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Zimbabwe and the Economic Structural Adjustment Program

            After Zimbabwe gained independence on 18 April 1980 the government was involved in post war reconstruction redressing the imbalances which the white colonial regime had instituted and responding to the needs of the population. The country was in great need of the provision of health, education, recreation and employment opportunities.
             In October 1990 the Zimbabwe government started to implement a five year economic structural adjustment programme (ESAP) as a response to the economic crisis which had been affecting the country since the attaining of independence in 1980.The programme was developed or designed by the world bank to help developing countries.
             The measures introduced were;.
             -removal of price controls.
             -removal of wage controls.
             -reduction of government expenditure.
             -a 40% devaluation of the Zimbabwe dollar.
             -removal of subsidies on basic consumer goods.
             -liberalization of foreign currency allocation system.
             -removal of protection of non-productive import substituting industries and increased profit remittance abroad.
             -a radical restructuring of the various parastatals and other public enterprises.
             Between 1991 and 1992 the whole of Southern Africa experienced the worst drought which resulted in large scale crop failure, food shortages and in extreme cases famine. This drought impacted a lot on the government's economic structural adjustment programme (ESAP) .The severe drought strongly affected the agricultural output which is the main source of Zimbabwe's foreign currency revenue. When the government implemented ESAP they had not foreseen that there would be a worst drought which was going to adversely affect the programme, hence the drought contributed to the failure of ESAP. Since 1991 the Zimbabwe dollar was devalued repeatedly. The general liberalization of the economy culminated in the lifting of protectionism. The removal of price controls and wage controls had an effect on the country's economy as this opened up the domestic market to cheaper imports and resulted in the closing and downsizing of many of the country's big industries.


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