Chipika, S. Chibanda and P. It was introduced in Zimbabwe in October , but started in March after a meeting with aid agencies and the World Bank in Paris. ESAP entailed the reduction of Government expenditure by retrenching 25 percent of the civil service, withdrawing subsidies, commercialising and privatising some state-owned companies and introducing user-fees in the health and education sectors, among others. However, J. Chipika and others, in their book Effects of Structural Adjustment in Southern Africa, note that although ESAP was accepted as a way of achieving sustained economic growth in many African countries, many economists have dismissed the effects of the structural adjustment and stabilisation programmes as disappointing.
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Page 1 of 12 ESAP is a neo-liberal market-driven policy measure which was adopted as prescriptive solutions to the economic crises of the s Zhou and Zvoushe It was formerly introduced in Zimbabwe in October but started in earnest March after a meeting with aid agencies and the World Bank in Paris Bijimarkers et al It entailed the reduction of government expenditure by retrenching 25 percent of the civil service establishment, withdrawing subsidies, commercializing and privatizing some state owned companies, introducing user fees in the health and education sectors, among others Zhou and Zvoushe ESAP in Zimbabwe came as a result of the lame economy that the new government inherited and the inappropriate economic policies adopted at independence Makoni Linked to the whole question of liquidity, Zimbabwe experienced acute shortages of foreign currency.
The shortage of foreign currency was largely a result of lack of investment. This Economic Structural Adjustment Programme which in local parlance has been dubbed "Economic Structural Acquired Poverty" was supposedly a home grown set of economic measures designed to make the Zimbabwean economy more competitive. The reform program was meant to herald a new era of modernized competitive and export led industrialization, to bail the country out of its economic crisis and to create economic efficiency.
A general economic crisis was therefore looming and with no alternative, government accepted market reforms that ensured inflows of foreign currency and other support from IMF and World Bank.
Mlambo asserts that Economic Structural Adjustment Programs were formerly introduced in Zimbabwe in October Its framework was spelled out in the January document Zimbabwe; a framework Page 2 of 12 for Economic Recovery — These have proved to be disastrous and harmful causing socio economic effects to the government and the mass population. Soon after independence Zimbabwe hosted the Zimbabwe Conference on Reconstruction and Development ZIMCORD in March , the objectives of the conference was to promote higher growth and to reduce poverty and unemployment by reducing fiscal and parastatal deficits and instituting prudent monetary policy liberalizing trade policies and the foreign exchange system.
By Zimbabwe was undergoing what essentially amounted to a counter revolution as all the impressive gains made in the first decade of independence in education and health were eroded by ESAP. Leon states that during ESAP, government resources had decreased so that real expenditure on health declined because of a combination of rising costs, inflation, declining value of the Zimbabwean dollar, emerging diseases such as TB and AIDS.
In education, the picture emerging over the years of ESAP was equally disturbing. The induced cost recovery measures hurt the poor as the combination of cuts in expenditure on education, the removal of government education subsidies and the Page 3 of 12 introduction of school fees led not only to a deterioration in educational standard but also to a situation were poor parents could no longer afford to send their children to school. According to Makoni poorer communities and families end up receiving an inferior education, while some children eventually drop out of school due to inability of parents to pay user fees.
The impact of cost recovery measures in education was almost immediate as parents simply withdrew children from school or postponed sending them to school. Leon points that ESAP was ruining the countries education system, the Confederation of Zimbabwe Industries CZI commented that this would raise the drop rate and lower the quality of the future labour force.
To make matters worse cost recovery measures reinforced gender inequalities and disparities in education which the Zimbabwean government had been trying to end since It was noted by the end of a greater proportion of girls than boys were dropping out of secondary schools because families rural or urban were not able to afford school fees.
The cost recovery measures clearly disadvantaged girls, thus as school fees rose, the gender bias also escalated. The participation rate of girls declined more from when ESAP was introduced. Hence, if nothing is done to cushion such negative effects, the participation of girls will continue to be severely affected. As a result of ESAP, girls were reportedly dropping out of secondary school in Zimbabwe at As in health, a steady brain drain in the s as teachers fed up with rising prices and deteriorating living and working conditions either moved into other occupations or emigrated to South Africa and Botswana, in search for greener pastures.
This adversely affected the quality of education. The removal of subsidies and cost recovery in health resulted in people dying of curable diseases in their homes and women giving birth at homes or in scotch carts on their way to health centres.
Participation in prenatal services declined, maternal death and mortality rates of babies Born Before Arrivals BBAs have increased. Dhliwayo noted that, user fees in health services were introduced. In , the government began to systematically enforce the system of user fees for health services. This decrease implied diminished spending on drugs, extension and preventative health services, specialist facilities and treatment and other components of quality health care delivery.
In doctors and nurses began referring to "ESAP deaths," described as deaths caused by the inability of patients to pay for the minimal length of time in the hospital, or for prescription medicine. The Minister of Health, Dr, Timothy Stamps has acknowledged that only one in ten Zimbabweans can afford to pay for their own health care.
The combination of devaluation and inflation which ate into real incomes and diminishing job satisfaction as fewer patients presented themselves for treatment and drugs were increasingly in short supply led to a brain drain which saw doctors, nurses among other professionals joining the steady outward migration to neighbouring countries which offered better employment prospects.
