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 ECONOMIC MANAGEMENT IN A
HYPERINFLATIONARY ENVIRONMENT
Economic Management
in a Hyperinflationary
Environment
The Political Economy of Zimbabwe,
1980–2008

Edited by
GEORGE KARARACH AND RAPHAEL O. OTIENO

1
 3
Great Clarendon Street, Oxford, OX2 6DP,
United Kingdom
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and education by publishing worldwide. Oxford is a registered trade mark of
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The moral rights of the authors have been asserted
First Edition published in 2016
Impression: 1
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Published in the United States of America by Oxford University Press
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 Acknowledgements

It was during a luncheon hosted in honour of graduating Fellows of the

Macroeconomic and Financial Management Institute of Eastern and Southern
Africa (MEFMI), Class of 2012, that the idea to document the experience of the
Zimbabwean economy during the 2000–08 crisis period occurred. The idea was
born from an exchange between us (the editors) and the then Executive
Secretary of the African Capacity Building Foundation (ACBF), Dr Frannie
A. Léautier, the then Executive Director of the MEFMI, Ellias Ngalande, and
the then MEFMI Board of Governors Chairman, Professor Tumusiime-
Mutebile. The consensus from the exchange was that some of the experiences
in Zimbabwe and the coping mechanisms that the Government, firms, and
households adopted were so exceptional that they needed to be documented
in a book. We decided that such a volume should provide a political economy
analysis of leadership and economic management of crises in developing econ-
omies based on Zimbabwe’s experience. Therefore, Economic Management In a
Hyperinflationary Environment: The Political Economy of Zimbabwe, 1980–2008
encapsulates authoritative thematic-cum-sectoral perspectives on economic
management under severe shocks. We are heartened that contributors include
leading Zimbabwean researchers, renowned academics in top African univer-
sities and economists from regional entities such as the MEFMI and the African
Development Bank.
The book was written over a period of about three years and greatly benefited
from interactions with several people to whom we owe sincere gratitude. These
include the editorial team at Oxford University Press, especially Adam Swallow
and Aimee Wright, and the reviewers who provided very valuable comments on
the initial draft. We are especially grateful to MEFMI and ACBF for commission-
ing the various papers that form eighteen of the core chapters and providing an
amenable working environment for the tasks involved to produce a book of
this kind.
We also received valuable comments and insights from Anthony Barzey,
Amos Cheptoo, Siaka Coulibaly, Caleb Fundanga, Gibson Ghuveya, Kobena
Hanson, Jean Baptiste Havugimana, Phineas Kadenge, Harry Kojwang, Steve
Kayizzi-Mugerwa, Abbi Keddir, Frannie A. Léautier, John Loxley, Sydney
Mabika, Fewstancia Munyaradzi, Victor Murinde, Takawira Mvuma, Alphious
Ncube, Muthuli Ncube, Ellias Ngalande, Floribert Ngaruko, Dominique
Njinkeu, George Omondi, Michael Plummer, Malcolm Sawyer, Mbui Wagacha,
James Wakiaga, Timothy Shaw, as well as three anonymous referees. We also
benefited from excellent coordination and data assistance from Lekinyi Mollel,
Tiviniton Makuve and Stanislas Nkhata. Sharon Wallett, Margaret Mutyorauta,
and Farirai Katongera offered essential administrative back-up. We equally
thank our families for bearing with us during periods of distraction while
overseeing this undertaking.
vi Acknowledgements

The analysis and opinions expressed in this book are those of the contributors
alone and do not reflect the views or policies of any official entity such as the
ACBF, MEFMI, and the African Development Bank (AfDB). We accept respon-
sibility for any errors and/or omissions that may be encountered in the book.
George Kararach Raphael O. Otieno
Tunis, February 2016 Harare, February 2016
 Contents

List of Figures ix
List of Tables xiii
List of Contributors xvii

INTRODUCTION
1. The Political Economy and Evolution of Development
Policy in Zimbabwe 3
George Kararach, Raphael O. Otieno, and Tiviniton Makuve

PA R T I : O V E R V I E W O F TH E C R I S I S
2. Pre-Crisis Macroeconomic Performance and Triggers of the
Economic Crisis in Zimbabwe 23
Arnold M. Chidakwa and Gibson Chigumira

P A R T I I : PR O D U C T I V E S E C T O R P E R F O RM A N C E
3. Response of the Manufacturing Sector to the Zimbabwe
Economic Crisis 55
Cornelius Dube and Erinah Chipumho
4. The Performance of the Tourism Sector in Zimbabwe during
the 2000–08 Economic Crisis 85
Sanderson Abel and Evengelista Mudzonga
5. Experiences in the Zimbabwe Hotel Industry during
Hyperinflation 106
Miriam Mugwati, Doreen Nkala, and Eukeria Mashiri
6. The Impact of Hyperinflation on the Agriculture Sector:
Lessons from Zimbabwe, 1998–2008 125
Brighton Shayanewako, Elson Chuzu, and Adonis Tafirenyika Ntuli

P A R T I I I : B AN K I N G , C A P I T A L M A R K E T S ,
AND FINANCIAL SERVICES
7. Bank Failures in Zimbabwe: Evidence and Lessons, 2000–09 139
Jonathan Tembo
8. Operations, Regulation, and Practices of the Zimbabwe Stock
Exchange during the Hyperinflationary
Period, 2000–08 157
Sehliselo Mpofu and Jecob Nyamadzawo
9. Stock Market Returns and Hyperinflation in Zimbabwe, 1998–2008 199
Nyasha Mahonye and Leonard Mandishara
viii Contents

10. The Pension Fund Industry Experiences during Hyperinflation 213

Desire T. Mutsawu and Davison Sarawoi

PA R T I V : M O NE T A RY P O L I C Y AN D P U B L I C
F I NA N C I A L M AN A G E M E NT
11. Zimbabwe Monetary Policy, 1998–2012: From Hyperinflation to
Dollarization 249
Mark J. Ellyne and Michael R. Daly
12. Relegating the Core Business: The Case of the Reserve Bank
of Zimbabwe Undertaking Quasi-Fiscal Activities, 2000–08 290
Leonard Mandishara and David Mupamhadzi
13. Management of Public Debt in Zimbabwe During the
Hyperinflationary Period 305
Jecob Nyamadzawo and Bothwell Nyajena
14. Monetary Policy Formulation and Implementation in a
Hyperinflationary Environment: The Case of Zimbabwe, 2000–08 336
Gladys Shumbambiri

P A R T V : S O C I A L D I M EN S I O N S O F TH E C RI S I S
15. The Impact of Human Capital Losses in Zimbabwe: A Focus
on the Public Sector for the Crisis Period, 2000–08 379
Tawanda Chinembiri
16. The Social Protection Policy Responses in the Primary
and Secondary Education Sector during the Crisis Period 403
Evengelista Mudzonga
17. The Health Sector’s Response to the Impact of Hyperinflation: The
Case of Zimbabwe 428
Shepard Mutsau
18. Social Challenges of Hyperinflation: A Case of Health
and Education in Zimbabwe, 2000–08 441
Sanderson Abel
19. Health Care Finance and Health Outcomes during Zimbabwe’s
Economic Crisis 465
Nicholas Masiyandima

