Structural adjustment: Zimbabwe

Abstract

The post-independence era in Zimbabwe saw the expansion of social services, such as Health and Education, in an attempt to correct the historical imbalance of services available to the indigenous population. This meant that investment was disproportionately allocated to the social services. The end result of this was that inadequate investment in the productive sector could not create economic growth matching our population growth. Many “O” level certificate-holding students were produced, who, unfortunately, could not be absorbed by the stagnant, if not shrinking, economy. The inherited controlled economy which was characterized by foreign exchange controls, price controls, controlled employment practices, controlled parastatals, and unresponsive investment practices was given a new lease of life under our new socialist ideology which espoused a command economy. The combined efforts of these developments were a lack of growth in the economy, inadequate investment, high and unsustainable budget deficits, and increasing subsidies. These economic circumstances led to high unemployment and lower standards of living. The effects of intermittent drought and the poor commodity prices on the international market during the 1980s helped to accelerate conditions of poverty.