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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 steps taken by the government since independence to solve the problems of economic crisis which had a far reaching impact on the masses. The majority of the population in this country is still living below the international poverty line, which is surviving on less than 1 USA dollar. The measures to solve the economic crisis were divided into two phases;-

A 1961 1966.(FIRST PHASE)

Under this phase, the government aimed at improving agriculture, communication and education based on economist model that included equal opportunity for all. These measures included the following;

(i) Socialism and self reliance; This is where the government took measures to reduce the salaries of government employees from the president down to normal levels. No civil servants, members of parliament or TANU office holders were supposed to engage in private business. This move aimed controlling corruption among politicians.

(ii) Targeted rural development; The government diverted resources from urban areas to rural development. This aimed at improving agriculture sector. The government grouped the population into Ujamaa villages in which the people will work together on communal land so that development can benefit the whole community and not a few individuals.

(iii) Administrative and education curriculum; There were changes in education in order to change from the colonial type to type of education which emphasized socialist ideology. The new values of cooperative basis were encouraged, it was recognized that development plans must be financed by local resources and not to depend on foreign assistance.

(iv) Nationalization of land; The government decided to nationalize land from the colonialists and distribute it to the people for economic development. This was one of the resolutions of the Arusha declaration where it passed that all major means of production should be in the hands of the local people. This is what led to the nationalization of all foreign banks and other private commercial and manufacturing companies.

v. Removal of head tax; The head tax was so unpopular among the majority of people in rural areas; it increased rather than reduce poverty in the villages. The head tax was inherited from colonialism.

B. 1967 1980s.(SECOND PHASE)

(i) Man power training; The government took deliberate measures to improve the labour resources through training in and outside the country. A skilled labour force was very crucial to realize economic development in the country.

(ii) Development of infrastructure; The government also took various measures to improve the transport system. A country would be conducive for investment if it has a good transport system. The government in collaboration with Zambia built the TAZARA railway and Kilimanjaro international airport in the 1970s, these measures also aimed at attracting foreign investment which would help to achieve development.

(iii) Expansion of agriculture; The agricultural sector is the main sector of economy thus the government took deliberate measures to improve agriculture. It introduced slogans like siasa na kilimo in 1972 to train farmers better methods of farming.

(iv) Establishment of parastatal bodies; The government also established parastatal bodies, such as Tanzania Railway Corporation. National Insurance Corporation and Tanzania electricity supply company (TANESCO) to offer services to the people.

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