P A RT V I : C O N C L U D I N G RE M A R K S
20. Development Policy and Managing Shocks in Developing
Countries: Lessons on Currency Reform in Zimbabwe 497
George Kararach

Index 539
 List of Figures

2.1 Real GDP Growth (Annual %) 26

2.2 Fiscal Deficits (% of GDP) 28
2.3 Government Expenditure (% of GDP) 28
2.4 Debt Financing 29
2.5 Public Debt as a Percentage of GDP 32
2.6 Balance of Payments 34
2.7 Zimbabwe’s Aggregate Net Resource Flows 35
2.8 Real GDP and Employment Growth 36
2.9 Moderation Relationship 43
2.10 Inflation and Real GDP Growth Rate 45
3.1 Zimbabwe Manufacturing Sector to GDP Ratio, 1990–2009 61
3.2 Volume of Manufacturing and Wage Indices in Zimbabwe, 1990–2000 61
3.3 Capacity Utilization in Zimbabwe Manufacturing Sector (%) 63
3.4 Manufacturing Value Added Per Head, Zimbabwe 1980–2006 65
3.5 Manufactured Exports and Sector Contribution to Total Exports, 2000–08 66
3.6 Volume of Manufacturing Index (1990=100), Zimbabwe, 1996–2011 67
3.7 Manufacturing Sector Contribution to GDP for Selected Countries,
1990–2009 68
3.8 Electricity Consumption Patterns, Zimbabwe 73
3.9 Importation of Machinery and Equipment Index (1996=100) 74
4.1 Number of Tourist Arrivals in Zimbabwe from 1980–2008 89
4.2 Sources of Tourists that Visited Zimbabwe, 2002–11 90
4.3 Zimbabwe’s Tourist Receipts (US$ Millions) from 1980–2008 91
4.4 Contribution of Tourism to Employment (%) 91
4.5 Tourism Contribution to GDP (%) 92
4.6 Tourism Contribution to Total Exports (%) 92
4.7 Investment in the Sector 92
4.8 Average Room Occupancy, 1997–2011 (%) 95
4.9 Purpose of Visits in 2007 and 2010 100
5.1 Gender of Participants 113
5.2 Location of Participants 114
6.1 Agriculture Growth Trend, 1998–2008 126
6.2 Inflation and Agriculture Performance, 1998–2008 129
6.3 Relationship between Agro-Output and Log Inflation 2002–08 130
7.1 Pre-Crisis GDP Growth at Market Prices 140
7.2 GDP Growth at Market Prices 144
7.3 Manufacturing Output Growth 145
x List of Figures

7.4 Tobacco Output 145

7.5 GDP Per Capita 146
7.6 Gross National Savings and Investment 146
7.7 Benchmark TB Yield Versus Annual Inflation 147
7.8 Exports and Imports (US$ million) 148
7.9 Current Account Balance and Foreign Debt (% of GDP) 149
7.10 Capital Adequacy 150
7.11 Asset Quality: Bad Debt Charge to Average Advances 151
7.12 Net Interest Margin and Non-Interest Income 152
7.13 Cash and Liquid Assets to Deposits Versus Advances to Deposits 152
8.1 GDP Growth and the ZSE Indices (Annual Averages) 178
8.2 ZSE Listings over the Crisis Period (2000–08) 178
8.3 End 2008 Asset Price Bubble Burst (Weekly Share Prices for
Selected Counters) 180
8.4 Old Mutual: Price Per Share (Z$ Trillion) 183
9.1 Total Value of Stocks Traded as a Percentage of GDP 201
9.2 Zimbabwe Exchange Rate 201
9.3 Volume of Stock Traded 202
10.1 Illustration of the Three-Pillar Model of Retirement Savings 215
10.2 Pension Fund Stakeholder Relationships 217
10.3 Responses on the Extent of Inflation’s Contribution to Low Pension
Conversion Values 225
10.4 Conversion Values Awarded to Members 226
10.5 Proportion of Non-Pensionable Remuneration Adopted during the
Hyperinflation Period 227
10.6 Trends Industrial Indices 232
10.7 Trends in Mining 232
10.8 Remittance of US$ Contribution into Pension Funds by Companies 240
10.9 Frequency of Responses from Industry on Key Measures to Protect
Value of Investments 241
11.1 CPI inflation 251
11.2 Zimbabwe: Real GDP (in constant 1990 Zimbabwe dollars) 253
11.3 Zimbabwe: Broad Money Growth (line) and Reserve Money Growth
(dot) - 12 month per cent change 258
11.4 Official versus Parallel Market Exchange Rate (Z$/US$, increase is
depreciation) 260
11.5 Parallel Market Exchange Rate Premium (Ratio of Parallel to Official
Rate, >1 Means a More Depreciated Parallel Rate) 260
11.6 Real Exchange Rate Zimbabwe Dollars per US Dollars
(an Increase Implies Real Depreciation) 261
11.7 Impossible Trinity 267
11.8 Zimbabwe: Chinn-Ito Index of Capital Account Openness
(0 = closed, 1 = open) 268
12.1 Economic Growth Rates for Zimbabwe for the Period 2000–08 291
 List of Figures xi

12.2 Sectoral Utilization of PSF Facility 296

12.3 Percentage of Productive Sector Fund to Total QFAs 296
12.4 Proportion of Beneficiaries 297
12.5 Summary of QFAs by the RBZ 299
12.6 Annual Money Supply Growth 300
13.1 Evolution of Domestic Debt by Holder in Percentage Terms 320
13.2 Evolution of External Debt, 2000–08 in US$ Millions 321
13.3 Composition of Multilateral Debt as at 31 December 2008 322
13.4 Paris Club—DOD by Creditor Country as at 31 December 2008 323
13.5 Non-Paris Debt by Creditor Country as at end-2008 in
Percentage Terms 323
13.6 External Debt by Currency as at 31 December 2008 324
14.1 GDP Trends (1999 to 2008) 338
14.2 Annual Inflation 338
14.3 Zimbabwe’s Quasi-Fiscal Activities 346
14.4 Graph of Residual Series 357
14.5 Inflation Spiralled Out of Control in Late 2007–Early 2008 (Consumer
Price Index; Annual Percentage Change) 362
14.6 Zimbabwe—Cereals—Commercial Imports and Food Aid Imports 363
15.1 Registered Doctors Versus Doctors in Post in Public Sector, 1995–2000 390
15.2 Registered Nurses Versus Nurses in Post in Public Sector, 1995–2000 391
15.3 Linkages Between Remittances and Development 397
16.1 Net Enrolment for Primary Education 409
16.2 Primary School Completion Rate 410
16.3 Pass Rates for Primary and Secondary Schools between 2005 and 2010 411
16.4 MOESAC Expenditure as % of Total Public Expenditure 419
17.1 Health Expenditure Per Capita, 2005–09 432
17.2 Comparison of Health Budget and Health Expenditure 433
17.3 Decline in Health Facility 433
18.1 GDP per Capita for Zimbabwe (US$) 442
18.2 Infant Mortality Rate and the Under 5-Year Mortality Rate 448
18.3 HIV/AIDS Prevalence Rate and Deaths 449
18.4 Tuberculosis Deaths (% per 100,000) 451
18.5 Cholera Cases and Deaths 451
18.6 Health Expenditure 452
18.7 Health Donor Funding 453
18.8 Government Allocation to the Health Assistance Programme 454
18.9 Government Allocation to Public Health Assistance 455
18.10 Government Allocation to the Education Sector (Percentage of
Total Budget) 460
18.11 Government Allocation to BEAM (as percentage of total budget) 461
19.1 The Poverty—Health Cycle 469
xii List of Figures

