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Macroeconomic Policies and Transition to the Economic Crisis in Zimbabwe

34 Pages Posted: 15 Jul 2010 Last revised: 19 Jul 2010

Thandinkosi Ndhlela

Monash University

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Date Written: July 10, 2010


This paper presents an account of Zimbabwe’s economic development and policy environment for the period 1980-2006. It focuses on monetary and exchange rate policies and explores their influence on economic developments before and after the reform programme that was launched in 1991. A key insight of the analysis is that despite concerted economic management efforts, the country never succeeded in attaining sustainable post-independence economic goals. The constraints imposed by the inward looking policies of the 1980s and the failure of exchange rate policies resulted in chronic real exchange rate overvaluation. This culminated in a currency crisis that seriously undermined the market reforms, and has been widely viewed as one of the most important factors leading to the macroeconomic crisis of the late 1990s.

Keywords: Zimbabwe, exchange rate policy, macroeconomic performance, economic crisis

JEL Classification: E6

Suggested Citation

Ndhlela, Thandinkosi, Macroeconomic Policies and Transition to the Economic Crisis in Zimbabwe (July 10, 2010). Available at SSRN: or

Thandinkosi Ndhlela (Contact Author)

Monash University ( email )

Wellington Road
Victoria, Roodepoort 3145

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