IMF in Tanzania

by Chris Slosser

Z magazine, March 1998


On January 31, 1997 the Tanzanian government announced the release of 10,000 civil servants in accordance with conditions tied to a November 1996 IMF loan of U.S. $234 million. The loan was expected to be followed by about U. S. $ 1 billion to Tanzania from various donors by the end of 1997.

In return for the money (and what country could turn down such cash) Tanzania was forced to sell its fiscal soul. It has committed to liberalization and "economic order," fighting inflation and turning the budget into a surplus by, among others, slashing social spending.

Focusing on GDP and tenths of percentage points of budgetary growth has left out of any financial formula the country's people.

The public sector lay-off came after Tanzania had already handed out 65,000 pink slips since 1994. Another 70,000 jobs were declared redundant last February, leaving a rather eerie foreshadowing of things to come.

An already feeble health care system faces the knife. By 1992 Tanzania reduced its health budget from 7 percent in the 1970s to 6 percent. This 1 percent was too much to sustain services once offered for free. At Mount Meru Hospital, in Arusha, Tanzania's third largest city, two, sometimes three patients share beds to meet the bed shortage.

New user pay schemes mean patients pay for surgical gloves, blades, sutures, sterilizing liquids, etc. If patients can't afford sterilizing liquid, for example, medical procedures continue without it.

Patients who can't afford drugs don't bother. Some pay for as much as they can hoping that maybe half a dose will be a cure. Others forego the cost of a doctor's visit, diagnose themselves, and buy any drugs they figure they need directly from a local pharmacist.

Teachers at Arusha's government schools haven't been paid in seven months. After defaulting on rent payments many have been kicked out of their homes. Others don't bother going to classes. Classes of 40 kids remain unattended and untaught all day. A passing grade is now between 20 and 30 percent-students who weren't taught had no way of passing government exams; so the government made it easier to pass. Teachers who do show up make money by bribing students for extra help after school. Others earn their living selling tests and exams to students.

Students are starting to abandon the classroom. Kids aged seven sell peanuts, newspapers, candies-whatever they can get-on the streets. When asked why they're not in school, they cite the latest boost in school fees designed to off-set disappearing government funding. Many parents can't afford the fees when added to costs of books and uniforms so it's a different type of education, one of survival, for their kids.

Once proud, state-run post-secondary schools training future farmers throughout East Africa haven't had 1995 budgets approved by Tanzania's Ministry of Agriculture, which says it has no money. The schools run at less than half their enrollment capacity and offer a fraction of the curriculum when funded. Meanwhile, in the country's multi-million dollar flower industry, European owners receive World Bank "development" loans to meet start-up and operating costs. They enjoy a five year tax holiday designed, quite successfully, to woo foreign investors.

At the same time new taxes on Tanzania's poor appear everywhere. UMALE, an Arushan carpenters' cooperative, struggles to survive as taxes add 40 percent to the cost of their products. The carpenters flip a coin between pricing their wares far above any affordable level or attaching a price that doesn't cover costs.

Through it all Tanzania becomes "a success." In 1996 the country was ranked second poorest in the world. But already, by April 1997, the World Bank magnanimously bumped it up two notches to fourth poorest. That's development, World Bank/IMF style.


Chris Slosser is a journalist from Toronto, Canada.

IMF, World Bank, Structural Adjustment