Prior to 1990, Zimbabwe experienced periods of strong and weak economic performance. Real GDP growth rates averaged nearly 4.5 percent a year during 1960-80, reflecting deliberate policies that promoted large-scale investment in domestic manufacturing and agriculture. The latter policies were motivated in large part by a need to achieve self-sufficiency following international sanctions against the Unilateral Declaration of Independence (UDI) Government. Since 1980, Zimbabwe’s performance has been mixed, reflecting policy lapses and adverse weather conditions that affected agricultural output. The country recorded its strongest post-independence growth performance during 1980-90 with gross domestic product (GDP) growing by an average of around 5.5 percent, higher than the average for Sub-Saharan African (SSA) countries, while the population grew at about 3 percent. Real GDP growth was, however, characterized CHAPTER 1: From Stagnation to Economic Recovery by considerable volatility influenced by weather conditions and high levels of foreign capital inflows at independence in 1980.

It was also driven by redistributive fiscal policies that focused on increased Government spending on health, education, and other social welfare programs within the framework of a command economy. Since 1990, the poor policy environment, government controls, droughts, and measures to address social inequalities via the provision of basic and social services at the expense of production, combined to cause the poor performance of the economy.