one can say that parastatal investment is now between 38% and
40% of the national total, reflecting the dominant role that they
play in the more dynamic sectors of the economy, and is likely to
become even more important in future.

In general parastatals invest much more than they save and rely
heavily on foreign finance. It has been estimated that between
1972 and 1975 parastatals might account for as much as 49% of
total GFCF. Of this amount only 16 % will be financed from their
own funds, 42% will come from Government transfers and 37 %
directly from overseas. But a good proportion of the transfers
from the Government will also originate overseas for on-leading
via the Government to parastatals. If this proportion is roughly
equal to the proportion of total Government finance originating
abroad (51%) then we can say that as much as 58% of total
parastatal investment between 1972 and 1975 will be foreign
financed.

Finally, to complete our thumb-nail sketch, the parastatals are
now the largest borrowing customers of the commercial bank ac-
counting for 60% of total credit outstanding. This pattern of in-
vestment financing, as we shall see, has several important im-
plications both for the way in which parastatals conduct thei
operations and for the possibility of their being effectively con-
trolled.

One half of our title — ‘the parastatals’ — being thus clarified it
can also be stressed at the outset that the full title of this essay,
‘the political economy of the parastatals,’ is somewhat misleading.
For in order to investigate such institutions meaningfully we must
really confront the larger reality of the Tanzania system as a
whole. There are some who would prefer, nonetheless, to discuss
the parastatals ‘in their own terms,’ but it is an underlying premise
of this article that any such attempt is almost invariably
misleading. The elements which comprise the totality of Tan-
zania’s socio-economic system are in fact the major determinants
of how the parastatals function. What is really at stake, therefore,
is a ‘political economy of Tanzania.’

Obviously, we cannot attempt to present a fully serviceable
political economy of Tanzania within the brief compass of this ar-
ticle. Our focus will remain centred on the parastatals themselves.
But the crucial relationships which link the parastatals to their
wider social, political and economic context will remain as

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