Tanzania - Domestic policy

Mkapa's skills as a conciliator and negotiator have been put to the test over the issue of the Union. Zanzibari resentment toward the mainland has been on the increase and the activities of CCM operatives in recent Zanzibari presidential elections have fueled resentment. In 2000, Zanzibar President Karume was declared the winner in a highly controversial election that was criticized by four independent monitoring groups. The Civic United Front (CUF) protested and demanded a rerun of the elections. CUF demonstrations in January 2001, declared illegal by the government, led to the use of force by security units that left at least 23 people dead on Pemba island, the opposition stronghold. Mkapa was accused of refraining from taking a firm line in the dispute. Reacting to domestic and international criticism of its actions, the government did initiate a peaceful dialogue between CCM and CUF in March 2001 that is intended to lead to an agreement on electoral reforms and resolve outstanding grievances between each party's supporters.

Early in 2003, Mkapa dismissed the National Microfinance Bank (NMB) board of directors, just as a bill to privatize the bank came up for consideration. The board was unhappy about the proposed bill, calling for more local control of the NMB than the government proposal allowed, and threatened to resign if the bill passed. The government stated that privatization would go forward without the board, even in the face of the lack of support from the Parliamentary Committee on Finance and Economic Affairs, but following the resignations, the issue was not brought forward for debate as scheduled.

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