suggests that many consumers, particularly in urban areas,
reduced their consumption because retail stores shifted to a cash-
only basis when they lost their credit facility with S.T.C.

One of the major consequences of S.T.C.’s pricing and credit ac-
tivities, and the shortages S.T.C. brought to the market, was to
contribute to a shift in relative prices and demands. Again, the ef-
fects of S.T.C. cannot be separated from other events effecting
prices and purchasing decisions. However, it is known that shor-
tages and the fear of shortages resulted in widespread stockpiling,
both by various S.T.C. branches and private wholesalers, sub-
whole-salers and retailers; that retail prices changed considerably,
particularly in supply-short items; and that the demand for various
consumer goods, such as meat, sugar, cooking oil and beer was
very erratic.

Conclusions

What emerges is a proxy of the structure of the entire Tan-
zanian economy. The neo-colonial economy has its income
generated mainly by peasant producers. Resources are siphoned
off by the bourgeois segment —the part in which the expensive
houses and buildings are found, for which the factories, for most
part, produce their output, in which most medical, water,
educational, power, transport, et al, investments have been made,
and whose benefits those with bureaucratic and much political
power receive. As long as all goes smoothly, the relationship
remains obscured, but when institutions begin to falter, the sub-
tleties of the relationships between the segments begins to emerge.
The failure of S.T.C. at the same time damaged the bourgeois sec-
tor and undermined the abilities of peasants and workers to even
maintain their relative position in the economy. The State Trading
Corporation did not succeed because of an unsuitable
organisational structure and set of management systems which it
received from McKinsey & Co. consultants. It also foundered
because key Corporation and Government policy decisions were
incorrect. The question arises, however, as to why the consultants
and policy makers made recommendations and took decisions
which led to the collapse. While it might be more suitable (or
closer to the truth) to take a conspiratorial view, in the sense that
their class interests were opposed to success for S.T.C., there is
another, attied approach which sheds more light on this particular
problem.

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