Tanzania Bank and IMF, and other donors

Tanzania is one of the
poorest countries in the world in terms of per capital income, which its
economy depends heavily on agriculture. Both
World Bank and IMF, and other donors have contributed funds to rehabilitate
Tanzania’s slow economic infrastructure and to ease poverty through Structural Adjustment
Programs (SAPs). Agriculture is still the most important part of Tanzania’s
economy so improving agriculture was the only way to assist Tanzanians because
most population of Tanzania are living in countryside where agriculture is
taking place thus many Tanzanians could benefit much from SAPs program through improvement
in agriculture (UKEssays, 2017). There was one of the core plans of SAPs in
1985 was to rise up the output of food and export crops, which was possible by
improving the market system for these crops and, also providing more incentives
for production. Nevertheless, the state governance failed to administered SAPs
measures, following this, the IMF and World Bank withdraw from supporting the
government and either other donor countries refused to give grants and loans,
again the country accomplishment shows to decline in the following years in
economic performance was owe to bad weather condition lead to the destruction
of people’s properties and crops as agriculture is one of the most important
sector of the national economy, it lead to the poor performance thus low gross
domestic product, not only agriculture was affected but also other economic
activities were terribly affected. In addition to improvement in agriculture imposed
by the IMF and World Bank was to transform the country economy, which is change
to free market economy together with privatization of public sector in
Tanzania, privatization lead to many benefits including, recovery of dead
industry increase national output of Tanzania experienced a lot of Economic
problems as the country were coming from the war with Uganda. Generally, the
world economy was fall down, trade liberalization was more likely an incentive
to attract many external and internal investors to take into consideration and
invest in Tanzania indeed the amount of investors increased and the national
output increased too, as well as trade liberalization lead to shifting of many
trade barriers such price and market reforms, tariffs, embargoes, and custom
duties. Trade liberalization in SAPs was guiding Tanzania and other developing
countries to the system of open market where the forces of demand and supply
are the only antecedent of price in the market, hence the government is not supposed
to interfere in any problem. Last but not least, throughout SAPs economic
recovery program that IMF and World Bank started among other measures to
renovate and rebuild the Tanzanian infrastructure through rehabilitation of the
remaining infrastructure in which were placed from the colonial government
because there were need for improving these infrastructures as they were in bad
conditions, including roads, railway, airports and harbors. The main importance
of infrastructure is for fostering the economic performance in the country
together with making the country more accessible in all regions. The purpose of
SAPs was to make Tanzania changing its economies from command economy to free
market economy that is privatization in place where private investors are
increasingly investing in the country thus it could be recovered from economic
crisis, mostly infrastructure is one of the ingredients to foster of the
national economy. These physical infrastructures were improved in the recent
years, Tanzania transport network have developed significantly. Any part of
Tanzania is now accessible without any matter that is the success of SAPs and
the Government at large because SAPs, cannot be able to run itself. Apart from
those possible advantages, SAPs through privatization of public entities to
private sector lead the government’s loss little control of the national
economy, which is the decision process about the price of goods and services
are left in the hands of the forces of demand and supply in market mechanism to
decide. One of the major weakness to leave the market to decide in which the
government have no power to decide on economic productions, even to control monopolies
and other market failure, in other words, it does not mean that the government
have no control but not as much as it had during the past times within its
sovereignty, this is evidence that Tanzania inflation is increasing every year
the government have failed to control this inflation.

Therefore, as explained through many strategic
plans of SAPs, it can be concluded that implementation through SAPs have
brought much to the development in internal economy where it is able to make
the country recovering from economy ill. Moreover, physical infrastructures in
Tanzania have also been rehabilitated under efficient plan of SAPs. On the
other hand, there were also negative impact during that phase, which was like a
grey zone in term of sovereignty because government has been lost totally
control in economy performances as well as removal of subsidies. 

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