From Goatherd to Governor. The Autobiography of Edwin Mtei: The Autobiography of Edwin Mtei

Chapter 12 - The Arusha Declaration and Birth of the Community

106 Chapter 12 The Arusha Declaration and Birth of the Community As President Nyerere was making his speech to launch the Bank of Tanzania on 14 June 1966, negotiations with his colleagues in Kenya and Uganda were advancing to devise a formula for continuing with the East African Common Market and other common services in an environment of different currencies circulating in these countries. Very soon after the Bank was launched, a high-powered Commission, composed of Cabinet Ministers from the three countries under the Chairmanship of a prominent Danish economist, Professor Kjeldt Philip, was set up. ThePhilipCommission’sTermsofReferencewere,inanutshell, to devise means by which the East African Common Market and East African Common Services could be preserved and operated efficiently for the benefit of all the partners. The Commission was to bear in mind the existence of different currencies circulating in the partner states. The Commission was expected to complete its task by the beginning of the following financial year, namely July 1967. Whilst the Philip Commission was in session and possibly drafting parts of its Report, another event, which was to impact seriously on my career and those of most Tanzanians, took place. The Arusha Declaration was drafted by the National Executive Committee (NEC) of the Tanganyika African National Union (TANU) and promulgated by President Julius K. Nyerere on 5 February 1967. I had actually been invited as an observer to the NEC meeting in Arusha, in my capacity as Governor of the Bank of Tanzania. Like all observers, I sat at the back of the conference hall, but I was taking copious notes and listening very attentively to all the speakers and following all the resolutions. Towards the end of the NEC meting, as we were giving a standing ovation as the President and his entourage were leaving for the lunch break, the President noticed me, as I was in the gangway in the first seat in my row. He 107 paused, patted me on my shoulder and said quietly “Governor, I am going to ask you to contribute when we come back this afternoon”. I replied, “I shall be very grateful, Mwalimu”. I had never had the chance to address such an élite group of the political power-wielders of Tanzania. In the excitement, I could not enjoy my lunch and only managed a piece of sandwich, a samosa and orange juice. However, by the time the President gave me the opportunity to speak that afternoon, I had made up my mind what I to say and had written a few notes. I decided to be very brief. I stated that it was a privilege and honour for me to contribute, adding that I fully appreciated NEC’s concern regarding ownership of the pillars of the economy, its control and guidence. But I said I wanted to use that opportunity to highlight the apparent loss of confidence that the NEC Meeting had engendered, and the flight of capital that was currently taking place. I dramatised this by asserting that as we were sitting there in that hall, East African Airways aeroplanes were flying overhead carrying tonnes of Bank of Tanzania notes for banking abroad. Under international agreement, we had an obligation to redeem them by remitting our meagre foreign exchange. This was true: that morning I had been informed over the telephone by my staff in Dar es Salaam that the Central Bank of Kenya did not even have to count the notes being airlifted to Nairobi because they were still in the manufacturers’ cellophane packages of one million shillings. I explained to the NEC that the immediate task before the Government was to arrest this situation and, if possible, stop it altogether. Otherwise, we would soon be bankrupt as a nation, unable to implement the decisions we were making. The result of this was that immediately after that session the President asked Hon. Jamal, the Minister for Finance, and me to go to see him at the Arusha State Lodge. We discussed the situation at length and agreed that I should start at once drafting new Exchange Control regulations to guide us in the remittance of funds abroad. The second point I made in my contribution to the NEC Meeting was to urge caution when implementing the measures translating the resolutions into action. I stressed that proper management was crucial, for without it, production, whether in 108 industry, agriculture, other economic and social...