Mission to improve Zanzibar’s economy not yet accomplished

Zanzibar. Failure by the Revolutionary Council to come up with sustainable plans to withstand shocks of the changes has made the Zanzibar economy to slump over time.

This observation was made by a renowned Zanzibar economist, Dr Mohammed Hafidhi, during an interview with The Citizen on Saturday on Zanzibar’s Revolution 50th anniversary to be marked here tomorrow.

Dr Hafidhi, who also serves as the chairperson of Angoza, a network of Zanzibar non-governmental organisations, noted that the agenda of ensuring that Zanzibar’s economy was placed in the hands of the people of Zanzibar did not succeed over time due to post-revolution mistrust among politicians and experts in various sectors, notably the economy.

One of the main agenda of the revolution was to improve the people of Zanzibar’s economic wellbeing and ensure that they own the economy.

Dr Hafidhi noted, however, that there were short-lived improvements on people’s lives and the economy due to a number of factors. First, he pointed out that at the time of the revolution in 1964, the population was not large. The income from cloves was also high because the crop sold at high price in the world market. This enabled the Treasury to have ample reserves, which were used to finance social services.

This condition enabled the government to roll out its plans to provide Zanzibar citizens with housing schemes,free health, education and water services. The government even distributed pieces of land (3 acres) to each family.

But the problem started with this free land scheme. Dr Hafidhi noted that because the people, who were given land were not prepared, they soon found out that they could do very little on the government land, as they had neither the capital nor skills to engage in modernised agriculture. He noted that after some time production from land started to decrease.

“The size of the land distributed was small and second, for people who were given land, it was like a present and there were no plans to assist them to exploit it profitably. As a result, after some time people sold their land on which they practised subsistence farming,” he said adding:

“Therefore, we can sum up that in the early days, the revolution managed to meet its targets, but as time went by the plans were not sustainable. This gives us a lesson that good intentions alone are not enough. We need sustainable plans to ensure the targets of the good intentions are realised.”

When asked why the government of the day had failed to have sustainable plans, Dr Hafidhi, who also doubles as a board member of the Peoples Bank of Zanzibar (PBZ), said mistrust among politicians and rulers, which occurred immediately after the revolution, was the main cause. He said due to this mistrust, there was no proper advice to the rulers, who, for some reasons, decided to sideline the experts.

Elaborating further, he said many experts belonged to the group which was overthrown on January 12, 1964 and the new leaders looked upon them suspiciously. He explained that most of the leaders in the Afro-Shirazi Party (ASP), which took over the country’s leadership at the time, had no proper economic and planning strategies that could lead to effective management of the economy.

He said this situation also forced many experts to flee because they were seen by the new government as a threat.

“But, you can’t totally judge that doing so (sidelining the experts) had a negative impact because no one was sure of what would have happened if the planners in the old government were trusted,” he said.

According to Dr Hafidhi, who is the ZNCCIA board member, politics dominated what was going on during those days and expertise was relegated to the back burner. “That is why you will notice that many people, who were appointed to various leadership posts, were mainly politicians even for the posts which needed experts,” he said.

Did the situation persist?

This situation persisted for a long time in Zanzibar. It worsened when political pluralism was reintroduced in the early 1990s. During that time, public opinion was judged politically even if the people were speaking purely from an academic point of view.

But, over time, many experts were trained, most of them abroad, by the ruling class. This enabled the government to have an intellectual backup for its plans. Yet, political animosity placed experts in a precarious state as their opinions were judged politically.

“It reached a point where when an expert wanted to be in the leaders’ good books he was supposed to speak what the leaders wanted to hear. Experts were hesitant and worrisome to state things as they were because sometimes doing that amounted to speaking what the opposition was advocating and that would not please the rulers,” he said.

He noted that this situation made some experts start to act like politicians. “You will note, for instance, that experts fear to give their expert opinion on a lot of issues fearing that if they decide to be honest they will be taken as supporters of the opposition. Therefore, they decide to remain quiet or say what the politicians wanted to hear,” he stressed.

He said things had changed with the introduction of the Government of National Unity (GNU) system which had reduced political tensions and animosity.

