The first years of Tanzania's economic crisis in the 1980s were marked by the government's intense political and ideological opposition to the economic liberalization policies proposed by the multilateral donors. President Julius Nyerere, the country's undisputed leader since independence and a long-standing advocate of “African socialism and self-reliance,” quickly emerged as one of the most eloquent opponents of reform programs. He argued in a wide number of international forums that the effort demanded of his country represented an intolerable burden, with potentially devastating effects on political stability. Until his retirement from politics in 1985, Tanzania achieved virtually no progress on coming to grips with its devastating economic crisis. Balance of payments and fiscal deficits hovered in the double digits as a percentage of GDP, while real GDP per capita declined by some 20 percent between 1976 and 1983.

Nyerere was comforted in his position by the growing volume of aid the country received, which helped limit the impact of the crisis. In fact, much of the large infusions of aid by bilateral donors, notably the Scandinavians, was explicitly motivated by ideological solidarity with Nyerere's stance against the IMF. As a result, the break with the IMF notwithstanding, Tanzania was a leading recipient of aid in the region. Indeed, the World Bank itself continued to provide substantial support, despite misgivings about the country's policy stance. From 1981 to 1986, the Bank officially insisted that the government come to agreement with the IMF as a prerequisite for a structural adjustment loan, but it continued to disburse an average of $83 million a year in project funding.