19.2 Childhood Socio-Economic Circumstances and Future Health Outcomes 470

19.3 The Impossibility of Health Insurance in a Crisis 472
19.4 Summary of Zimbabwe’s Economic Crisis and the Health Sector 476
19.5 Schematic Propensity Score Matching on Health Indicators and Outcomes 479
19.6 Health Care Expenditure 480
19.7 Shift in Health Care Expenditure Burden towards Crisis 481
19.8 Health Sector Staffing and Equipment Capacity after Crisis 482
19.9 Age-Standardized DALYs/100,000 Persons in Selected Countries (2004) 483
19.10 Maternal Mortality and Skilled Attendance at Delivery 485
19.11 Infant and Under 5 Child Mortality 486
19.12 Selected Immunizations 488
19.13 The Double Tragedy of Being Poor and Sick in a Crisis 489
20.1 Average Real Earnings Index, 1975–2004 (1990 = 100) 501
20.2 Major Constraints on the Manufacturing Sector as of August 2009 502
20.3 Changes in Selected Items of Zimbabwe’s CPI—Jan–Sep. 2009 504
20.4 Rate of Capacity Utilization in Zimbabwean Manufacturing Sector 504
20.5 Evolution of the Budget Deficit 1997–2009 509
20.6 Quasi-Fiscal Expenditures in Zimbabwe as % of GDP 2005–08 509
20.7 Underlying Monetary Dynamics Driving the Chronic Endemic
Inflation and the Hyperinflation 510
20.8 Evolution of Real Interest Rates 511
20.9 GDP Growth Rates, 1997–2009 513
20.10 External Sector Performance, 1998–2007 513
20.11 Evolution of Zimbabwe’s Import Cover 514
20.12 Trends in Manufacturing Output (Billions) 515
20.13 Trend in Employment Growth in Zimbabwe 1997–2004 516

Appendix Figures
8.A1 Market Capitalization (Z$)—Including 2008 161
8.A2 Market Capitalization (Z$)—Excluding 2008 161
8.A3 Industrial Index—Including 2008 161
8.A4 Industrial Index—Excluding 2008 162
8.A5 Mining Index—Including 2008 162
8.A6 Mining Index—Excluding 2008 162
8.A7 Turnover Values (Z$)—Including 2008 163
8.A8 Turnover Values (Z$)—Excluding 2008 163
8.A9 Turnover (Volume)—Including 2008 163
8.A10 Turnover (Volume)—Excluding 2008 164
8.A11 Foreign Deal Values (Z$)—Including 2008 164
8.A12 Foreign Deal Shares—Including 2008 164
8.A13 In & Outflows (Z$)—Including 2008 165
8.A14 In & Outflows (Shares)—Including 2008 165
 List of Tables

1.1 Selected Macroeconomic Indicators, 1980–90 9

1.2 Selected Economic Indicators, 1991–97 12
1.3 Selected Macroeconomic Indicators (constant US$) 13
2.1 Zimbabwe Pre-crisis Economic Performance (%) 30
2.2 Zimbabwe Tax Buoyancy and Elasticity Compared 31
2.3 Zimbabwe Pre-crisis Economic Performance 32
2.4 Parallel Market Development in Zimbabwe 33
2.5 Employment Elasticities and GDP Growth (%) 36
2.6 Determinants of Economic Growth 38
2.7 Relationship between GDP Growth and Economic Variables 38
2.8 Independent Variables 41
2.9 Regression Results 44
2.10 Simulation Results (10% change in the independent variable) 46
3.1 Deindustrialization in Zimbabwe, 2000–04 62
3.2 Percentage of Establishments by Sub-sector Working at Full
Capacity: 2006–09 64
3.3 Manufacturing Value Added Per Head, Zimbabwe 65
3.4 Growth in Manufacturing and Non-Tradable Sector Output, 2000–08 67
3.5 Electricity Generation Statistics, Zimbabwe, 2000–10 72
3.6 Capacity Utilization in the Railway Sector in Zimbabwe 75
3.7 The Number of Manufacturing Sector Firms in Germany under
Hyperinflation 79
4.1 Number of Tourism Players by Sub-sector and Category in Zimbabwe 94
4.2 Some of the Airlines and Routes Serviced between 1990 and 2000 97
4.3 Airline Market Share by Arrivals to Zimbabwe, 2007–10 (%) 97
4.4 Airport Market Share by Arrivals 98
5.1 Distribution, Hotels & Tourism Sector Performance from 2000 to 2008 108
5.2 Responsiveness of Staff in a Stable Environment 115
5.3 Responsiveness of Staff during the Economic Crisis 115
5.4 Service Assurance from Staff in a Stable Environment 116
5.5 Service Assurance from Staff during an Economic Crisis 116
5.6 Customer Expectations of Hotel Tangibles 117
5.7 Customer Perceptions of Tangibles during the Economic Crisis 117
5.8 Customer Expectations of Empathetic Staff 117
5.9 Customer Perceptions of Empathetic Staff during Economic Crisis 117
5.10 Customer Expectations of Reliability 118
5.11 Customer Perceptions of Service Reliability during Crisis 118
5.12 Average Mean Scores of Service Quality Expectations (E*) and
Perceptions (P*) 119
xiv List of Tables

