two fell sweeps almost everything worth anything was nationalized, the operation victimizing primarily the wealthy Asian community. Nyerere's code stipulated that all senior party and government officials had to be from the peasant or working class. "Some believed they could develop by having a middle class" he intoned, but "not in Tanzania. We shall be a nation of equals".
Next, Nyerere proposed establishment of self-sufficient socialist village communities as the basis of rural development. The scattered rural population was to be gathered in larger, communal units, ensuring easier access to technology, schools, medicine and water.
But progress was slow. Peasants living near poverty balked at giving away the relative safety of their holdings and finally most of the new communal units were established merely to ensure government aid. After insisting joining communal units had to be voluntary, by 1973 Nyerere announced a compulsory resettlement of the rural population. Nyerere scolded the population for "being lazy in their socialist aspirations".
During the next four years 11 million people were forcibly relocated. Despite Nyerere's insistence that the relocation was voluntary, reports tell otherwise. The ruling socialist party, TANU, employed force and violence at will, mercilessly harassing all who refused. The police, army, a national service and a militia were mobilized to move the population. Houses were turned uninhabitable by torching or kicking holes in the walls, and tearing off doors, and windows. Millions of people were moved overnight only to find themselves in an empty wasteland they were expected to turn into villages and fields.
As a result food production collapsed, compounded by drought. The villagisation programme catastrophically disrupted the whole nation. Famine loomed. Foreign reserves exhausted, in 1975 the government had to be rescued by grants and loans arranged by the IMF, and the World Bank, and by more than 200 000 tons of food aid. By 1979, 90% of the peasants had been located to communal farms but produced only 5% of the agricultural output.
Other aspects of the natiolisation failed similarly.
The multitude of state owned corporations ran on debt, were incompetently managed, overstaffed and inefficient. State banks, state shops, state marketing boards, state industries which all existed in the hundreds, were ran by bureaucrats operating under a system of patronage instead of businessmen: workers came to regard their jobs as guaranteed by the socialist state. By the 80s foreign debt was soaring, trade deficit widening. National output between 1977 and 1982 declined by one third. Factories and farms could not afford spare parts. Rising oil prices caused havoc. Basic commodities ran out.
Despite all these difficulties Nyerere held on to his socialist system, dismissing the possibility that his strategy might be at fault. His one party system stifled all opposition, the press was muzzled, party committees holding power were intolerant of change for fear of losing their benefits. By 1982 Nyerere admitted Tanzania faced "very real" problems but concluded a worse evil, that of capitalism and the birth of a new rich elite, had been avoided.
What Nyerere did achieve were major steps forward in education, health care and the social system: but without foreign aid, of which three billion was received in the 70s and which reached 600 million annually by 1982, Tanzania would have plunged. His achievement was to persuade foreign sponsors to continue their programs of aid, not of running a successful African social state.
The 80s in general became known as "the lost decade" of Africa, so deep was the economic decline of the continent, not only in Tanzania. By the mid 80s most of Africa was as poor, or poorer, then at the time of independence. At every level, governments were losing their capability to function. Salaries of civil servants eroded dramatically, draining what honesty and morale remained: for example in Tanzania the real buying power of the civil service dropped by 90% between 1969 and 1985. Brain drain reached massive proportions. Bereft of expertise, much of Africa suffered a collapse in the quality of governmental civil services which become renowned for absenteeism, corruption, and low morale, incapable of performing even basic tasks (in 1995 it was calculated in twenty low-income African countries, that half had 20 or fewer qualified accountants in the whole public sector). In Tanzania, much like everywhere else, unofficial parallel markets outside of government regulation were used for survival. Two thirds of the agricultural produce was sold in this manner.
Unable to raise funds from local sources and shunned by commercial banks abroad, governments were forced to turn to Western donor organizations, who in effect became the bankers for Africa.
The IMF and the World Bank cooked up a plan of economic reforms. In the 60s Western development economists had encouraged state motored progress while dismissing markets, in the 80s, they turned to the private sector and held the state as the primary cause of failure. IMF and World Bank required cuts in the bloated bureaucracies, deregulating prices, selling or closing state corporations, raising the price of agriculture commodities, freeing foreign investment, regulating budget deficits and reduced public borrowing and turning to investing. This all was, of course, opposed. The systems of patronage and regulation by the government were the primary tools of power. The ability of the elite to reward relatives, tribal kinsmen and political supporters by lucrative positions, contracts, bureaucratic jobs and other possibilities of gain were primary political assets.
The elites were basically faced with losing all their perks. Furthermore, public instead of private enterprise was a symbol of national sovereignty even if they performed catastrophically (but without options, most leaders had to accept the reform policies and 200 billion more in aid flowed into Africa during the 80s and 90s).
Despite all this Julius Nyerere emerged as a champion against the new requirements and would not budge until his retirement in 1985 when he became the sixth African leader to relinquish power voluntarily, of some 150 heads of state seen during African independence.
The former interior minister and vice president Ali Hassan Mwinyi or "Anything Goes" succeeded Nyerere, a compromise choice from within the CCM (ex. TANU) party. His government was quick to abandon the socialist strategy, introduce reforms and took austerity measures, achieving a good status with the donors. Yet under his leadership corruption was asvrampant as ever and inflation severe. His compliance with the donors (to ensure continuing aid, nothing more) succeeded in introducing some steps towards a more liberal economy, and multi-party politics were introduced in -92 during his second term.
Two parliamentary by-elections (won by CCM) in early 1994 were the first-ever multiparty elections in Tanzanian history.
Today the liberalization of the economy has gone further. The GDP of Tanzania is rising at a 4% yearly rate. It is still far too low to lift the average Tanzanian out of poverty, and the economy is still supported by foreign donors.
And even though debts worth $6 billion have recently been canceled, foreign debt eats 40% of government expenditure.
