Macroeconomic Performance under the Economic Structural Adjustment Program: an Essay on Iatrogenic Effects

Abstract

This chapter seeks to analyze and, in the process, provide an explanation for Zimbabwe’s macroeconomic policies and performance during the period of the economic structural adjustment program (ESAP) which has been being implemented since 1991. In order to appreciate the problems that faced Zimbabwe’s black majority government soon after it achieved independence in 1980 and the economic policies pursued during the ESAP period, it is important to understand the sequence of events, especially the economic policies and strategies pursued prior to the attainment of independence. Firstly, successive settler colonial regimes had culminated in the Unilateral Declaration of Independence (UDI) in 1965 by the then Prime Minister, Ian Smith. This was followed by the imposition of economic sanctions by the British government, with the support of the United Nations, which forced the rebel white colony of Rhodesia to pursue inward-looking policies that were supported by a panoply of controls over the economy. This ushered in a phase of economic development characterized by intensive import-substituting industrialization, accompanied by expansion in agriculture, mining and service sectors. The first decade of UDI experienced rapid growth of both GDP and employment – in excess of 7 and 3.8 per cent respectively. The manufacturing sector expanded its share in GDP from 19.3 per cent in 1965 to 23.7 per cent in 1974 (see Table 2.1).