$Unique_ID{COW04232} $Pretitle{371} $Title{Zimbabwe Chapter 3D. Transportation} $Subtitle{} $Author{Donald P. Whitaker} $Affiliation{HQ, Department of the Army} $Subject{percent african africa south year wage taxes government income total} $Date{1982} $Log{} Country: Zimbabwe Book: Zimbabwe, A Country Study Author: Donald P. Whitaker Affiliation: HQ, Department of the Army Date: 1982 Chapter 3D. Transportation Zimbabwe's transport facilities-rail, road, and air-are well developed. In 1982 they were generally adequate but in some need of rehabilitation and strengthening. Rail, air, and the better roads served primarily the modern commercial sector, the outcome fundamentally of development that was based almost entirely on economic factors (see fig. 16). A new attitude toward road construction, the transport mode in which significant change is possible, has developed since independence, in which the social requirements of the largely subsistence communal areas have been given consideration along with the economic aspects. The country's railroads have been a vital transit link in the movement of trade in southern Africa especially for Zambia and the southern mining region of Zaire. Zimbabwean lines to Mozambique also have offered the independent black states of southern Africa the means for reduced dependence on the transport facilities of white-ruled South Africa. Railroads Rail lines cover most parts of the country, the major exception being a large region made up almost entirely of African communal lands south of Lake Kariba. The main internal line runs through the highveld from Bulawayo to Harare. Branches and spurs extend from the main line to important economic centers and areas. This core network also connects with the rail system of South Africa directly through Beitbridge and indirectly via Botswana, with the rail system of Zambia (at Victoria Falls), and with lines in Mozambique that run to the ports of Maputo and Beira. Operated by an autonomous state corporation, National Railways of Zimbabwe-NRZ (formerly the state-owned Rhodesia Railways), the system in 1982 consisted of 2,734 route kilometers of 1,067-meter-gauge track, a width originally established for the South African railroads and common to the railroads of all southern Africa. With the exception of short trackage in the vicinities of Bulawayo and Harare, all lines were single track. NRZ also owned and operated the line from the Zimbabwean border through Botswana to a connection with South African Railways near Mafeking. Botswana since the mid-1970s has planned to take over this line, 640 kilometers in length, but it appeared that final acquisition might not occur until after the mid-1980s. Zimbabwe's railroads originated essentially as part of Cecil Rhodes' grand plan for opening up the interior of Africa for development in which railroads, culminating eventually in a Cape-to-Cairo line, were a major element. In the early 1890s, however, the immediate need was to provide the settlers in the territory of the BSAC with more reliable means of transporting goods and supplies than was provided by oxcarts (see Rhodes and the British South Africa Company, ch. 1). Construction of two lines to the territory, both backed by Rhodes, was started in the early part of the decade: one in 1892 from the Mozambique coast near present-day Beira, the other in 1894 from Mafeking in South Africa. In 1898 the former reached Umtali; from there it was extended to Salisbury in 1899; the latter advanced to Bulawayo in 1897. In 1902 Bulawayo and Salisbury were connected, and in 1903-1904 a line was pushed to the Zambian border, passing through the Wankie coalfields where coal mining had started in 1903. Many of the system's spurs and small branches were completed during the next two decades. The two most significant additions thereafter were the completion in 1955 of the connection with the Mozambican railroad to Maputo and in 1974 the direct connection with the South African system at Beitbridge. Beginning in the late 1960s domestic sentiment had grown for construction of the latter line because of uncertainties concerning the route through Botswana. It was not until 1974, however, when the revolution in Portugal opened the possibility of a takeover in Mozambique by a government hostile to Rhodesia-thereby threatening the outlets through Beira and Maputo-that the link was built as a security measure. NRZ suffered little direct physical damage from the guerrilla war. Tracks continued to be well maintained, but shortages of spare parts and particularly of trained personnel had resulted in a considerable number of locomotives being out of service. This situation continued after independence, and in mid-1981 less than half of the 255 effective diesel locomotives and under fifty of eighty steam engines were reported operational. In early 1981 there was a reported shortage of about 20 percent of the required highly skilled staff, and the total had risen to some 30 percent late in the year. Facilities existed for training Zimbabweans at lower level skills for railroad vacancies and such training was under way, but domestic facilities were inadequate to turn out the needed technical staff. Additional expatriate personnel had to be used and were recruited mainly from India and Pakistan. In early 1981 IBRD approved a loan equivalent to US$42 million to aid the transport sector. This included spare parts for locomotives and freight cars, machine tools, track equipment, and apparatus to maintain and improve the