Macroeconomic Policies and Agricultural Performance

Abstract

This chapter examines the impact of macroeconomic policies on agricultural performance in Zimbabwe since independence, with a specific focus on the growth in aggregate output, price incentives and export performance. Agriculture is the backbone of Zimbabwe’s economy – it contributes about 16 per cent to GDP. However, this grossly understates its importance because over 70 per cent of the population derive their livelihoods either directly or indirectly from agriculture and it accounts for at least one-third of formal sector employment. Not only does it provide about 60 per cent of industrial raw materials; it is also an important source of intermediate and final demand for manufacturing output. Thus, agriculture has strong forward and backward linkages with manufacturing and the rest of the economy such that policies that negatively impact on agriculture would have large economy-wide multiplier effects.