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How tenacious Mkapa toiled to get the economy moving again

Dar es Salaam. That President Benjamin Mkapa inherited public coffers that were virtually empty when he came into office in 1995 is an open secret.

With revenues of only Sh331 billion for the entire 1994/95 financial year, delayed salaries for civil servants were not uncommon, Mr Mkapa recalls in his autobiography titled My Life, My Purpose: A Tanzanian President Remembers.

With an inflation rate of 27.4 per cent, government employees found the going tough.

This prompted Mr Mkapa and his team to employ various strategies to get things going, the result of which is part of what Tanzanians can see today. It meant the new administration had to hit the ground running in December 1995.

With the approach of tackling the challenge from all fronts, locally and internationally, Mr Mkapa narrates how he personally engaged various presidents, heads of government and heads of international institutions in efforts to try and put the economy back on track.

Mr Mkapa personally held talks with the UK’s former Minister for Overseas Development and Africa, Ms Baroness Chalker.

He admits efforts to strike cordial working relationships with the World Bank (WB) and International Monetary Fund (IFM) were no walk in the park.

However, Mr Mkapa says there was no other option but to take the bull by the horns.

“It was not easy… because these two organisations were the bête noires to many Tanzanians, indeed Africans. Nevertheless, these working relationships were vital if I was going to get our economy on a stronger footing,” he says.

Aware that Tanzania was heavily indebted, Mr Mkapa moved quickly and held talks with the then WB president James Wolfensohn, and the then IMF managing director Horst Kohler.

In line with Tanzania’s economic diplomacy policy, Mr Mkapa secured the support of the United Kingdom, China, the Netherlands, Norway, Sweden, Denmark, Finland and Germany.

He notes, however, that during that period, there were some people back home who saw him as a “traitor” and who was collaborating with “enemies”.

“Though I am sure there were some Tanzanians who looked askance at me, saying ‘this man is collaborating with the enemies, the World Bank and IMF’.”

At a time when a number of development partners had agreed to grant debt relief to Tanzania, Mr Mkapa had one more bottleneck to overcome – winning the support of the United States.

He decided to personally engage then US President Bill Clinton and got his first opportunity during the United Nations General Assembly in September 1999.

“I explained to him that we had met the stipulations laid out by the World Bank and the IMF but when we attended the meeting of the Paris Club it was the USA that blocked us from obtaining the debt relief; why was this?”

Mr Clinton gave Mr Mkapa assurance of what would follow. With Mwalimu Nyerere receiving treatment in London, Mr Mkapa decided to deliver the message to him, telling him (Mwalimu) that finally, Tanzania has received US commitment on debt relief.

He writes that Mwalimu Nyerere was elated at the news.

These initiatives finally yielded positive results and in 2001, Tanzania was granted debt relief of $3 billion which reduced the country’s total external debt by 54 per cent. It also reduced the amount to be paid as interest on loans.

With sound finance management and concerted efforts to collect government revenues, Tanzania’s economy started picking up, with revenue collections for the 2005/06 financial year reaching Sh2.125 trillion.

Mr Mkapa left office at a time when the country had enough foreign exchange reserves to cover 5.3 months of the country’s import cover while inflation had dropped to single digits.