From Public Ownership to Joint Venture Privatisation of Parastatals: A History of the Tanzania-China Friendship Textile Mill, 1968-2020

Abstract

In 1968, the Tanzanian government inaugurated the Tanzania-China Friendship Textile Mill (FTM) which was built by using a Chinese interest-free loan. Built in the context of import substitution industrial strategy and the policy of socialism and self-reliance embodied in the Arusha Declaration of 1967, the FTM recorded a high productivity in the 1970s and declined in the 1980s. After the adoption of neo-liberal policies in the 1990s, the FTM was privatised to a Chinese company through a joint-venture contract (JVC) and it was renamed Tanzania-China Friendship Textile Company (FTC). In the early 2000s, FTC recovered shortly before it started to decline again until it stopped production in 2018. The extant literature fails to acknowledge interplay of both internal and external forces in FTM decline and they have not assessed the efficacy of joint venture privatisation. In addressing this lacuna, this paper argues that while the failure of government policies coupled with the impact of the global economic crisis of the 1980s to bring the textile industry to stand still in the 1990s, negative impact of economic liberalisation and the investor’s deleterious practices after privatisation were the final nails in the coffin.