signaling system. The government also ordered sixty-one new diesel-electric locomotives during the year from the United States and Canada; thirty-five had been delivered by mid-1982, and the others were to arrive in August. In the 1970s about three-fifths of the 12 to 13 million tons of freight hauled annually by the railroad was for domestic use. A substantial portion of this local movement consisted of bulk goods, including agricultural products, coal, fertilizer, and iron ore. The export-import trade accounted for another third, largely comprising exports of cotton, maize, sugar, minerals, and steel and imports of general goods, fuels, and chemicals. Transit shipments of copper from Zambia and Zaire made up most of the remaining tonnage carried. After early 1976 when the lines to Beira and Maputo were closed by the independent government in Mozambique, all export, import, and transit traffic had to pass through South Africa. This changed in late 1980 when the route to Maputo was reopened after repairs; the line to Beira was reopened a year later. In late 1981 the minister of transport stated that the railroad had hauled some 13 million tons in the year ending June 30 but that the demand for rail transport was estimated at about 16 million tons. The new locomotives, the new expatriate staff, the addition of over twenty locomotives overhauled domestically for operational use, and the freeing of transport by the opening of the pipeline helped greatly to alleviate the situation. The new equipment was also expected to permit the return to South Africa of a number of locomotives on loan from that country. In late 1981 NRZ began the long-contemplated (since the late 1950s) electrification of the railroad system. The first phase, involving the line from Harare to Gweru, included electrification of about 325 kilometers of mainline track and some 120 kilometers of yard, siding, and station trackage. Assistance in the initial project has been received from Britain in the form of a loan and the guarantee of commercial credits. Thirty electric locomotives had been ordered for the Harare-Gweru section for delivery in 1983. Roads In 1982 Zimbabwe's road network totaled roughly 85,000 kilometers. About 12,000 kilometers (or approximately 14 percent) were asphalt paved. Of these roads about 8,000 kilometers were two-lane highways, and the remainder were one-lane roads. Another 46,000 kilometers (54 percent) had gravel surfaces, and the remaining 27,000 kilometers (32 percent) were earthen roads and tracks. The overall network consisted of four separate systems based on primary responsibilities for maintenance and development. A high-standard national road system of some 16,500 kilometers maintained by the Ministry of Roads and Road Traffic, which included a large part of the paved roads, interconnected the country's principal towns and the commercial farming areas. This national road system also served major development areas, such as the Hippo Valley and Triangle agricultural estates in the southern lowveld; provided access to the national parks, game reserves, and other recreational and tourist areas; and at main international border points joined up with the road systems of neighboring countries. Serving mainly the commercial farming areas was a system of secondary roads totaling some 23,400 kilometers. Consisting mostly of gravel roads, they were maintained-also to high standards-by the local rural councils. Additionally about 5,300 kilometers of roads were the responsibility of the country's seventeen self-governing municipalities within whose individual jurisdictions they lay. The fourth category of roads comprised roughly 17,000 kilometers of low-grade gravel roads and 23,000 kilometers of minor earthen roads and tracks found in the communal lands. These roads and tracks were administered by the district councils, but during the guerilla war, maintenance was almost negligible, and at independence many were in extremely poor condition. In June 1980 the government had assumed direct responsibility for 4,000 kilometers of roads in the communal areas and for another 2,000 kilometers of roads that tied networks within communal areas to the national network. Civil Aviation Scheduled domestic air service has been furnished by the national carrier, Air Zimbabwe (formerly Air Rhodesia), which has a monopoly on the main internal routes. In 1982 regular flights were made between Harare, Bulawayo, Victoria Falls (all three of which were international airports), Gweru, Masvingo, Hwange, Kariba, and Buffalo Range, the latter located in the southern lowveld and serving the irrigated agricultural area around the Triangle and Hippo Valley estates and the town of Chiredzi. There were also numerous small airfields and air strips at other towns, mining centers, and the like that were used by private charter operators providing local services, company planes, and individual pilots. In 1982 Air Zimbabwe also had international flights to London, Frankfurt, and Athens and regionally to Zambia, Malawi, Mozambique, South Africa, and Botswana. Flights to South Africa were to Durban and Johannesburg; those to Johannesburg, according to Air Zimbabwe's general manager in early 1982, were the airline's basic revenue earner. After the end of sanctions, several international and regional airlines renewed or started flights to Zimbabwe; in mid-1982 they included Air Botswana, Air Tanzania, Ethiopian Airlines, Kenya Airways, Swazi Royal Airlines, Zambia Airways, and the Mozambican