S.T.C was expected to gradually monopolise the importation and
wholesaling of all products confined to it (about 40 per cent of
1969 imports by value). S.T.C. was to open regional offices in
each of the main regional towns and district offices in the main
district towns. The regional office would place orders and act as
the main stocking point for the entire region. The plan was that
once a presence was established in a region (and districts within)
the product divisions in Dar es Salaam would only sell at
wholesale prices to the S.T.C. branches. Since retailers would not
be able to obtain goods at lower rates from private wholesalers or
sub-wholesalers than from S.T.C. they would only deal with the
latter and the former would go out of business.'® At the product
division level effective control over the importation and wholesale
of a line was to be accomplished, depending upon the product
line, through: (1) capacity build-up, i.e. the creation of a new unit;
(2) the purchase of an existing wholesale corporation (as in the
case of hardware); and (3) joint ventures (as in the case of certain
machines). The capital costs for this entire programme, including
the buying of existing firms, would have been about Shs. 42
million.!! Compared to other large ventures in Tanzania, this
programme was cheap indeed.

On the other side, S.T.C.’s effect on the economy was spec-
tacular. With over 3,000 employees, the Corporation was the
largest single employer in the country. As importer of over 30 per
cent, by value, of the country’s imports, its role as a user of
foreign exchange was of major importance. In 1970, for example,
without prior discussion with Government, S.T.C. shifted to
paying for nearly all its imports upon receipt (i.e. by sight draft).
Owing to the fact that it had been receiving normal commercial
credit (and there were no problems in meeting its debts at that
time) of 30—90 days, the change eliminated a source of short-
term credit; this cost the country between Shs. 20/ = to Shs.
30/ = million in foreign exchange.'? And since S.T.C. had no
clear view of its stocks or planned orders and since the accounting
system did not differentiate between local and imported purchases,
it was not possible for the Ministry of Economic Affairs and
Development Planning to reasonably forecast S.T.C. imports
when drawing up the Foreign Exchange Plan; and this was no
small hole.

S.T.C.’s position as a borrower of loanable funds was also of

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