IN the 1970s, Zimbabwe’s (Rhodesia) economy, although not apparent, was very diversified. 

The country ranked among many middle-income countries such as Turkey, Singapore, Malaysia and Nigeria while trading with the US and Europe.  

Notwithstanding UN sanctions, the country, at the time, had the fourth strongest economy in the world. 

For the first post-independence decade, the new Zimbabwean Government focused on programmes aimed at building the health and education sectors. 

Meanwhile, the economy continued to be run as in the pre-independence period, as a command economy. 

The Zimbabwe Government made it clear that the State was to play a central role in the country’s economic and social development

Although not high on a global scale, with the end of the liberation war, good rainfalls and a strong farming output boosted Zimbabwe’s growth.  

Zimbabwe’s growth rate during this period was higher than that of sub-Saharan Africa as a whole. 

The country soon faced the ravages of droughts in the early-1980s that impacted negatively on growth. 

The drought of 1982-3 was followed by another in 1987 when the contribution of agriculture to GDP growth was adverse. 

As the drought took place, there was also a world recession that resulted in commodity export prices decreasing. 

Because of these events, the Government decided to liberalise the economy through the Economic Structural Adjustment Program (ESAP), which allowed for an open market economy driven by a strong export base. 

The implementation of ESAP in 1991 was to achieve economic recovery and sustained growth through balancing the budget, strengthening the private sector and removing controls on trade.  The main goals of ESAP were to:

• achieve GDP growth of five percent during 1991 to 1995,

• raise savings to 25 percent of GDP,

• reduce budget deficit from over 10 percent of GDP to five percent by 1995,

• reduce inflation from 17,7 to 10 percent by 1995. 

Industrial restructuring and the upgrading of industrial competitiveness were components of the reforms prescribed by the Bretton Woods institutions.

Major features of the structural adjustment policies included mass labour retrenchments, trade liberalisation, currency devaluation, subsidy withdrawal and an increase in user fees that rendered basic services, like health and education, unaffordable to the average worker. 

Under new macro-economic policies, growth in the 1990s did not materialise; although performance indicators showed that the economy grew by an average of 4,3 percent annually under the ‘bad’ control policies of the 1980s but only by 0,8 percent under the so-called ‘good’ policies. 

The failure to achieve the expected five percent growth rate under ESAP was attributed to the adverse effect on the manufacturing industry.  

Although liberalisation was viewed by many as positive, it had the effect of exposing the manufacturing industry to foreign competition for which it was unprepared.  

The structural adjustment policy in Zimbabwe, as in practically most other developing African nations where it had been imposed, failed to produce industrial efficiency and dynamism.   

As Zimbabwe adopted its structural adjustment programmes, a range of Government policies affected industrial development, from general macro-economic management, through trade and competition policies and human resource development, to specific industrial development and technology policies.

Unfortunately, Government’s macro-economic plans were greater than the resources available.   

This created unrealistic expectations, concealing the probability that plans would be impossible to finance; especially after being disappointed by unmet promises of international aid.  

Droughts and imposition of stringent terms-of-trade worsened the situation. 

As elsewhere, macro-economic reforms had serious, implications in Zimbabwe, including political.  

The promotion of macro-economic agricultural policies in Zimbabwe, supported by ESAP, in effect, perpetuated peasant impoverishment in the early 1990s.

With regards to land, an implicit assumption of SAPs was that enterprise-level inefficiencies were a reflection of inappropriate macro-economic policies and distortions in resource allocation precipitated by selective industrial policies.

Inefficient activities were perceived to exist only because of Government-induced distortions.

Reforms were based on the premise that appropriate adjustment at the macro-level, accompanied by the ‘freeing up’ of market forces, liberalisation of trade and privatisation of parastatals, would provide the necessary and sufficient conditions for industrial recovery and growth.  

Social development and progress of the 1980s was clearly being eroded in the early 1990s with falling per capita incomes, unemployment and underemployment, accelerating ecological degradation and hunger.  

In the mid-1990s, Zimbabwe was confronted with serious internal and external contradictions, which intensified marginalisation. 

The crisis became more pronounced with mounting foreign debts, declining exports, refugee problems, servicing foreign debt, urban strife due to increased food prices and retrenchment. 

The failure of wage employment to keep up with formal sector wage-employment created unemployment and underemployment. 

Zimbabwe’s crisis reached alarming proportions in the late 1990s.  

The crash of the Zimbabwean Stock Market on November 14 1997 precipitated Zimbabwe’s economic decline.  

Just as the crash of the stock market in the US brought about the Great Depression in the 1930s.

Civil society groups began to agitate for their rights that had been eroded under ESAP.  

Two hundred and thirty-two strikes were recorded in 1997 alone; the largest number ever since independence. 

During the first half of 1997, war veterans also came together to organise themselves. 

Their demonstrations were initially ignored; but as the strength of the strikes grew, Government was obliged to concede to their demands.

By December 31 1997, a once-off gratuity of ZWD $50 000 was paid to the war veterans with a monthly pension beginning in January 1998.

In April 1989, former ZANLA and ZIPRA personnel, many of whom felt they had received insufficient rewards for their wartime service formed the Zimbabwe National Liberation War Veterans Association (ZNLWVA), with a membership of 30 000.

To raise money for this unbudgeted ‘expense’, the Government introduced a ‘War Veterans’ Levy,’ but faced considerable opposition from the labour force and had to borrow money elsewhere to meet these obligations.

In 1997, following the huge depreciation of the Zimbabwean dollar, the cost of agricultural inputs soared, undermining the viability of the producers who, in turn, demanded a raise in the producer price of maize.  

Millers also raised their prices by 24 percent in January 1998.  The consequent price increase in maize meal prompted nationwide riots.  

The Government intervened by introducing price controls on all basic commodities.

Government undertook several interventionist moves in attempts to reverse some of the negative effects of ESAP and strengthen the private sector that was suffering from decreasing output and increasing competition from cheap imported products.  

Dr Michelina Rudo Andreucci is a Zimbabwean-Italian researcher, industrial design consultant, lecturer and specialist hospitality interior decorator. She is a published author in her field. For views and comments, email: linamanucci@gmail.com