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By the late 1970s, Rhodesia was at war. Armed insurgents moved through the countryside, targeting infrastructure and isolated communities, including farms in rural areas, while government forces struggled to contain a conflict that was spreading beyond their control. What had begun as a contained security problem was turning into something far more difficult to manage. The fighting was not limited to remote areas. It placed constant pressure on the state and exposed weaknesses that had not been obvious before.
Operation stretched resources, strained authority, and created uncertainty about how long the government could maintain control. The sense of stability that had defined the country only a few years earlier was beginning to erode. And yet, not long before this, Rhodesia had been one of the most developed nations in Southern Africa. Its economy was supported by agriculture and natural resources, and it maintained the appearance of long-term strength. That contrast raises the central question.
How did a country that looked secure reach this point? And what decisions set it on that path? Let's find out why. Why did Zimbabwe's world-class economy collapse? Who was responsible? How did society and government change? What is Zimbabwe's economic status today? Hello, I'm Colin Heaton, former history professor, Army Marine Corps veteran, and welcome to this episode of Forgotten History. Beginning of the toughest 26 days in Marine Corps history. With confidence in our armed forces. 36th President of the United States died this afternoon. There are children and women in here. They call it off.
Rhodesia's economy before 1979 was one of the more developed in sub-Saharan Africa with advanced commercial farming, mining, and manufacturing and set on top of a racially exclusionary labor and land system. During the Federation years from 1953 to 1963, Southern Rhodesia benefited from a larger regional market and saw manufacturing output surge. Northern Rhodesia became Zambia in 1964 because African nationalist pressure and British decolonization broke apart the Federation of Rhodesia and Nyasaland.
Southern Rhodesia just became Rhodesia, which later became Zimbabwe in 1980. After Rhodesian Prime Minister Ian Smith's unilateral declaration of independence in 1965, UN sanctions hit trade, but the economy did not collapse. Instead, support substitutions, controls, and sanctions busting kept production going for a time. Rhodesia had business partners throughout Africa, including South Africa, and produced materials in great demand. Rhodesia had strong growth through the late 1960s and early 1970s, then stagnation and decline as war costs, capital shortages, external pressure, and structural limits caught up.
Rhodesian currency changed from the pound used from 1964 to 1970 to the Rhodesian dollar used from 1970 to 1980, replacing the pound at $2 to £1. A World Bank cited historical table gives these selected figures for GDP at factor cost. In 1965, the GDP was 737 million Rhodesian dollars in 1974, 1.859 billion dollars, and in 1979, 2.627 billion. But at constant 1965 prices, GDP went from 737 million in 1965 to 1.357 billion in 1974, then fell back to 1.187 billion in 1979. The population rose from 4.5 million to 6.1 million, then to 7.2 million over those same years.
Manufacturing was 25% of Rhodesia's GDP exports. White-owned commercial farms dominated the best land and produced export crops, such as tobacco, along with maize, cattle, and other products, while black rural areas far poorer and less productive because of policy and land allocation. Mining also helped Rhodesia survive sanctions. Chrome and other minerals could find buyers in Europe and North America, especially for military purposes, helping shore up the economy despite restrictions. That is one reason sanctions were painful, but not decisive on their own. Ian Smith had led Rhodesia's white minority government after the 1965 unilateral declaration of independence. But by the late 1970s, Rhodesia was under heavy military pressure from
nationalist guerrilla forces, communist groups such as Mugabe's ZANU party and its paramilitary terrorist wing ZANLA, and Joshua Nkomo's ZAPU with its terrorist militant arm ZIPRA, while sanctions and diplomatic isolation kept squeezing the regime. The civil war was called the Rhodesian Bush War or the Zimbabwe War of Liberation, depending upon the source. It was a three-sided struggle between the Rhodesian state versus two rival nationalist armies supported by communist that also distrusted and fought each other. Ian Smith was defending a system of white minority rule while African nationalist movements were fighting for majority rule and independence.
The political crisis sharpened after Rhodesia's unilateral declaration of independence from Britain in 1965, which entrenched minority rule and deepened isolation. The war ran from the mid-1960s to 1979-80. ZANU marked the start of the armed struggle in April 1966. Through 1978 to 79, Smith tried to preserve white influence through the internal settlement, which created the short-lived state of Zimbabwe-Rhodesia under Bishop Abel Muzorewa. That did not bring internal recognition or end the war, so it failed as a lasting solution. The real turning point was the Lancaster House Conference in London.