national carrier, Linhas Aereas de Mocambique. Carriers based outside Africa included British Airways, Air India, Swissair, and UTA French Lines. South African Airways, which had continued flights throughout the sanction period, also furnished regular service. Foreign Trade and Balance of Payments UN sanctions appear to have had little overall effect on Rhodesia's export trade during the period 1965-79, and in real terms exports actually increased slightly. An immediate decline in the volume and value of exports occurred after sanctions began, but by the early 1970s (as measured by the export unit value index) the 1965 level had been regained, and the index rose rapidly thereafter, in 1979 being double the 1965 figure (see table 12, Appendix). In 1965 tobacco accounted for 35 percent of total exports, and food, mainly meat and sugar, for close to 11 percent. Mining products, including crude materials (asbestos, chrome ore, and others), and processed items (principally copper metal) accounted for roughly 20 percent. Certain major adjustments were forced by sanctions, for instance a decrease in emphasis on the export of tobacco, a commodity relatively easily identifiable as to source. A new stress was placed on other agricultural exports (including cotton, maize, meat, and sugar) that were like those produced in adjacent states and on mining products (including steel, ferrochrome, and nickel) that had widely used standard specifications and were also major exports of neighboring South Africa, Zaire, and Zambia. In 1965 six countries had accounted for well over three-quarters of Rhodesian exports. Zambia was then the largest purchaser of the country's goods, taking more than one-quarter of the total in 1965, and Britain took almost as much. South Africa and the Federal Republic of Germany (West Germany) were the destination of under 10 percent each, and Japan and Malawi each accounted for somewhat over 5 percent. That year more than half of Rhodesia's imports came from two countries: Britain (30 percent) and South Africa (23 percent). The United States, Japan, West Germany, and Zambia, in that order, accounted for another 20 percent. The trade pattern under sanctions still remained largely speculative in mid-1982. During that period Rhodesia turned to South Africa for greater amounts of both exports and imports, according to a study by the UN Security Council's committee on sanctions, which estimated that by the 1970s South Africa was apparently receiving about one-third of Rhodesian exports and supplying almost half of the imports. Direct trade, largely with the industrialized countries, dropped sharply in 1966 but was replaced by extensive indirect transactions that were estimated to have accounted in 1976 for 42 percent of exports that year and 59 percent of imports. Rhodesia's terms of trade-the relationship between the unit values of exports and imports-deteriorated during this time. This was explained in part by the need to offer discounts in order to sell exports and the requirement to pay premiums in order to secure imports. From the mid-1970s the terms of trade were also adversely affected by increasing world prices for petroleum. In 1981 the export pattern was substantially different from that of 1965. South Africa was the leading buyer of Zimbabwean goods, the position it apparently had held during many of the sanction years. In 1981 almost 22 percent of Zimbabwean exports went to South Africa; other recipients were West Germany and the United States (about 8 percent each), Britain (7 percent), and Italy (5 percent). The remaining exports, amounting to about half the total, were spread among other countries, each of which took no more than about 3 percent. Exports continued to be mainly agricultural products, which accounted for roughly 48 percent of total exports in 1981, and crude and processed mining products (about 35 percent). Among the latter products were steel, ferrochrome, and nickel metal, the domestic production of which had risen dramatically during UDI. In 1981 South Africa retained its position as Zimbabwe's principal source of imports, accounting for 25 percent of the total. But the rise in petroleum costs affected by the major price increases of oil in the late 1970s had made the oil-producing countries the second largest supplier-almost 14 percent of the total in 1981. Most noticeable was the drop in imports from Britain, which provided only 10 percent of imports that year. West Germany had increased its role as a supplier, and the United States and Japan had maintained their importance as sources of materials. Neighboring African states (Botswana, Zambia, Malawi, and Mozambique) collectively supplied somewhat over 7 percent, little changed from the 6 percent in 1965. A change had occurred, however, in the composition of imports. The proportion of consumer goods was only about half the 1965 total in real terms, a result largely of the development of import substitution during UDI. Petroleum products accounted for close to 20 percent of import costs; the need to allocate foreign exchange to petroleum had resulted in reduced imports of intermediate products. Exports grew during the 1970s at an average annual rate exceeding that of imports. Government restrictions on imports generally helped to produce visible trade surpluses, which met most of the deficit that regularly characterized invisible transactions (services, investment income, and financial transfers). As a consequence, the current account of the balance