From: barnhart@gagme.chi.il.us (Mr Aaron Barnhart)
Subject: IPS: TANZANIA: SOCIALISM ON THE SHELF AS
Originator: barnhart@gagme
Organization: Evanston, Illinois
Date: Fri, 28 Aug 1992 05:54:27 GMT

Area: Population
Title: TANZANIA: SOCIALISM ON THE SHELF AS PRIVATE BANKS RETURN


an inter press service feature

by paul chintowa

dar es salaam, aug 24 (ips) -- in a bid to attract private
capital inflows, tanzania has authorised foreign-owned banks to
re-establish their operations after 25 years of absence from the
east african country.

britain's standard chartered bank, one of foreign financial
houses nationalized in 1967 when tanzania went socialist, is the
first to make a comeback.

''we are happy to come back again'', the bank's managing
director, paul docherty, said friday when he was handed a
business licence by bank of tanzania governor gilman rutihinda.

the country's policy of socialism and self-reliance has been
quietly shelved as president ali hassan mwinyi strives to reform
the economy and put up a new platform for the ruling chama cha
mapinduzi party in the wake of multipartyism in tanzania.

under its ''arusha declaration'' of 1967, tanzania had
nationalized the commanding heights of the economy among which
were banks and insurance companies.

initially the state-run economy remained on a successful
course, with real gross domestic product (gdp) growing at
slightly less that five percent per annum while gross investment
rose to above 20 percent gdp.

this achievement, however, was short-lived. a combination of
external shocks, revolving around the oil crises, drought and
the break-up of the east african community which grouped kenya,
tanzania and uganda in a common market, put inordinate pressure
on the economy.

by 1982, the tanzanian economy was in serious crisis as per
capita gdp began to decline and the benefits of the impressive
achievements attained earlier in building the economic and
social infrastructure were substantially eroded.

tanzania's economic recovery programme has been under way
since 1986 and it embodies trade liberalisation among measures
intended to promote both domestic and foreign investment in the
country.

the removal of numerous price and other controls has been a
major objective of government in establishing a conducive
investment climate in tanzania. a law that opened the door to
private banking was passed by parliament last year. (more/ips)


tanzania: socialism (2)

under the law, private firms and individuals are free to open
commercial banks in tanzania, provided they are able to raise a
core capital of five million dollars.

prospective bankers are also required to give special
attention to rural financing since the country's economy is
basically agricultural. ''we expect new banks and finance
institutions to support activities in the agriculture sector'',
rutihinda said.

implementation of a wide range of liberalization measures is
believed to have helped to reverse tanzania's economic decline
but at the same time served to highlight the complex and
difficult process of reforming public enterprises.

with more than 400 parastatal enterprises operating in nearly
all economic and social sectors, tanzania is said to have the
largest number of state-owned ventures among african least
developed countries.

the ongoing restructuring and reform is aimed at reducing the
parastatal organisations to open up new opportunities for the
private sector.

those remaining are likely to be subjected to the rules of
the market and their monopolistic privileges significantly
diminished.

according to rutihinda, several foreign banks have applied to
operate in tanzania and their applications were being
considered.

commercial banking in the country has been dominated by
national bank of commerce, cooperative and rural development
bank (crdb), tanzania housing bank and tanzania postal bank --
all state-owned. government also owns tanzania investment bank.

the tanzanian public see a great relief in the comeback of
foreign banks as local ones have been running with
a characteristic inefficiency.

reacting to the return of standard chartered bank, crdb
managing director philip magani said: ''we are going to provide
quality, efficient and quick services to our customers''.
(end/ips/pc/ar/92)




-- 
Mr. Aaron Barnhart@gagme.chi.il.us -- posting from Evanston, Illinois
Newsgroups: soc.culture.african