The agreement was signed on December 21st, 1979 by Britain, the Muzorewa government, and the Patriotic Front leaders Mugabe and Nkomo. It ended the Rhodesian regime, restored the territory temporarily to British authority, set a ceasefire, and required free elections under British supervision. After that, Lord Soames became governor during the transition. Smith was no longer running an independent Rhodesian state. Elections were then held in February 1980, and Robert Mugabe's ZANU party won a majority. When Zimbabwe became internationally recognized as independent on April 18th,
1980, Mugabe became the country's first prime minister. While the elections I held, and the people voted us into government, which they will do, Britain then leaves the country, then we are we come face to face with South Africa. And in no circumstances, South Africa can easily move to surround our assembly points and the surround our forces therefore. Regarding the former Rhodesian military, Mugabe's public line was reconciliation and rapid integration into one national army. In his March 4th, 1980 speech, he said the country's forces should be integrated as soon as possible into a single national army with General Peter Walls working alongside Zanla and Zipra commanders. In practice, this meant he did not try to liquidate the
entire old Rhodesian military overnight. He kept some former Rhodesian structures and personnel because he needed order and technical competence. Even though Mugabe's nationalist rhetoric during the war had threatened retribution, the new government retained black troops from the old Rhodesian army, especially the Rhodesian African Rifles, because they were militarily useful and helped prevent Mugabe from facing an immediate challenge from rival nationalist who did not consider Mugabe communist or ruthless enough to get the job done.
Mugabe was pragmatic and he kept the military he had once denounced because they were useful to state consolidation and security. But there was an exception, the Selous Scouts, the most successful anti-terrorist military unit in history when compared to their brief history, operational success, and kill-to-loss ratio against terrorist. This is where the gloves mostly came off. Mugabe viewed the Selous Scouts as uniquely tainted, which he tied to pseudo operations, infiltration, assassinations, and dirty war methods to be treated as a normal legacy regiment.
Their effective counterterrorism methods were highly successful. He publicly disbanded the Selous Scouts in April 1980, but evidence indicates that some former Selous Scouts were retained inside the new Zimbabwean National Army and became the core of the elite parachute formation. So, Mugabe's position was not forgive and forget. It was more like destroy the brand, keep selected capability. Mugabe was also strikingly pragmatic at first regarding the former Rhodesian Central Intelligence Organization. The new government retained Ken Flower as Director General of the CIO, and former Rhodesian intelligence operatives remained in place during the
transition. It was retained and functioned as both an intelligence service and a political security instrument. Mugabe knew that he could not create a new viable intel network. After taking power, Mugabe came to view ZAPU and ZIPRA as a political and military threat. By 1982, Joshua Nkomo was expelled from government, senior ZIPRA figures were arrested, former ZIPRA fighters deserted, and Mugabe's government escalated into the Fifth Brigade campaign in Matabeleland. Mugabe purged his ranks of his former communist rivals, much like Hitler and the SS removing the SA in the Night of the Long Knives, and Stalin's purges of those he no longer needed. At independence in 1980, Zimbabwe did not inherit a ruined economy. It began
Mugabe's rule with a diversified base in agriculture, mining, manufacturing, transport, and commercial services. When Mugabe came into power, employment numbers were very good and the money kept coming in. Even the Reserve Bank of Zimbabwe and the World Bank described the 1980 to 1997 as a relative stable period compared with what followed. But Zimbabwe's economic crash under Mugabe was inevitable and started in a slow decline in the 1980s and 1990s, then a full-blown collapse in the 2000s. The economy began declining as growth weakened, unemployment rose, and fiscal policy became increasingly unsustainable.
One problem was Mugabe's communist ideology and policies against white farmers. At independence in 1980, Mugabe did not immediately begin mass confiscation. The Lancaster House settlement constrained land reform for a period and pushed Zimbabwe into a willing buyer, willing seller system, meaning the government had to buy land rather than simply seize it. Land redistribution existed in the 1980s and 1990s, but it was slower and more legally structured than what became later. His policies were about taking white-owned commercial farmland, which was very productive, and redistributing it. First, slowly through legal purchase, then aggressively through coercion, compulsory acquisition, and tolerated or encouraged farm invasions,
and threat of or even the use of violence. The big shift came in the late 1990s, and especially from 2000 onward. Mugabe's government revised the legal framework to make compulsory acquisition easier. Now, they could simply steal the land. An International Monetary Fund report on Zimbabwe's 2000 consultation states that in April 2000, the government passed a constitutional amendment allowing compulsory acquisitions, or theft. There is enough land in the country, and out of 12 million hectares, what we want about half of that, 5 million plus. And they only 40 4,000 farmers own 12 million hectares of the most fertile land in the country. Why can't they agree to 5 million plus coming our
way. The Human Rights Watch report says the government also amended legislation to steal commercial farms without compensation. Then came the fast-track land reform program. This was the real hammer blow. Well, I didn't uh actually intimidated him, but I told him that we have come to occupy your farm. Uh maybe somebody can say it's intimidating, but it's I was telling him that we are here now to occupy the farm. Instead of orderly redistribution, it moved rapidly through state-backed or state-tolerated occupations of mostly white-owned commercial farms.
