Independence refers to the total liberation of man from poverty, ignorance, disease, exploitation and oppression. Such liberation can be achieved if African political systems can enable their people to plan their economic development and attain prosperity. In 1970s and 1980s independence many African states faced economic crisis whereby they failed to provide basic necessities to their people.
During this time, foreign debt and drought were the main factors that hindered economic development. Tanzania was also hit by the economic crisis of 1970s. There were various factors that contributed to this crisis in Tanzania as follows;
1. Long drought season; There was a prolonged drought in Tanzania especially between 1981 and 1984. This droughthit the agricultural sector which was the main sector of the economy. There was a sharp fall in agricultural production which affected the revenue earnings of the country since it depended on the export of agricultural products.
2. The oil crisis of 1976; The oil crisis of 1976 was the major factor that contributed to the economic crisis in Tanzania. There was an increase in oil prices which increased the costs of production hence depleting the limited resources of the country. The resources spent on purchasing oil could have been used to finance other sectors of the economy.
3. The war against Idd Amin; The war against Idd Amin is one of the factors that played a great role in causing the economic crisis in Tanzania. There was a full scale war in 1978 between Tanzania and Uganda, where by Tanzania spent a lot of resources financing the war in which resources would have been used to finance the economy. After the war the economy of Tanzania had been shattered.
4. The collapse of east African community in 1977; The collapse of East African community in 1977 worsens the economic crisis in Tanzania. The special treatment given to goods from Tanzania in the form of loan, taxes was now removed. There was absence of secure market for Tanzanian goods; all these factors had a role to play in causing the economic crisis in the country.
5. Nationalization of parastatal bodies; The introduction of the Arusha declaration forced the government to nationalize parastatal bodies. Various enterprises were put under government control which in most cases failed to effectively administer the enterprises hence leading to their collapse.
6. Misuse of public office; The misuse of public office was one of the factors that have hindered development in Tanzania. Government officials have misused public funds hence the intended budget does not reach the required sectors of the economy.