ABSTRACT
Until the Arusha Declaration, Tanzanian development policies encouraged extensive private investment and large financial contributions from abroad. The economy of newly independent Tanzania was dominated by a marginally productive agricultural sector, employing more than 80 percent of the work force and yet unable to generate enough surplus wealth to enable economic growth and diversification. Economic growth was largely confined to the small industrial sector dominated by Asians and foreigners, many of whom Nyerere considered exploitative of the African majority. Tanzania entered its 1978–1979 fiscal year with a balanced ledger, but one heavily subsidized by international finance. The economy’s international situation appeared scarcely less precarious in 1978 than its domestic circumstances. Despite significant improvements in the basic quality of life for most Tanzanians, the advance toward socialism, equality, and self-reliance had bogged down in unrealistic goals, lost incentives, and rising costs.
