THE POLITICAL ECONOMY OF THE
PARASTATALS*

John Loxley and John S. Saul

The term ‘parastatals’ is generally used to refer to those govern-
mental organisations which fall outside the main lines of the
departmental and ministerial hierarchies and which have, in con-
sequence, some measure of quasiautonomy in their day-to-day ac-
tivities (though of course all are ultimately tied into the centralised
decision making process). Moreover, all of them function
primarily in spheres of active economic endeavour — production,
commerce, services. Using the definition broadly, we should
therefore want to include such institutions as N.D.C., NAFCO,
T.T.C., and subsidiaries, N.B.C., Bank of Tanzania, N.I.C,,
TAZARA, within it.

What of the economic significance of these institutions? While
it can be said with certainty that the parastatal sector has been
growing rapidly since the Arusha Declaration and accompanying
nationalisation measures of 1967, it is a reflection of the lingering
colonial bias in the compilation of official statistics that we are not
yet able to state with any precision how important this sector is in
the national economy. Recent estimates suggest, however, that
parastatals are extremely important in certain key growth sectors
but of only moderate importance in terms of contribution to total
monetary GDP and as employers of labour. They are above all
else important as generators and users of the national surplus, and

* This is a revised version of a paper presented to the Law Faculty at the Univer-
sity of Dar es Salaam on March 3rd 1972 when the authors were respectively
Senior Lecturer in Economics and Senior Lecturer in Political Science.