On taking office President Mkapa had to move quickly to creating environments for entrepreneurs to flourish in Tanzania. More than half the 400 existing parastatal firms were privatised, interest and exchange rates were liberalised and an environment more conducive to foreign investment created (PBS Foundation undated).

Though tourism and the mining sector expanded rapidly the economy remained heavily dependent on agriculture. To facilitate economic growth and attract foreign investment the government invested heavily in infrastructure development. Inflation began to fall and growth rates increased steadily (Ewald 2002).

The country made great strides economically during the presidency of Mkapa overall. Economic growth increased steadily from 1.8% on average between 1991 and 1995 to 4% between 1996 and 2000 and then to 7% between 2001 and 2005 (IMF 2010a, 72; IMF 2010b). Similarly, inflation was brought down from an average of 26.9% to 12.5% and then to 4.5% over the same time periods (IMF 2010a, 76; IMF 2010b).

The turnabout in the economy after 1995 was the product of a process of reform that began with the tentative measures of the 1986 Economic Recovery programme that slowly accelerated until 1995 where after bolder measures followed one on the other. Initially prices were liberalised (including eventually the exchange rate) and progressively restrictions on economic activity were removed while the state withdrew steadily from active participation and intervention in the economy culminating in the adoption of strict fiscal and monetary discipline and more stringent oversight over the use of state resources (Nord et al 2009, 3; World Bank 2001, 10, 12). This process gradually and then more rapidly attracted foreign capital and donor assistance, improved export and state revenue earnings as well as earned the reduction of Tanzania's external debt burden under the HIPC initiative (Nord et al 2009, 3 ; World Bank 2001, 10, 14).

The government of President Mkapa early on realised that the pursuit of economic reform and the consequent higher levels of economic growth would be inadequate to meet the socio-economic developmental needs of the population. It laid out long-term poverty reduction goals in its 1997 National Poverty Eradication Strategy (NPES) and followed this with an expenditure framework that focused on priority areas and with a broad consultation of stakeholders, including civil society actors and members of the donor international community, that resulted in the adoption of a Poverty Reduction Strategy Paper in 2000 which embodied the consensus so reached (IMF & IDA 2000, 1,2). Between 2000 and 2006, national expenditure on health as a percentage of GDP rose from 3.9% to 6.4% and between 1999 and 2008 state expenditure on education rose from 2.2% of GDP to 6.8% (UN Statistics Division 2010a; UN Statistics Division 2010b). This led to establishment of Development vision 2025 and NSGRP.

Entrepreneurs will remember the late President Benjamin William Mkapa for establishing:

  1. 1. The Development Vision 2025
  2. 2. MKUKUTA: National Strategy for Growth and Reduction of Poverty (NSGRP)
These two plans widened the opportunity, skills, experience, capacity building, innovation, motivation and overall business development environments for entrepreneurs. We at Makutano ya Wajasiriamali wish all entrepreneurs to live the legacy of this our former president by continuing to improve what he started in the sector.

The Late Hon. President Benjamini William Mkapa
The Late Hon. President Benjamini William Mkapa, (United Republic of Tanzania; 1995-2005)