5.13 Average Room Occupancy Rates (%) 120

5.14 Average Bed Occupancy Rates (%) 120
5.15 Average Room and Bed Occupancy Rates and Clientele Composition (%) 121
6.1 Summary of Agriculture Production (000’ tonnes) 1998–2008 126
6.2 Summary of Regression Results 133
6.3 Summary of Regression Results 134
8.1 Interest Rate Developments during the Crisis (2000–08) 158
8.2 Amount Raised at the ZSE Over 2000–08 159
8.3 Summary of ZSE Foreign Market Performance Indicators in
Annual Averages 160
8.4 ZSE Market Performance Indicators During Hyperinflation 161
8.5 ZSE Market Performance Indicators Database 2000–08 166
8.6 Institutional, Technological, and Infrastructural Indicators of the ZSE 177
8.7 Annual Inflation, Money Supply, GDP Growth, and the ZSE Indices 177
8.8 Summary of ZSE Foreign Market Performance Indicators in Annual
Averages 185
9.1 Revaluation of Zimbabwe Dollar 200
9.2 Inflation Developments in Zimbabwe 200
9.3 Performance of ZSE 202
9.4 Results of Unit Root Tests 207
9.5 Unit Root Test in Levels 207
9.6 Spearman Rank Correlation Test 208
9.7 OLS Results for Mining Return Index 208
9.8 OLS Results for Industrial Return Index 209
9.9 Johansen Test for Multiple Co-Integrating Vectors 209
9.10 Error Correction Estimates 210
10.1 Survey Respondents 223
10.2 Highest Monthly Inflation Rates in History 224
10.3 Average Annual Investment Returns Earned on Market Linked
Investments 231
10.4 Guaranteed Fund Average Returns Declared by Life Insurance
Companies 231
10.5 ZSE Industrial and Mining Indices 232
10.6 Investments held by Life Insurance Companies 233
11.1 Ten Highest Recorded Hyperinflations 251
11.2 Augmented Dickey-Fuller Test for Unit Root for Real Exchange
Rate for Zimbabwe (Excludes Last 6 Months of Data) 262
11.3 Stationarity Tests for All Variables 264
11.4 Zimbabwe: QTM-PPP Error Correction Model 266
11.5 Summary of Benefits and Costs of Dollarization 271
11.6 Measures of SADC Country Size and Wealth, 2010 273
12.1 Troubled Bank Fund Loan Disbursement in US$ 295
 List of Tables xv

12.2 Equipment Distributed by the RBZ 297

12.3 Summary of Composition of RBZ Creditors 301
12.4 Subsidy by the Reserve Bank of Zimbabwe 302
12.5 Summary of RBZ Subsidy 302
13.1 Institutional Framework for External Debt Management 315
13.2 Domestic Debt Portfolio: 2000–08 in Z$ Thousands 318
13.3 Public External Debt Average Loan Terms in 2008 324
14.1 High Inflation Periods: 1980–2005 344
14.2 Quasi-Fiscal Outlays to the Ministry of Finance as at 31 December 2006 348
14.3 Co-Integration Variables 353
14.4 ADF Unit Root Test 354
14.5 Critical Value Table: ADF Test 354
14.6 Unit Root Test: Phillips Perron with Trend and Constant 354
14.7 Critical Value Table: Phillips Perron 354
14.8 Co-Integration Equation 355
14.9 Residual of LM2 and LGDP Equation 356
14.10 Price Level Equation 357
14.11 Residual Test 358
14.12 Error Correction Model 359
14.13 Wald Test Results 360
14.14 Granger Causality Test 361
15.1 Staffing Situation in Zimbabwe’s Universities, 2008 389
15.2 Health Professionals Employed in the Public Sector, 1997 390
15.3 Vacancy Rates for Different Health Departments, 2006–08 391
15.4 Health Worker Vacancy Trends for 2008 393
15.5 Zimbabwe WHO Core Health Indicators 393
15.6 Summary of the Impact of Human Capital Losses on the Health
Sector for 2008 394
15.7 Remittances to Southern African Countries and their Share of
GDP, 2007 398
15.8 The Use of Remittances in Zimbabwe during the Hyperinflationary
Period 399
16.1 Total BEAM Allocation, Total Number of Children and Percentage
of Boys and Girls Assisted in Zimbabwe, 2001–2010 418
16.2 Children Benefiting from BEAM 421
17.1 Vacancy Rates of Health Staff 430
17.2 MOHCW Health Expenditure, 2005–09 431
17.3 Human Resources Expenditure as Percentage of Total Public
Health Budget 432
18.1 Health Vacant (Percentage) 447
18.2 Reasons for Migration 456
18.3 Statistics on the Education Sector 458
xvi List of Tables

19.1 Selected Economic Indicators for Zimbabwe 475

19.2 Major Indicators of Health Outcomes before and after
the Economic Crisis 484
19.3 Results from the T-Tests 490
20.1 Consumer Price Index (CPI) Major Groups and Sub
Groups—September 2009 503
20.2 Minimum Equity Capital Requirement for Banking Institutions 505
20.3 Trends in Real Interest Rates in Zimbabwe—1997–2008 511
20.4 FDI Inflows for Selected SADC Countries, 2008–09 514
20.5 Capacity Utilization in Zimbabwean Manufacturing Sector 515
20.6 Major Time-Lines in the Evolution of Events up to the Current Situation 517
20.7 Political and Economic Factors in Agricultural Policy Choice in
Zimbabwe 524

Appendix Tables
15.A1 Work Permits Issued to Nurses in the UK, 2002 401
15.A2 Staffing levels in Government Hospitals, 1995–2000 402
20.A1 Framework for Analysing Alternative Currency Regimes 526
 List of Contributors

Sanderson Abel holds an MSc in Economics from the University of Zimbabwe.

He is currently Senior Research Fellow at Zimbabwe Economic Policy Analysis
and Research Unit (ZEPARU). He undertakes empirical macro/microeconomic
policy research and analysis as well as contributing to producing regular ZEPARU
publications on economic issues. He has published in various journals.
Arnold M. Chidakwa is a PhD student at the University of Witwatersrand, South
Africa. He is currently employed as Executive Director of Effectuation Invest-
ments (Pvt) Ltd, a private company dealing with advisory services and capacity
building. Previously, he was a lecturer in the Department of Economics, Univer-
sity of Zimbabwe.
Gibson Chigumira has a PhD in Economics from the University of Edinburgh.
He is currently Executive Director of the Zimbabwe Economic Policy Analysis
and Research Unit (ZEPARU). Before joining ZEPARU, he was a senior lecturer
of Economics at the University of Zimbabwe. He has researched and published
extensively.
Tawanda Chinembiri holds two Masters degrees (MSc in International Develop-
ment Studies, National Graduate Institute for Policy Studies, Tokyo; and MSc in
Economics, University of Zimbabwe). He is currently working as Research Fellow
at Zimbabwe Economic Policy Analysis and Research Unit and as a part-time
lecturer at Zimbabwe Open University. Previously he was a Research Assistant
at the Institute of Sustainability and Peace, Department of International
Co-operation and Development, United Nations University Headquarters, Tokyo.
Erinah Chipumho holds an MSc in Economics from the University of Zimbabwe.
As Senior Research Fellow at Zimbabwe Economic Policy Analysis and Research
Unit (ZEPARU), her areas of interest are macroeconomic modelling, regional
integration, trade, fiscal, and energy economics. She has published extensively
locally.
Elson Chuzu is a postgraduate student of Economics at the University of
Zimbabwe. He is an economist with the Ministry of Finance and Economic
Development of Zimbabwe. He coordinates policy formulation and implementa-
tion, macroeconomic modelling and forecasting; produces a macroeconomic
framework for the budget and national development strategy; maintains a data-
base on sectoral developments; and monitors and evaluates public sector invest-
ment projects.
Michael R. Daly is a postgraduate student at the University of Cape Town, South
Africa. He is also a tutor of Evidence Based Management in the Department of
Management Studies, University of Cape Town, South Africa.
Cornelius Dube holds an MSc in Economics from the University of Zimbabwe.
He is currently Research Fellow with Zimbabwe Economic Policy Analysis and
xviii List of Contributors