of payments (the summary in money terms of the country's transactions with the rest of the world) was usually relatively close to a balance. In the cases where the current account was negative (most years from 1965 but in a very moderate amount until 1974), net capital transactions ordinarily covered the deficit, and the overall balance of payments fluctuated moderately between surplus and deficit. Negative factors from the early 1970s included the rise in remittances abroad of investment income and from the mid-1970s an increase in travel as emigration accelerated. Private transfers of funds abroad also rose sharply after 1974 and, although subsequently restricted by controls, remained at a level higher than before 1974. The current account was sharply in deficit in 1974 and 1975 as services and transfer deficits jumped, but large private borrowings of capital in both years held the overall balance to reasonable deficits. The situation was improved from 1976 to 1979 by greatly increased trade surpluses, and in 1978 and 1979 there were substantial balance of payments surpluses (aided by government borrowing in both years). In 1980 financial transfers abroad rose sharply, as did travel costs. Merchandise goods exports declined, and for the first time since 1968 there was a trade loss. Although more than offset by gold transactions, the total was insufficient to meet greatly increased financial transfers and travel costs, and the current account had the largest deficit on record (Z$156.7 million). Capital flow, although considerable, did not meet the shortfall, and the overall balance of payments was strongly negative (see table 13, Appendix). A large balance of payments deficit for 1981 was reported without detail in mid-1982. The trade balance that year was unfavorably influenced by a decline in world commodity prices, by the inability to export available goods because of domestic transportation bottlenecks and shipping inadequacies at the ports of Maputo and Beira, and by transportation problems reported in South Africa. At the beginning of 1980, foreign reserves held by the Reserve Bank of Zimbabwe were about Z$200 million. They began declining late in the year and by September 1981 totaled only Z$145 million-equivalent to the cost of about two months' imports. Zimbabwe has sought external aid, and in March 1981 at the Zimbabwe Conference on Reconstruction and Development (usually referred to as ZIMCORD) some Z$903 million was pledged by a large number of Western, Middle Eastern, and Asian countries. Among Communist states, only China and Yugoslavia contributed. Before the conference Z$260 million already had been donated, making the overall total nearly Z$1.2 billion. The largest donors were units of the World Bank (see Glossary), Britain, and the United States. About half the amount was in the form of grants, the remainder in loans. A large part of the funds was to be used for development projects during a three-year period, but the three-year plan to which most funds were committed had not yet been published in mid-1982. Employment, Income Distribution, and Prices In the late 1970s the country's work force, according to a World Bank estimate, totaled roughly 2.7 million. A projection by the International Labour Office estimated a work force in 1980 of somewhat under 2.5 million. About half the actual work force was believed to be engaged in subsistence agriculture. Regular wage-earning workers-for whom figures considered reasonably accurate were available-were just over 1 million in 1980. In addition perhaps another 100,000 individuals worked for wages as casual, seasonal, or contract laborers. Of total regular employees about 88 percent were Africans, and the remainder were whites and a small number of Asians and Coloureds (see Demography, ch. 2). In the late 1970s (since 1979, official figures on employment have not given racial breakdowns) about 38 percent of African wage earners were employed in agriculture, 14 percent in manufacturing, and 6 percent in mining. Close to 14 percent were in domestic service, but this proportion may have declined since 1979 as the result of white emigration. Another 6 to 7 percent were in distribution activities and in the hotel and restaurant trades. Relatively small numbers were employed by the other sectors. Almost half of the non-African wage earners were accounted for by three sectors: manufacturing, the distribution and hotel and restaurant trades, and public administration; each sector employed roughly 16 percent of the wage earners. In addition approximately 12 percent of non-African wage earners were in transportation and communications. The remainder were engaged in smaller proportions in the other areas of industrial activity, including under 5 percent in agriculture and under 4 percent in mining. About half of all regular wage earners have been employed by agriculture and manufacturing. There has been a major shift in relative shares between those two sectors since UDI, but their combined share of total employment has remained constant. In 1965 agriculture provided 39.5 percent of wage employment, and manufacturing represented 10.8 percent (see table 14, Appendix). In absolute numbers agricultural workers reached a peak in 1974, but because of higher rates of growth in other sectors, agriculture's share of overall employment had fallen to 35.2 percent. Manufacturing, which had grown at a faster rate, accounted for 14.5 percent that year. After 1975 a decline in agricultural employment began