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The majority of those connected reside in urban areas, and plans to take electricity to villages are intended to have the added benefit of also slowing deforestation there.import substitution—that is, the manufacture (often from imported materials and parts) of products that were once purchased from abroad.

The principal industries are food processing, textiles, brewing, and cigarette production.

Some two-fifths of the country’s population is engaged in agricultural production (working as independent producers or salaried farm labourers), and agriculture accounts for approximately the same proportion of the country’s gross domestic product.

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Tanzania’s native forests are primarily composed of hardwoods, but softwood production is increasing.

A large pulp and paper mill at Mufindi is supplied by the extensive softwood forest nearby at Sao Hill.

The large amounts of imported materials, parts, and capital equipment necessary to implement such a policy could not be paid for, owing to the country’s lack of foreign exchange.

Standby credit facilities from the IMF provided the capital investment needed to initiate a rehabilitation of industry.

In the long term, however, the centrally planned economy contributed to a marked economic decline.

Beginning in 1979 and continuing into the 1980s, the relatively high international oil price, the country’s declining terms of trade, and the sluggishness of the domestic economy brought about rapid inflation and the emergence of an unofficial market (consisting of the smuggling of goods abroad in order to avoid taxes and price controls).There are large exploitable deposits of coal in the southwest, phosphate deposits in Arusha, and nickel in the Kagera region.Natural gas has been discovered at Songo Songo Island.Despite attempts to cut imports to the barest minimum, the trade deficit widened to an unprecedented level, and the balance-of-payments problem became so acute that development projects had to be suspended.This economic crisis forced the government to secure a loan from the International Monetary Fund (IMF) in 1986.Of these, gold—which provided more than two-thirds of the country’s export earnings in the early 2000s—is by far the most lucrative.

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