Research Unit. He has published papers and contributed chapters in several books
including in The International Handbook on Private Enforcement of Competition
Law (2010) and in Competition Policy and Consumer Policy: Complementarities
and Conflicts in The Promotion of Consumer Welfare (2009).
Mark J. Ellyne teaches applied macroeconomics, international economics, mon-
etary policy, fiscal policy, financial programming, and regional integration at
University of Cape Town, South Africa. He is also a consultant to Southern Africa
Development Community on exchange control issues. He retired from the Inter-
national Monetary Fund after twenty-four years of service as an international
macroeconomist designing and implementing economic adjustment programmes
in sub-Saharan Africa.
Jecob Nyamadzawo has an MSc in Economics from the University of Zimbabwe.
He is currently working as Research Fellow at Zimbabwe Economic Policy
Analysis and Research Unit, concentrating on empirical macro/microeconomic
policy analysis and research. He previously worked as Senior Economist in the
Department of Domestic and International Finance, and External Loans in the
Ministry of Finance, Zimbabwe. He has published on government social economic
policies as well as on international economics.
George Kararach is an Economic Affairs Officer at the Macroeconomic Policy
Division, UN Economic Commission for Africa, Addis Ababa, Ethiopia and
Senior Consultant in the Statistics Department at the African Development
Bank, Abidjan, Cote d’Iviore.
Nyasha Mahonye has a PhD in Economics from the University of Cape Town,
South Africa. She is currently a lecturer at School of Economics and Business
Sciences, Witwatersrand University, South Africa. She has published extensively
in South Africa.
Tiviniton Makuve is currently a Programme Manager in Debt Management at
Macroeconomic and Financial Management Institute of Eastern and Southern
Africa (MEFMI), based in Harare, Zimbabwe. He holds a Master of Science degree
in Economics from the University of Zimbabwe and is a MEFMI Graduate Fellow
in Debt Management. He previously worked as Senior Analyst at the Reserve
Bank of Zimbabwe.
Leonard Mandishara holds an MSc in Economics from the University of
Zimbabwe. He is Acting Deputy Director, Department of Economic Research in
the Ministry of Economic Planning and Investment Promotion, Zimbabwe.
Previously he served as Graduate Teaching Assistant, Department of Economics,
University of Zimbabwe.
Eukeria Mashiri holds MSc in Accounting from Midland State University,
Zimbabwe. He is currently lecturing Accounting and other Commercial Modules
to undergraduate and postgraduate students at the Midland State University. He
previously worked in the accounting departments with various private companies
in Zimbabwe.
Nicholas Masiyandima is a PhD Economics student at the University of Cape
Town, South Africa. Before enrolling for PhD in 2010, he was Deputy Division
 List of Contributors xix

Chief, External Sector division at the Reserve Bank of Zimbabwe, in charge of the
international relations and capital account aspects. He has research experience in
regional integration economics at the Southern African Development Community.
Sehliselo Mpofu has a PhD in Economics from the University of Witwatersrand,
South Africa. She is currently Director of the Macroeconomic Management
Programme at the Macroeconomic and Financial Management Institute of East-
ern and Southern Africa. Previously she worked as Senior Research Fellow at
Zimbabwe Economic Policy Analysis and Research Unit and also in various senior
positions in the Reserve Bank of Zimbabwe. She has published extensively in
aspects of economics and finance.
Evengelista Mudzonga holds two Masters degrees (MSc in Economics from
University of Zimbabwe, and an MBA from Zimbabwe Open University). She
is currently a researcher of Trade and Development Studies Centre, Harare,
Zimbabwe. She has extensive working experience with the Southern African
Development Community, serving different capacities, most of them related to
researching on integration aspects. She has authored and co-authored various
studies/papers on regional economics and trade.
Miriam Mugwati holds an MSc in Marketing Strategy from Midlands State
University, Zimbabwe. She is currently a lecturer and head of Business Studies
department at Midlands State University, Zimbabwe. She has locally published
papers related to micro-business developments in Zimbabwe.
David Mupamhadzi is a PhD student in Development Economics at University of
Kwazulu-Natal, South Africa. He also holds an MSc in Economics, an MBA, and a
BSc in Economics, all from the University of Zimbabwe. David is an economist
with vast knowledge of the Zimbabwe economy, regional and international
markets. He was Economic Advisor to the Minister of Economic Planning and
Investment Promotion in Zimbabwe from 2009 to 2013. He has also worked as
an economist for Banc ABC, Century Bank, Trust Bank, and ZABG, among
other roles.
Shepard Mutsau holds three Masters degrees (MSc in Rural and Urban Planning
from University of Zimbabwe, Msc in Development Studies from National Uni-
versity of Science and Technology, and MSc in Peace, Leadership and Governance
from Africa University, Zimbabwe). He is currently a lecturer in the Department
of Development Studies, Zimbabwe Open University. He specializes in develop-
ment planning, development economics, disaster risk management, governance
and conflict management, project planning and management, monitoring and
evaluation of development projects.
Desire T. Mutsawu has over fifteen years of experience in the insurance industry
working with the First Old Mutual Life in Zimbabwe. He holds a BSc in Risk
Management and Insurance from National University of Science and Technology,
Zimbabwe.
Doreen Nkala holds an MSc in Marketing Strategy from Midlands State Univer-
sity, Zimbabwe. She is currently a lecturer at Midlands State University. She has
published on corporate governance and growth strategy for small traders in
Zimbabwe.
xx List of Contributors

