Zimbabwe’s Economy before IMF Sponsored Structural Adjustment Programs

After independence in 1980, the sanctions that had been imposed on Rhodesia under UDI were removed and the government was able to participate in the international monetary system. Soon after independence, the Gross Domestic Product (GDP) rose 16%, the manufacturing sector alone was up 15%.

However, the country experienced a drought in the 1982- 1983 agricultural season while manufacturing also declined 29% during the same period which forced the government to use its IMF credit to cover shortfalls in government expenditures. By 1985, the country was experiencing 7% GDP growth again. The government continued to invest heavily in social programs such as education and healthcare which had great returns later, however, they were also costly. The government decided to implement policy reforms to control spending which laid the foundation for the IMF Economic Structural Adjustment Program (ESAP).

The Zimbabwe government invested in social programs and was actively involved in the manufacturing sector with the goal of improving the well being of its black citizens who had been second class citizens prior to independence. As a result, Zimbabwe enjoyed the highest literacy rates in Africa from the 1990s to the 2000s because of the investments the government made in education.

Prior to ESAP, the unemployment rate was about 10% and growth of the industrial sector was about 4.2% from 1987- 1991. In the 1980s, manufacturing accounted for 10-18% of exports in that decade. During this time, the World Bank sponsored studies that suggested that 73% of Zimbabwe’s manufacturing was so inefficient that it needed to be restructured or shut down. Luckily, the government ignored these suggestions. After the government ignored these suggestions, the World Bank then published new reports that concluded the manufacturing sector was efficient. Why did the World Bank change their conclusions? Zimbabwe’s economy could have been devastated if they had listened to the suggestions? African leaders need to stop listening to the World Bank and IMF.