“Fortunately, Zanzibar now has many experts most of who were trained abroad like in Russia, Bulgaria, Yugoslavia and Poland to name, but a few. Our University of Dar es Salaam has also trained a number of experts,” he said.

Dr Hafidhi, who is also the chairperson of the Vocational Training Authority is pleased that Zanzibar’s economy has started to show positive signs. His opinion is affirmed by a recent report by the Bank of Tanzania (BoT), which shows that Zanzibar’s economy was better in 2012 than in 2011.

According to the report, the economy of Zanzibar was generally resilient to external shocks, as real gross domestic product (GDP) increased by 7 per cent in 2012, up from 6.7 per cent attained in 2011.

“This was mainly associated with growth in the industrial and services sectors, the major growth driving sectors of the economy,” notes the BoT report. The report also shows that the GDP per capita increased by 4.5 per cent from Sh960,000 recorded in 2011 to Sh1,003,000 during the year under review.

Dr Hafidhi said cloves and tourism continued to be the backbone of the Zanzibar economy, but pointed out that the government had not done enough to ensure the two sectors were given the attention they deserve.

Dr Hafidhi believes the two sectors can still be used to drive Zanzibar’s economy if the government decides to take them seriously. He noted, for instance, that although cloves were the main crop on the Isles, there was a specialised research institute, which had been established to deal with the development and advancement of the money minting crop.

He said as long as cloves and tourism continue to be the backbone of Zanzibar’s economy, the government should think of establishing specialised agencies to deal with research on these two issues.

“The government now manages to pay farmers handsomely because it also gets enough from the export of the crop after the tsunami, which affected cloves in Singapore,” he noted.

He stressed that each country, which is serious in building its economy, had developed a research institution for anything, which is regarded as the mainstay of the economy be it oil, coffee, tea or any other commodity and it is amazing that Zanzibar has not done so.

He said it was surprising that farmers were using the same seeds, which their grandfathers used during the 1964 revolution because there was no research institution to come up with improved seeds. He also said due to lack of research the government had continued to export raw cloves.

“My suggestion is that from the money we get from cloves now we should set aside some funds for conducting research. We also need to research into value addition. This does not mean that the government should establish processing factories. There are investors with money and all they need is a conducive investment environment,” he said.

Dr Hafidhi noted that even if the price of cloves tumbles in the world market after stabilisation of production in Singapore, if there were value addition factories in the country, the crop would not be affected as the products might not be enough to sustain local market needs.

On tourism, he said the government should research on what type of tourism best fits the Zanzibar situation. He said due to a cultural background, which has its basis on Islam teachings, many Zanzibaris were not fond of the kind of tourism currently practised in the country.

But, Dr Hafidhi noted that the government erred from the word go as investments in tourism were welcomed without proper preparation including infrastructure and preparations of the Zanzibar people.

“Even many buildings which were turned into hotels were not built for that purpose, they were only modified.

There was no special strategy on what kind of tourism we wanted,” he said. He explained that even the road to Kiwengwa, one of the major areas, which holds prominent tourists hotels, was built in 1994 when there was an international forum before it was extended to Pwani Mchangani.

“We invited investors in this area without paying attention to our cultural requirements. It was not until people started to complain that the government came up with guidelines on what should be done to safeguard our local culture by issuing directives, for instance, what should be observed during Ramadhan,” he noted.

What should be done?

Dr Hafidhi said there was a need to ensure local entrepreneurs were prepared to boost tourism. He noted that small and medium entrepreneurs (SMEs) should be trained on how to produce quality goods, which meet tourism needs.

He said there was also a need for the government to establish or promote the establishment of a bank, which would specifically cater for SMEs.

Finally, Dr Hafidhi said there was a need to help the private sector cope with changing economic trends.

“If you look at the private sector, it has been there for a long time, but the government is doing everything from export to import. Therefore, the private sector was dealing with only minor local issues.

After doors were opened, the private sector found itself not competent enough to deal with the situation. We need the private sector development policy, which will guide it to grow and do away with the prevailing situation where the private sector has been beating about the bush,” he stressed.