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INTRODUCTION

A state control economy is a system where the government, rather than the free market, determines what goods should be produced, how much should be produced, and the price at which the goods are offered for sale.A command economy is when government central planners own or control the means of production, and determine the distribution of output.It also determines investments and incomes.The political and economic landscape of Tanzania changed dramatically in 1967. This was a result of a poli￾tical decision that gave birth to Arusha Declaration that was proclaimed in this year. This was a blue print thatdeclared that Tanzania would be following Ujamaa (This is a kind of African socialism) policy. The policy impliedthat the country would be following socialist oriented eco￾nomic and political policies. The capitalist, private sector market-led economy that was inherited from the colonialpower at independence was replaced by state owned,centrally planned and controlled economy. All the major means of production in the country (industries, planta￾ions, commerce, mines etc) were nationalized and put into government hands.Kaiser (1996)& Ngowi (2002).

Economic development is the growth of the standard of living of a nations people from a low-income (poor) economy to a high-income (rich) economy.When the local quality of life is improved, there is more economic development.When social scientists study economic development, they look at a lot of things. They want to know about the way economic development is discussed by historians. They also want to know how development is happening today. They may want to know why people invest more money in some places than in others. They also want to know why people are better at making things to sell in some countries rather than others.Ngowi HP (2002).

THE FOLLOWING ARE THE IMPACTS OF STATE CONTROLLED ECONOMY

       State influenced development of agriculture,The process of structural transformation, whereby low‐income societies with a heavy focus on agriculture transition to become high‐income societies with a smaller but more productive agricultural sector, is widely found to occur alongside (or follow from) agricultural transformation. Such transformation is generally characterized by agricultural intensification (the adoption of improved seed and other modern inputs), greater participation in agricultural factor markets, a shift toward higher‐income crops and animal products, a greater commercial orientation of farms, and increased integration of farm and off‐farm stages of the agri‐food system. Labour productivity rises both within and beyond agriculture as labour shifts away from farming toward higher‐return sectors. Randa J (1999.

     State established some industries in the country,Examples   KARIBU TEXTILES MILLS LTD DAR ES SALAAM,KILIMANJARO TEXTILES MILLS LTD ARUSHA,MASUMIN TEXTILES Songea, RUVUMA,MBEYA TEXTILES MILLS MBEYA MORCO TEXTILES LIMITED DAR ES SALAAM And processing industries in Tanga,mtwara,morogoro,dar es salaam which introduced to ensure that agriculture has been improved.Examples Since the independence of Tanzania in 1961, it has invested heavily in textile industry, so that it could satisfy the demand of the market in terms of clothes and cotton growing in Tanzania. In the 1960s and 1970s, Tanzania was able to meet the demand of the market in terms of clothes. The industries produce adequate clothes and materials for making clothes. Furthermore, the industries were of the major employers and contributor to GDP. Zuku A (2002),Ngowi HP (2002).

         Led to the creation of epployment opportunities in diffrent public sectors.Exanples from 1967 to 1980s industries employed about 25% of the working force and contributed 25% of GDP in manufacturing sector . After independence, Tanzania adopted a centralised planning system in mid 1960s which survived for about 30. The centralised planning system, among other things, was concerned about the wellbeing of workers including restricting the employer’s right tohire and fire employees. Taking the example of remuneration, the independence Government provided adequate salaries which could sustain not only the.

     State controlled economy led to the scacity of product and services (high demand but low production and consuption.state was unable to saticify needs of the community since the fact that They were typically characterized by inade￾quate managerial and technical skills; embezzlement;capacity under-utilization; reliance on government subsi￾dies; non-payment of taxes; over-employing; protected from imports; and monopolistic in nature. As a result they became loss-making entities that depended on govern￾ment subsidies for their survival. As public enterprises,they did not pay tax to their owner either. It is not sur￾prising therefore that most of these came to a virtual verge of collapse. They became heavily indebted andemployees were now and then sent into long unpaid leaves.Ngowi (2007)

          Nationalization of all major  means of production within the country.All the major means of production in the country (industries, planta￾ions, commerce, mines etc) were nationalized and put into government hands. The state became the major owner, controller and manager of the state owned enterprises .These are parastatals that were formed following nationalization of private property.

      State contolled economy did not give any incentive or opportunity to theprivate sector enterprises. Private sector entrepreneurs were looked upon as exploiters and “enemies of thestate”. Given the acknowledged roles of the private as opposed to public sector in economic development process, this epoch can be said to have been a lost period inTanzania’s economic development process. The superiority of the private sector over the public sector in theeconomic development process lies mainly on the former’s greater efficiency, effectiveness, vibrancy, dynamism, innovativeness, flexibility and profit orientation.See details in, among others, Ngowi (2006)

 

      Qualitative and quantitative low because the main tool of production was the hand hoe. Poor transport system. Post colonial state inherited a poor transport system, most of the roads and railways are still concentrated in production areas, with this type of transport system, and it was very difficult to attainreal development. Lonsdale J (1968).

 

State Controlled  prices, exchange rate, interest rate, importsand exports added to the already hostile business and investment climate, according to Levin (2001),during the period of Arusha Declaration per capita incomes grew by 0.7% per year. This was led by the public administration sector with a sizeable contributionfrom agriculture and manufacturing. Exports stagnated due to the policy environment that was hostile for exports.Government had monopoly on marketing of goods and services. Inefficiencies drove down producer prices and there was high effective protection of the import-sub￾stituting industrial sector. Ngowi HP (2005)

 

 

 

 

 

 

 

 

 

 

 

 

 

REFFERENCES

Lonsdale J (1968). The Tanzania Experiment. African Affairs. 67(269):      Oxford University Press.

Muganda(1988) Tanzania’s Economic Reforms and Lessons  Learned. Paper Presented at the Scaling Up Poverty Reduction:

Ngowi HP (2007). Foreign Direct Investments (FDIs): Theories       Practices and Lessons in Tanzania. Unpublished book manuscript.

Ngowi HP (2005). Institutional Reforms to Attract Foreign Dir Investments (FDIs) as a Strategy         For Economic Growth: What HasTanzania Done?” In Globalization, Technology, and Sustainable

Ngowi HP (2002). The Role of Foreign Direct Investments (FDIs) IHost Economies: A Focus on Tanzania. Unpublished, All But Disser￾tation Thesis. Norwegian School of Economics and Business Administration.

Randa J (1999). Economic Reform and the Stability of the Demand forMoney in Tanzania. J. Afr. Econ, (2nd Ed). Oxford University Press

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