Adonis Ntuli holds an MA in Public Policy from Peking University, China. He is

currently working as an economist in Ministry of Finance and Economic Devel-
opment dealing with macroeconomic modelling and forecasting; maintaining a
database on sectoral developments; and monitoring and evaluating public sector
investment projects. He has contributed to government policy documents.
Bothwell Nyajena holds an MSc in Economics, University of Zimbabwe. He is
currently Chief Economist at External Debt, Aid and Analysis department in the
Ministry of Finance, Zimbabwe. He is also a member of the Zimbabwe Economics
Society. He has experience in conducting analytical work and research on eco-
nomic development, debt, and aid issues as well as contributing to policy
documents.
Raphael O. Otieno is Director of Debt Management Programme at Macroeco-
nomic and Financial Management Institute of Eastern and Southern Africa. He
has vast experience in public finance and macroeconomic analysis, having held
senior positions in Kenya’s public service including working as an economist in
Kenya’s Ministries of Finance and Planning, Policy Analyst at the Kenya Institute
for Public Policy Research and Analysis, and Senior Research Officer/Economist
at the Central Bank of Kenya. In 2006 and 2007 he was a member of the Core
Technical Team that developed Kenya’s Vision 2030, a long-term development
blueprint that seeks to transform Kenya into a middle-income country by 2030.
From June 2011 to June 2013 he served as the Chairman of the Technical
Advisory Group of the World Bank’s Debt Management Facility for low-income
countries. He has published widely.
Brighton Shayanewako holds an MA in International Political Economy from
University of Tsukuba, Japan. He has over seventeen years of experience working as
an economist in the Ministry of Economic Planning and Investment Promotion rising
to the level of Deputy Director, Economic Affairs and Modelling. He has researched
extensively on fiscal policy formulation and implementation as well as on regional
integration aspects, particularly the economic impact of overlapping membership.
Davison Sarawoi is an MBA student at Zimbabwe Open University. He has over
ten years of experience in the insurance industry serving as Employee Benefits
Technical Manager with First Mutual Life Assurance Company, Zimbabwe.
He also served in various departments as Business Development Analyst, Risk
Specialist, and Pension Administrator.
Gladys Shumbambiri holds an MBA from the University of Zimbabwe. She is a
Certified Associate Trainer in Making Microfinance Work and Managing for
Improved Performance and Chief Executive Officer of Intelligent Business Con-
sultancy (Pvt) Ltd. She has previously served as Senior Economist at the Reserve
Bank of Zimbabwe, responsible for reviewing policies implementation and research.
Jonathan Tembo holds an MSc in Banking and Financial Services from
National University of Science and Technology, Zimbabwe. He is a lecturer in
the Department of Banking at the National University of Science and Technology,
Zimbabwe. He previously served as an accountant with private companies.
He has published papers on internet banking, financial exclusion, bank fraud,
and performance commercial banking loans.
Introduction
 1
The Political Economy and Evolution
of Development Policy in Zimbabwe
George Kararach, Raphael O. Otieno, and Tiviniton Makuve

1.1 BACKGROUND

Zimbabwe enjoyed a vibrant economy with well-functioning economic sectors in

the early years after gaining independence from Britain in 1980. It had positive
economic growth inspired by a robust agriculture sector, well-oiled industries, and
efficient and effective economic management inspired by desirable macroeco-
nomic policies. The financial and capital markets also served the vibrant economy
well. However, the economic gains of the 1980s and 1990s began to decline at the
turn of the century due to a combination of factors. Following the economic
downturn from around 1997, Zimbabwe was faced with several economic chal-
lenges. Economic growth became stunted, inflation reached record highs, and the
financial system nearly collapsed. A number of policy measures and instruments
were enforced to correct the economic malaise, but some of these measures seem
to have aggravated the situation. Examples of policies that seemed ill-informed
include the quasi-fiscal activities (such as subsidized farm equipment, direct
subsidies to farmers, and provision of basic commodities to households
under the basic commodities supply side intervention facility (BACOSSI)), the
restriction of foreign exchange transactions, and the unreasonable limits on
commercial banking transactions which led to long queues in the banking halls
every single day.
To understand the evolution of development policy in Zimbabwe, there is need
to appreciate the political economy actions, processes, and circumstances that
may have led to the quagmire that Zimbabwe found itself in over the years since
independence. This is the approach adopted by the authors in this volume.
Political economy here encapsulates the interplay between economics, law, and
politics, and how institutions develop or evolve in different directions and with
different and sometimes unpredictable developmental outcomes. These dynamics
have implications for the distribution of national income and wealth as well as the
ways services are provided/accessed and the ‘commons’ such as forests, pastures,
water resources and other environmental assets are cared for. For example, the
post-independence government in Zimbabwe invested enormous resources in
social development—especially in health and education—yet this is an aspect of
4 George Kararach, Raphael O. Otieno, and Tiviniton Makuve

the country that suffered serious decay from seeming policy disarray as the
economy slipped towards a hyper-inflationary environment. The question then
is: how did the Zimbabwean state lose its developmental nature? To answer this
question, the political economy has to be interpreted in historical perspective.

1 . 2 F R O M RH O D E S I A T O Z I M B A B W E :
STATISM, DESTABILIZATION, AND
RACIALIST POLITICAL ECONOMY

Zimbabwe moved from a society that, before independence, was highly racial. The
independent state, however, tried to change this situation and with time the em-
powerment of the black population started neutralizing the pre-independence racial
divide. However, looking at what happened during the chaotic land reforms in
Zimbabwe that entailed invasion and compulsory takeover of white owned farms
by people led by war veterans, many scholars would be sympathetic to Guy Scott’s1
opinion that it was the racism in the earlier years coupled with disproportionate
resource endowment favouring the whites that sowed the seeds for polarized politics
in the country. Nevertheless, a more convincing view is that evolution in the political
system, whereby the role of state institutions diminished while the powers and
controls were increasingly bestowed on the ruling political class, contributed a
great deal to the type of policies that could be adopted and implemented.
For example, if there were strong and independent institutions, the lawlessness
witnessed during the land invasions would not have occurred. Furthermore, the
land reform programme would have benefited more of the landless than the
political elite. Our submission is that if the land reforms were to give much of
the repossessed land to the poor, the land would have been better utilized for
productive activities. Nevertheless, much of the land was given to the elite whose
preoccupation was to own the land, not to use it productively.
Zimbabwe moved from a social developmental state in the 1980s to a predatory
crony-capitalist state after 2000. Whereas the communal areas were the primary
focus for poverty reduction in the 1980s, they were abandoned in the 1990s, and
only resettlement, based on literally seizing land, remained on the government
empowerment agenda after 2000. In the 1980s the priority for land allocation was
the resettlement of landless and war-stricken families. However, after 2000 seized
farmland was redistributed to senior politicians, officers, and other party loyalists.
In the 1980s the state accepted strong property rights based on freehold tenure but
there was gradual erosion of property rights in the 1990s, ending with the
nationalization of most commercial farms in 2005 without compensation.
Today, it seems the common good of the nation has been sacrificed by a predatory
state that condones corrupt, rent-seeking behaviour for the enrichment of the
politically privileged few (Doré, 2012).
However, another important tendency for state involvement in the economy
was driven by the newly independent state’s need for ‘survival’. Zimbabwe was

1
Guy Scott was Vice President, and then, later, President of Zambia.
 Political Economy and Evolution of Policies 5

under socio-economic pressure from the destabilization policy of racist apartheid