Human Rights Watch documented violence, intimidation, assaults on white farm owners, attacks on farm workers, and police failure to protect victims during the attacks and occupations. Mugabe publicly justified these policies as correcting colonial land injustice. That grievance had some merit, as white farmers had long controlled a disproportionate share of the best agricultural land. But, then again, it was the white farmers who made Rhodesia wealthy with their knowledge and modern farming methods. Mugabe's land reform accelerated the theft of farmland from the white minority to blacks, a process that was often violent and chaotic.
What was not widely reported were the attacks against the black farm workers who made a good wage and joined their white farmers and employers to resist the seizures. As a result, the production of sellable commodity stopped, and food production ground to a halt. Although the policy was framed as justice for the landless, many seized farms went to politically connected elites, military figures, or ruling party insiders, rather than ordinary poor farmers with little or no farming experience. Mugabe then staffed his government with friends and political cronies, few of whom had the formal education or capacity to understand the complexities of running a government, let alone managing the economic requirements to maintain sustainability.
The 1997-1998 period was a major turning point. Mugabe's government announced large unbudgeted payouts to war veterans in 1997, and by 1998, Zimbabwe had also intervened militarily in the Democratic Republic of the Congo. The DRC intervention and the loss of international aid as factors further weakened an already troubled economy. IMF reporting from the 2000 consultation also describes fiscal problems and notes the DRC conflict from August 1998 onward as part of the backdrop to Zimbabwe's worsening macroeconomic situation. Economically, the policies were disastrous in the short to medium term.
The IMF says the land reform process, together with weak institutions and expansionary macroeconomic policies, helped drive the collapse in investment, productivity, and agricultural production. It also notes that uncertainty around land reform led banks to sharply reduce agricultural lending. In just a few years, Zimbabwe dropped from being a wealthy, industrialized, first-world nation to a starving third-world status. By 2000 and beyond, the wreckage was complete. As through 2008, per capita real GDP declined by half, and the economy was in freefall.
The IMF estimated that real GDP fell 14% in 2008 on top of a 40% cumulative decline during 2000 to 2007. It also reported that government revenue collapsed from about 25% of GDP in 2005 to only 4% of GDP in 2008 while public services imploded including water, rail, and electricity systems. That marks the point where the state begins to come apart at the seams. The most famous part of the crash was hyperinflation. The IMF's 2009 report says 12-month CPI inflation peaked in September 2008 at almost 5 billion percent.
The local currency effectively vanished from normal use. The barter system was then used. The banking system also shrank sharply as deposits evaporated in real terms. Zimbabwe ended that phase only by effectively abandoning its currency and dollarizing in early 2009. The IMF states that since February 2009 Zimbabwe adopted hard currencies for transactions and that with the demise of the Zimbabwe dollar hyperinflation stopped. The IMF's 2022 review adds that the budget deficit fell to about 2% of GDP on average during 2009 to 2015 down from 34% during 2004-2008 and that the early dollarization years brought recovery and low inflation.
But dollarization did not solve the structural problems. The economy recovered somewhat in the early 2010s yet the IMF says output remained below the 1998 peak while weak investment, unresolved land tenure problems, debt arrears, and later climate shocks held the country back. By 2017 the IMF was again warning that fiscal imbalances, domestic borrowing, cash shortages, quasi currency instruments, and falling investor confidence had become unsustainable. Today Zimbabwe lives on a sparse domestic economy and foreign aid and is in worse shape than South Africa in many ways. See our video on South Africa's decline following the presidency of Nelson Mandela.
It would seem that both nations followed a self-destructive path using socialism as their method with no end in sight. Thank you for watching this episode of Forgotten History. If you liked what you saw, please click like, share, and subscribe. And if you would like to assist with the ever-increasing cost of production, please consider becoming a channel member and joining our Patreon page.
