The First Industrial Revolution (1750s - 1840s)

Economic development after independence

After Tanganyika gained independence on 9th December 1961, the country aimed to promote economic development through structured development plans. However, challenges such as dependence on foreign investors, inadequate infrastructure, and a lack of skilled manpower slowed progress.

Key development plans (1961–1981)

1. Three-Year Development Plan (1961–1964): Focused on foundational economic changes.
2. First Five-Year Development Plan (1964–1969): Promoted agricultural productivity, industrial growth, and education.
3. Second Five-Year Development Plan (1969–1974): Emphasized rural development but suffered due to drought and global economic challenges.
4. Third Five-Year Development Plan (1974–1981): Continued industrialization with the introduction of the Basic Industrial Strategy (1975).

Achievements of the development plans

1. Agricultural Development: Agricultural production increased significantly, aided by improved farming techniques, fertilizers, and mechanization.
2. Education Improvements: Literacy rates improved as schools were established and adult education programs expanded, producing a growing number of skilled Tanzanian workers.
3. Health Sector Expansion: Dispensaries, hospitals, and health centers were constructed, leading to improved life expectancy (from 35–40 years in 1964 to 40–41 years in 1967).
4. Industrial Growth: Establishment of industries such as textile mills and petroleum refineries reduced dependency on imports and created jobs.
5. Infrastructure Improvements: The construction of all-weather roads improved regional connectivity and transportation of goods.
6. Economic Growth: Gross Domestic Product (GDP) grew, though slower than projected, with growth rates of 5% during the First Plan and 4.8% during the Second Plan.

Challenges of economic development (1961–1981)

1. Shortage of Skilled Manpower: A lack of experienced personnel led to poor execution of projects and reliance on foreign experts.
2. Low Technology Levels: The use of traditional tools in agriculture and mining limited productivity and export revenues.
3. Financial Constraints: Decline in foreign aid due to strained diplomatic relations with countries like Britain and West Germany.
4. Global Economic Factors: The oil crisis of the 1970s and rising global prices affected Tanzania's economic growth.
5. Dependence on Cash Crops: Over-reliance on cash crops for foreign exchange made the economy vulnerable to price fluctuations.
6. Industrial Decline: Poor planning, maladministration, and overstaffing led to inefficiencies in industries like textiles, which performed poorly by the late 1970s.

The Arusha Declaration (1967)

Overview: Propagated by President Julius Nyerere, the Arusha Declaration was a pivotal policy to build a socialist and self-reliant Tanzania. It emphasized equality, justice, and public ownership of resources.

Key Principles:

1. Nationalization of major means of production (e.g., banks, plantations, industries).
2. Eradication of exploitation and promotion of collective rural production (Ujamaa).
3. Implementation of leadership ethics (e.g., leaders could not own rental houses or hold private company positions).

Economic Changes After the Declaration:

1. Nationalization: Assets like banks, industries, and plantations were nationalized, and public corporations such as the National Bank of Commerce and Tanzania Cotton Authority were established.
2. Industrial Growth: Import-substitution industries expanded, including those producing cement, cigarettes, and hand tools for farmers.
3. Public Ownership: Major resources and industries were collectively owned, fostering employment and equitable use of resources.

Impact and decline (1973–1981)

Despite initial successes, Tanzania faced setbacks:

1. Industrial Decline: Mismanagement and resource inefficiencies led to underperformance in industries like textiles.
2. Agricultural Challenges: Declining cash crop production and poor infrastructure hindered agricultural exports.
3. Economic Stagnation: Poor planning and the global economic downturn led to reduced industrial growth.