These dirigiste and utopian policies bring less and less the expected results. The first oil shock of 1973 greatly darkens the country’s economic outlook.
Manufacturing and agricultural production are declining, the economy’s planning by the administration is inefficient. Politically, the parties (Nyerere TANU and ASP) come together and merge in 1977 to form the Chama cha Mapinduzi (CCM), that is to say the party of the Revolution4. Despite the economic difficulties, the country is at peace and receives many refugees from neighboring countries at war or fleeing the regime of Amin Dada in Uganda. Nyerere denies that the Africanization policy of the administration favors only Tanzanians and allows access to public empois to foreigners. Many also obtain Tanzanian citizenship, including white refugees6.
Tanzania’s relations with its African neighbors (particularly those in the north, Uganda and Kenya) are deteriorating over the years. These relations were initially good, however, since these three countries formed in 1967 the East African Community (East African Community) with the aim of eventually forming a common economic market. The first cooperation aims to standardize foreign exchange and currency control policies.But Kenya, close to Western countries, is moving further and further away from Tanzania, and the border between these two countries is even closed from 1977 to 1983. In Uganda, Idi Amin Dada, which feeds ambitions of territorial expansions , reproaches his Tanzanian neighbor to host opponents to his regime. Uganda attacks Tanzania at the end of 1978 and invades the area around Lake Victoria.
Tanzanians, with the help of Chinese military equipment and Ugandan exiles, succeed after several months of effort and at the cost of heavy casualties, to take back the lost territories, chasing Idi Amin Dada from power13. Tanzanian soldiers even occupy Uganda for almost two years. This unwanted war is expensive, about $ 500 million; and in the early 1980s, with no real industry, with an unproductive agricultural sector, Tanzania is one of the poorest countries in the world.As the country sinks into failure5, Nyerere begins to shift its policy of intervention since the mid-1960s. With the increasing involvement of the World Bank and the IMF, financial incentives for collectivist production are partly redirected towards investment for large state farms and for road infrastructure. In 1984, the possibility of private ownership of the means of production appears and society is, very gradually, liberalized.In 1985, Nyerere chose, contrary to the practice of most other African heads of state, to withdraw from politics after having retained power for 21 years.
It is Ali Hassan Mwinyi, then president of Zanzibar since 1980, who takes his succession. Despite the largely negative results of its economic development policy, Nyerere retained the esteem of many Tanzanians and part of the international community until his death on October 14, 1999. He is indeed credited with having laid the foundations for a multi-ethnic democratic state.