South Africa (Hanlon, 1986). There are a variety of interpretations of the destabiliza-
tion that occurred in Southern Africa in the early 1980s. One version posits the liberation
movements such as those in Zimbabwe, Angola, Mozambique, and Namibia and the
threat of international communism as the main forces of destabilization in Southern
Africa. South Africa in this regard was reacting to these ‘communist’ trends and became
the real stabilizing force in the region. But other commentators saw the apartheid regime
as the aggressor and driver of destabilization in Southern Africa as it saw the deracializa-
tion politics in countries such as Zimbabwe, Mozambique, and Namibia as a threat to its
own survival. For apartheid to survive, ‘hostile’ neighbouring countries like Zimbabwe
needed to be contained and made dependent on South Africa.
A wide range of ‘actions’ by apartheid Southern Africa in the region—military
incursions, assassinations, economic destabilization, offers of economic ‘co-
operation’ through a ‘constellation of states’, and proposed land cessions—defined
the destabilization policy (Ajulu, 1985). Chimanikire (1990) argues that ‘both
politically and geographically, Zimbabwe was the biggest threat to South African
hegemony. Robert Mugabe’s joint policies of socialism and reconciliation raised
the threat of a prosperous multiracial state which would challenge South Africa’s
apartheid policy. Zimbabwe is also critical to the Southern Africa Development
Coordination Conference (SADCC) because it is literally the hub of regional
transport and would thus be central in redirecting traffic away from South
Africa’(Chimanikire, 1990: 7).
Prior to independence, countries such as Zimbabwe and Namibia had close
economic ties to South Africa partly due their racialist approach to policy making.
To perpetuate the dependence of the Southern African states economically on
South Africa, as well as stall the emergence of majority rule, the apartheid regime
adopted a number of mechanisms to destabilize Zimbabwe. Chimanikire (1990)
lists some of the methods:
• disinformation and propaganda (e.g. hundreds of letters and anti-
Government leaflets were sent to Zimbabwe in 1983 and 1984)
• occupying territories (e.g. Namibia since 1966 and Angola since 1975–76)
• attempted assassinations of senior government officials (e.g. 18 December
1981 bomb attack on ZANU-PF HQ in Harare)
• elimination of liberation movement leaders and other government personnel
(e.g. assassinations in Maseru, Harare, Maputo, Lusaka, Gaborone during
1981–83)
• attacking economic installations and routes (e.g. in Mozambique, Angola and
Lesotho since 1980)
• attacking military installations (e.g. Inkomo Barracks and Thornhill Air Base
in Zimbabwe 16 August 1981 and 25 July 1982 respectively).
Castilho (1986) estimated that the policy cost the region about US$11.36 billion
over the 1980–84 period. Some of the costs included:
• forced military expenditures: US$3.6 billion
• increased transportation and energy costs: US$193 million
• refugee relief: US$750 million
6 George Kararach, Raphael O. Otieno, and Tiviniton Makuve

• lost exports and tourism: US$261 million

• resultant trade embargoes: US$295 million
• reduced economic growth: US$2.27 billion
• contraband and economic sabotage: US$215 million
The above destabilization damage amounts to about US$7 billion, or the
combined 1980 export revenues of the then nine SADCC member countries
(Angola, Botswana, Mozambique, Tanzania, Malawi, Lesotho, Swaziland, Zambia,
and Zimbabwe) (Chimanikire, 1990.2
Most authors in this volume note that, from 1980 onwards, Zimbabwe had
evolved from a social developmental state to a predatory state based on crony
capitalism. However, an earlier attempt to resist the destabilizing policies of
apartheid South Africa should not be underestimated in this political economy
narrative. Amongst others, land policy changed from supporting the poor to
privileging the rich, from focusing on reducing poverty in the communal areas
to rewarding supporters with land, and from enjoying secure property rights after
independence to seizures of property by force after 2000. Arguably, the delays in
land reform were necessitated by the reality of the fight against apartheid where
Zimbabwean leaders were allegedly made to put the issue on a slow pace in the
earlier years of independence (Jenkins and Knight, 2002). Land reform returned
to the table after the 1994 elections in South Africa but this time in a context of
impatient voters—especially the war veterans and workers (Jenkins and Knight,
2002).

1 . 3 EV OL UT I O N O F Z I M B A B W E’ S MA C R O EC O N O M I C
POLICIES, 1980–2008

Ndhlela (2011) argued that Zimbabwe pursued two diametrically opposite policy
regimes since independence: interventionist and market-based approaches. From
1980 to 1991 the country pursued interventionist policies. The control regime was
followed by the liberalization period (1991–96) of structural adjustment pro-
grammes. From 1997 to 2008 another interventionist regime, albeit unsuccessful,
was restored. The 1997 to 2008 regime was so unsuccessful that it led to the crisis
that the economy witnessed during the hyperinflationary period. In Chapter 2.0,
Chidakwa and Chigumira outline in detail the major triggers of the economic
crisis in Zimbabwe, including disruptions in the agriculture sector and other ‘self-
defeating’ policies that were pursued.

1.3.1 Pre-liberalization Period, 1980–90

At independence in 1980, the new government inherited a relatively developed,

diversified, and well-integrated economic system by Sub-Saharan Africa standards.

2
The primary objective of the SADCC was to minimize on the states from the negative effects of
apartheid South Africa’s domination of the regional economy.
 Political Economy and Evolution of Policies 7

Despite its heterogeneity, the economy was dualistic in terms of ownership struc-
ture and level of development, where a highly protected and favoured modern
economy co-existed with a largely marginalized communal economy that provided
a livelihood for about 80 per cent of the country’s population (GoZ, 2009). The
skewed ownership structure largely emanated from the colonial legacy which
created artificial barriers to entry by ‘indigenous’/black entrepreneurs into main-
stream economic activities. The result was that the white minority dominated
formal sector economic activity and owned two-thirds of high-potential land,
while the black majority were concentrated in rural, communal areas and the
urban informal sector. Hence, the economic policy framework pursued was shaped
by the need to transform the inherited colonial legacy which caused a grossly
inequitable pattern of income distribution and predominant foreign ownership of
assets. This promoted broad-based sustainable economic growth and reduced
socio-economic disparities, with the state as an engine of growth and development
(GoZ, 1981).
The socio-economic objectives of the government were formally articulated in
the Growth with Equity policy framework published in February 1981. This policy
had two core components: an extensive system of economic controls to support
industrial autarky and a massive redistributive system of social expenditures—
notably, high levels of health and education expenditures. The policy stated that
one of the government’s main objectives was ‘to . . . achieve a greater and more
equitable degree of ownership of natural resources, including land, and to pro-
mote participation in, and ownership of, a significant portion of the economy by
nationals and the state’ (GoZ, 1981). The policies of the new government repre-
sented continuity with those of the previous regime as state intervention in the
economy through state enterprises and the manipulation and regulation of trade,
fiscal, monetary, price, and wages were dominant.
A large portion of commodities (beef, dairy, grain, etc.) was heavily regulated,
while industry was protected from foreign competition and state-owned busi-
nesses monopolized the domestic market. The government also launched ambi-
tious plans geared towards increased social sector expenditures, expansion of rural
infrastructure and redressing social and economic inequalities through the land
resettlement programme. In urban areas, the minimum wage, black affirmative
and indigenization policies were pursued for redistributive purposes. Basic com-
modity price controls were followed in order to ensure decent living conditions
for the urban population. The core of the government’s redistributive agenda was
through increased public expenditures on education, health, and public sector
employment.
The overall consequence of the various state interventions was that, while
short- to medium-term gains in social welfare were realized, long-term economic
growth and efficiency were compromised (Mhone, 1995). The phenomenal GDP
growth rates of 11 per cent and 14 per cent realized in 1980 and 1981 respectively
were largely attributed to the country’s reintegration into the international trading
system following the removal of sanctions (then imposed on the white racist
minority government), as well as mineral and the commodity price booms of
1980. However, by 1982 the growth of the previous two years was overtaken by
sharp global economic decline and drought as well as the effects of the destabil-
ization policy of South Africa highlighted earlier. From then on, the economy
8 George Kararach, Raphael O. Otieno, and Tiviniton Makuve