The Zimbabwean Ministry of Health noted in , that the country had a total of 1 doctors giving a ratio of patients to doctors of 7 but because almost a third of the doctors on the register had joined the brain drain, the effective ratio is closer to 11 among the worst in the world. Privatisation is associated with higher levels of unemployment with its attendant social ills. Chakaodza states that while privatization may improve efficiency it will do so at the socio-economic and political cost of unemployment as well as depletion of needed foreign currency reserves.
Whilst the prime goal of privatization is to unload enterprises the haemorrhage public money, it is no panacea for sustainable growth in the economy of African countries.
A notable success of privatization increases the desire for innovation and expansion, as employee wages are no longer at a fixed rate, regardless of their actual productivity.
Privatisation led to income shortages to the government because of reduced sources of income. Moreover, its consequences were increased unemployment rate. Page 6 of 12 Devaluation is also another harmful condition that is common in all SAPs. It makes the exports of the borrowing country more competitive and attractive in the international markets. The deteriorating in terms of trade for primary exports meant that developing nations find themselves exporting more and more of their commodities to earn less and less from them.
Poku asserts that devaluation increases the cost of importing finished products and productive inputs necessary for economic development. For instance in , Zimbabwe could buy a tractor from abroad for approximately bales of cotton by however, the same tractor cost bales of cotton. Furthermore devaluation increases the local cost of production to an extent which may be beyond the means of small businesses which have no direct access to foreign currency through export earnings.
Dhliwayo notes that although devaluation has some notable consequences its success is that it enables imports of quality international goods and technological goods such as cell phones have dramatically increased. This is liberalization results in the flooding of the local markets by cheaper imported goods which ultimately destroy businesses whose prosperity depends on the availability of protected markets.
Richard notes that trade liberalization provides free access to capital goods and imported raw materials, it also opens the domestic market to competition from imported goods which place severe strains on local companies were feeling a negative impact of liberalization. It was reported that the number of textile companies had fallen from to by that year, while some of the major companies like Cone textiles with a local employee force of 6 were forced to close.
Also, scholars say trade liberalisation generated numerous opportunities for agriculture in Zimbabwe, because the removal of price controls has resulted in producer prices going up has benefited agricultural communities who have access to markets and the with the ability to shift into alternative cash crops according to shifts in relative prices. ESAP caused high unemployment rate because of its economic reforms.
According to Sounders about 22, public service employees have been retrenched, alongside large cutbacks in real recurrent expenditure on services. Hence conditions brought by ESAP for instance trade liberalisation and deregulation have generated numerous opportunities and gains for agriculture in Zimbabwe other than the increase in prices of imported agricultural inputs to volatility in foreign exchange Tekere Therefore, according to Tekere the removal of price controls which has resulted in producer prices going up has benefited agricultural communities who have access to markets and with the ability to shift into alternative cash crops according to the shifts in relative prices.
In addition, the emergency of seasonal price differential have also benefited those farmers with access to irrigation facilities or on farm storage and who can to wait to sell after harvest once prices have increased e.
There has been a significant growth in export crops such as cotton, floriculture, tobacco, sugar and others that has led to the creation of employment on commercial farms for rural workers who are to great extent women. Moreover, deregulation and trade liberalisation have also resulted in the emergence of small private operators particularly as middlemen and Page 8 of 12 processors.
By providing quality and cheaper maize meals products and being located close to customers in the poor communities of the country where they do not to incur transport costs, small operators have not only been successful but they have enhanced food security in areas they operate. Small scale hammer mills employed 7 permanent workers plus additional 3 causal workers.
Moreover liberalisation has also opened opportunities for small-scale producers to diversify into cash crops and an outstanding example is cotton production. Following the deregulation of cotton Company of Zimbabwe Ltd, new players entered the market increasing competition much to the benefit of cotton farmers. In conclusion, one can argue that ESAP was a failure because of many negative effects it brought to the Zimbabwean economy.
More so instead of reducing poverty it increased poverty levels also the poor people become poorer. Only few people benefited from ESAP in a shortly but at the end suffered long consequences.
However in Zimbabwe finally one can say ESAP was a failure because of its economic reforms which caused economic down turn. Third World Publications. Harare, Zimbabwe. De Beer F. Dhliwayo R. Harare, UZ Publications. Timba, J.
P , Economic Development. Zhou, G.
‘ESAP was never ideal for Zim’
The country ranked among many middle-income countries such as Turkey, Singapore, Malaysia and Nigeria while trading with the US and Europe. Notwithstanding UN sanctions, the country, at the time, had the fourth strongest economy in the world. For the first post-independence decade, the new Zimbabwean Government focused on programmes aimed at building the health and education sectors. Meanwhile, the economy continued to be run as in the pre-independence period, as a command economy. The country soon faced the ravages of droughts in the earlys that impacted negatively on growth. The drought of was followed by another in when the contribution of agriculture to GDP growth was adverse. As the drought took place, there was also a world recession that resulted in commodity export prices decreasing.
Repercussions of ESAP
The problem is compounded by the fact that it is neither the weekend nor do I see any fruitcake around. Despite these overwhelming odds we hope that together we might be able to adjust your minds structurally today. I have been asked to cover the basic issues of ESAP and will look at three main areas, namely: What ESAP actually is, including its main components; Why it was initiated; The implementation of the programme in the light of the budget and other legislation passed and about to be passed in Zimbabwe. What is ESAP?