and by 1980 agricultural workers made up only 32.4 percent of overall employment. The number of manufacturing workers had also declined from 1976, but recovery had occurred in 1979, the result (at least in part) of the prospects for peace. In 1980 this upward movement continued, and manufacturing's share of employment reached 15.8 percent. A new peak was registered in 1981, and preliminary indications were that workers in manufacturing accounted for close to 17 percent of total wage earners. Included in the wage-earning force were a substantial number of non-Zimbabweans, most of whom were from neighboring Malawi, Mozambique, and Zambia. They were estimated to number 198,000 in 1976 and over 183,000 in 1979. A large proportion consisted of agricultural workers, as indicated by figures available for the period 1970-75 that showed an annual average of 118,000 farm wage workers to have been foreigners. During this time they constituted a third of the farm work force. At the same time, a considerable but unknown number of Africans from Rhodesia were employed in other countries. Until 1982 they included individuals officially recruited by South Africa's Employment Bureau of Africa (TEBA) mainly for work in that country's gold mines. The number secured by TEBA varied, as indicated by the total of 8,622 in 1975 and 32,453 in 1976. In early 1981 the Zimbabwean government banned further recruitment by TEBA. South Africa reacted by refusing to renew work contracts and permits of Zimbabweans, and repatriation began in 1981 of the officially registered approximately 20,000 in South Africa. Marked differences characterized the cash wages received by Africans and non-Africans at independence. These related in part to the nature and level of work but were mainly caused by restrictions both on job opportunities for Africans and on the amount of wages paid them. The vast majority of African wage earners were unskilled. In 1976 about 50,000 in urban areas were estimated to have been in the semiskilled category (clerks and others at that level), and about 10,000 were skilled (artisans, professionals, and administrators-none of whom were permitted to advance to the top levels). The degree of difference between African and white wages varied by sector. In health services, for instance, the white average wage was three times greater than that paid Africans and three to four times higher in finance, insurance, and real estate. (It should be noted that the number of African employees in these sectors was very small by comparison with the overall total of African wage earners.) In agriculture, the largest employer, the wage difference was more than twenty-six times greater, and in manufacturing seven times (compensation in the form of subsistence would reduce the ratio somewhat in agriculture). The overall annual average wage was over ten times greater for non-Africans (see table 15, Appendix). Within the African wage-earning population there were also significant income differences between sectors; for instance, employees in finance and related areas received average annual wages almost twice those of manufacturing employees and four times those of agricultural workers. The latter, who constituted 38 percent of all African wage employees, received only about 40 percent of the overall average wage; domestic servants also received less than the average. The African wage sector itself was set apart as a whole from the subsistence sector, individuals working for wages having average incomes seven to eight times greater than the average subsistence income. A study carried out during 1973-74 to determine the minimum consumption needs of urban African families, that is, to determine the poverty datum line, concluded that in 1974 the line was between Z$660 and Z$670 a year. In that year the average annual wage of African workers (excluding farm workers) was Z$556, and almost 80 percent of urban wage earners had incomes below the poverty line. Independence brought expectations among the African work force that wages would be increased, and in May 1980 the government published an official series of minimum wages for different employment groups. Before, individual minimums had been established within all sectors on an annual basis through agreement between representatives of the employees, employers, and the government. The new minimums grouped workers into three categories: urban, agricultural and domestic, and mining. Effective July 1980 the minimum wage for urban workers was Z$70 a month; it was increased to Z$85 at the beginning of 1981. The minimum wage for agricultural and domestic employees was fixed at Z$30 a month, but no increase was set for 1981. The minimum rate for mining workers took into consideration noncash wages estimated at Z$27 a month and established an inclusive figure of Z$43 from July 1980 and Z$58 beginning January 1981. Some wages already exceeded the new minimums, but in agriculture the new minimum represented a substantial increase from the rate of slightly more than Z$20 that existed at the time. The government contended that the new urban minimum exceeded wages paid by 80 percent of the country's industries and stated that the minimums were only an interim measure. In December 1981 the government announced a further step to reduce the income gap between "rich and poor" that included raising the urban worker minimum wage for industrial (mine workers were included) and commercial workers to Z$105 a month and that for farm and domestic workers to