"Banking on Socialism: Theorizing Credit under Ujamaa in the 1970s"

In 1967, Tanzania nationalized its banks, jump-starting a broader recommitment to socialist development in the country. This nationalization served as an inspiration for a wave of financial transformation. As close as neighboring Zambia and as far away as the proposed Republic of New Afrika in the American South, reformers, socialists, and radicals were inspired by Tanzania’s project of African socialist banking. At the same time, in the immediate aftermath of nationalization, Tanzania struggled with an exceptionally small pool of local experts in finance and economic planning which was spread thin across the newly state-run banks, existing economic planning departments, and haltingly Africanized educational institutions. As a result, a relatively small cohort of economists from Tanzania and abroad, moving between the University of Dar es Salaam, the newly created Institute of Finance Management, and various finance positions in the government, played an outsized role in developing the government’s influential credit policy. These efforts partially hinged on attempts to use loans to socialist villages to rationalize the relationship between a domestic economy of socialist rural production and an international capitalist market. They received exceptional international attention from both development agencies like OXFAM and the World Bank, as well as the international left from the Southern Africa liberation movements to Nordic socialists. However, economists and administrators increasingly struggled with a core constraint of realizing a national socialist economy financially interlinked with the global reality of non-socialist commodity markets. Over the course of the 1970s, Tanzania’s credit infrastructure went from widely lauded to increasingly criticized for failing to prompt a transformation in the country’s wealth in the face of a wave of global commodity crises. Faced with the new realities of neoliberalism, Tanzania’s financial minds documented the closing of a moment in which the co-creation of new African economic institutions seemed possible.