failed to sustain growth rates sufficient to achieve desired levels of employment, or

social and economic transformation. The economy began to show signs of
overheating in 1981 and 1982, with the rate of inflation rising from 7 per cent
in 1980 to 15 per cent in 1982. The current account deteriorated from negative 5
per cent of GDP in 1980 to negative 12 per cent in 1982.
In order to address these emerging challenges, the government adopted the
Transitional National Development Plan (TNDP) in 1982, to cover the period
1982–85. The plan laid out the groundwork through which Zimbabwe would
attempt to achieve sustained economic growth through state investment and
co-operation with private enterprise. According to the plan, growth would be
achieved through:

a. establishment, by the state, of new enterprises in strategic industries;

b. state participation in existing strategic enterprises with the role of the state
gradually increasing until majority or full ownership by the state;
c. joint ventures between the state and private capital on terms which allow for
eventual ownership by the state;
d. establishment of co-operative ventures in industry, commerce, trade, and
agriculture as well as participation of local authorities in the economy;
e. workers’ education in management, technical skills, and ideology in order to
increase the efficiency of workers and their ability to participate in the running
of enterprises as well as increase their ideological consciousness; and
f. encouragement and acceptance of private local investment and foreign invest-
ment on terms conducive to, or consistent with, socialist transformation.

The TNDP envisaged a GDP growth rate of 8 per cent per annum, an increase
in the ratio of investment to GDP from 19 per cent in 1981/82 to 23 per cent in
1984/85, an increase in the ratio of domestic savings to GDP from 11 per cent in
1981/82 to 17 per cent by 1984/85 and a 3 per cent annual growth in employment.
However, these targets were not achieved as elucidated below (see also Table 1.1).
A combination of international recession, which resulted in falling commodity
prices, deteriorating terms of trade, a two-year drought, the vulnerability of the
economy to outside shocks including regional ‘conflicts’, and the influence of the
Bretton Woods institutions forced the government to radically shift its develop-
ment goals. Emerging economic problems prompted the early intervention of the
International Monetary Fund (IMF) (through lending) whose conditionalities
diverted the government away from more ambitious aspects of its early inward-
looking development strategies, replacing government attempts to exert control
through state-led planning with incentives to the export sector and reductions in
spending on social programmes. The debt–service ratio, which represented 2 per
cent of export earnings in 1980, had risen to 30 per cent by 1984, generating
additional pressure on the balance of payments. Unlike many African countries,
Zimbabwe was able to effectively manage this debt; however, it was ultimately
forced to curb heavy spending on healthcare, education, and land reform in order
to maintain production levels for debt repayment.
The socio-economic performance over the period was below that envisaged
under the TNDP. For example, the real GDP growth rate of 3 per cent per annum
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afflicting
afflictions
afflicts
affluent
affluents
afford
afforded
affording
affords
affront
affronted
Afghan
AFGHANISTAN
Afghans
Afion
aflame
afloat
afoot
aforementioned
aforesaid
afraid
afresh
AFRICA
African
Africander
Africanders
Africans
Afridi
Afridis
Afrikander
Afrikanders
Afrique
aft
AFTER
afternoon
afterthoughts
afterward
afterwards
afterwords
Afzul
again
AGAINST
Agamemnon
Agana
agape
agate
Agaña
AGE
aged
agencies
agency
Agent
agents
ages
agglomeration
aggrandised
aggrandisement
aggrandizement
aggravated
aggravating
Aggregate
aggregated
aggregating
aggregation
aggression
aggressive
aggressiveness
aggressor
aghast
Aghia
agitated
agitates
agitating
agitation
agitations
agitator
agitators
ago
Agoncilla
agonies
agonize
agony
Agram
Agramonte
agrarian
agrarianism
Agrarians
agree
agreeable
agreeably
agreed
agreeing
Agreement
Agreements
agrees
AGRICULTURAL
Agriculturalists
agriculture
agriculturist
agriculturists
aground
agt
Aguada
Aguadores
Aguas
AGUINALDO
Agutaya
Ahab
Ahaz
ahead
ai
Aid
aide
aided
Aidin
aiding
aids
ailing
ailments
aim
aimed
aiming
aimless
aimlessly
aims
Ain
Aintab
air
Aird
Airdrie
Aires
airs
aisle
Aiyun
Akarai
Akasheh
Akhissar
akin
AKKAD
Akkael
Aksakal
al
Alabama
alabaster
Alabat
alacrity
Alan
alarm
alarmed
alarming
alarmingly
alarms
alas
Alaska
Alaskan
Alawi
Albania
Albanian
Albanians
Albay
Albemarle
Albert
Albrecht
Albuquerque
alcabalas
alcalde
alcaldes
Alcock
alcohol
alcoholic
Alderley
aldermen
Aldersgate
Aldingen
Aldrich
ale
Alene
Aleph
Aleppo
alert
Alexander
Alexandra
Alexandre
Alexandretta
ALEXANDRIA
Alexandrian
Alexandrie
Alexandrovich
Alexandrovsky
Alexeieff
Alexis
Alfaro
Alfonso
Alford
Alfred
Alger
Algeria
Algerian
Algerians
Algerine
Algiers
algæ
Alhambra
Ali
Aliaga
Alicante
Alice
alien
alienate
alienated
alienation
alienist
Aliens
alight
alighting
alike
alive
Aliwal
alkaline
All
Allahabad
Allan
allay
allayed
allegation
allegations
allege
Alleged
Allegheny
allegiance
alleging
Allen
alleviate
alleviation
alleys
Allgemeine
ALLIANCE
alliances
allied
allies
allotment
allotments
allotted
allow
allowable
allowance
allowances
allowed
allowing
allows
allude
alluded
alludes
alluding
allured
allusion
allusions
alluvial
ally
Almanac
Almighty
Almirante
Almodovar
almond
Almost
Almyro
Alois
ALOISI
alone
Along
Alongside
Alonzo
aloof
aloud
Aloy
Alphabet
alphabetic
alphabetical
Alphonse
Alphonso
Alpine
Alps
Already
Alsace
Alsatian
also
altar
altars
alter
alterable
alteration
alterations
altered
altering
alternate
alternately
alternating
alternative
alternatives
alters
Altgeld
although
altitude
altitudes
altogether
aluminium
aluminum
Alva
Alvan
Alvey
always
am
Amacura
Amadeus
Amakuru
amalgamate
Amalgamated
amalgamating
amalgamation
amalgamations
Aman
Amand
Amapala
Amarna
Amasa
Amasia
AMATONGALAND
amazement
amazing
Amazon
Amazonian
Ambassador
ambassadorial
ambassadors
ambiguity
ambiguous
Ambil
ambit
ambition
ambitions
ambitious
Amboyna
Ambrogiana
Ambrose
Ambulance
ambulances
ambuscade