Z$50 a month, both effective at the beginning of January 1982. Ceilings were also set on wage increases-these largely affected non-African workers-based on annual income groupings and permissible percentage increases within each group. In the group having an annual income up to Z$1,200, an increase of up to 23.5 percent was permitted. The percentages decreased as annual incomes increased, and from Z$20,000 upward no raise was allowed. The government also declared that dismissals of workers because of the new minimums were not permitted without the approval of the minister of labor and social welfare services. Inflation was not a major problem during the UDI period. In the first five years the urban consumer price index for the lower income group rose at an annual average rate of 1.9 percent and for the higher income group at a rate of 2.6 percent. For the next five years the average inflation growth rate for both was somewhat over 5 percent. Principal reasons for the low increases were believed to be government price controls during the time and the relatively small size of the buying population. Under the conditions imposed by sanctions, attitudes appear to have been very cooperative, and shortages were not reflected in demand pressures. From 1975 to 1979 inflation gradually increased, however, and in 1979 the lower income price index rose by 13.7 percent and the higher by 11.3 percent. But in 1980 both indexes showed declines, in particular that of the lower income group, for which the inflation rate for the year was only 5.4 percent. Indications were that inflationary pressures had actually continued and that government actions after independence, including major reductions in school fees and hospital charges plus reductions in some sales and excise taxes, had been mainly responsible for the drop. Such items as school fees had less impact on the higher income group. This group was also adversely affected by the increase in wages of domestic servants during the year, and although the inflation rate declined, it averaged 9.2 percent for the year. In 1981 the rate jumped for both groups, rising to 13.2 percent for the lower one and 14.6 percent for the higher one. In September the government took steps to curb increases in the money supply, a major factor in the inflationary rise. This was followed in mid-December by a three-month price freeze on all goods and commodities, during which a new overall price control system was to be developed. In March 1982 the freeze was extended to the end of April when the new system was introduced. Government Finance The budgets of the preindependence period were formulated primarily on the basis of modern sector operations, from which most recurrent revenue was derived. Recurrent expenditure was strongly skewed toward that sector and disproportionately favored the non-African population. The largest sources of revenue were personal and company income taxes and sales taxes. Income taxes were derived almost entirely from the non-African population (in fiscal year 1976-77 [FY-see Glossary] for instance, some 94,500 non-Africans paid 98.6 percent of total personal income taxes and Africans 1.4 percent). Sales taxes, however, had a substantial impact on the much poorer African population despite the fact that certain basic foods-bread, maize meal, meat, and milk-were exempted. In the early 1970s income taxes accounted for about 55 to 56 percent of recurrent revenue and sales taxes for 16 to 17 percent. (Excise taxes, mainly on beer, liquor, wine, and cigarettes, provided another some 9 percent.) As the war expanded in the 1970s, additional revenues were needed, and in FY 1974-75 a 10-percent surcharge was placed on income taxes; during that year war costs required about 18 percent of total budget expenditure (see The Civil War, ch. 1). The following year, FY 1975-76, no tax increases were projected, but by early 1976 spending requirements led to a doubling of the sales tax to 10 percent and increases in excise and certain luxury goods taxes. The sales tax was again raised-to 15 percent-in early 1977, and projected costs of the war for FY 1977-78 were 26 percent of total expenditure. As of 1978, however, no direct increases in income taxes had been made. But in FY 1978-79 a 12.5-percent levy (a three-year "national defense loan") was made against incomes on which Z$100 or more in taxes had been paid the previous year. Meanwhile the impact (especially on the African population) of increased sales taxes was evident in the 31 percent share of sales taxes in total tax revenue that year (excise taxes constituted another 7 percent) and the relative decline of income taxes to about 52 percent (see table 16, Appendix). The budget had been roughly in balance at the beginning of the 1970s, and only moderate deficits were recorded until the middle of the decade when rapidly growing defense expenditures and increases in grants and subsidies outstripped revenue receipts. Among the subsidies were large amounts paid to white commercial farmers in support of production for the export market. Little if any benefit from the subsidies accrued to the domestic, overwhelmingly African, consumer public. Meanwhile the percentage share of social services in recurrent expenditure decline from over 27 percent of total expenditure in 1975 to about 21 percent in 1978; the education-health component dropped from roughly 25 to 18 percent. Services for the African population mainly bore the brunt of these reductions. It was only under the Zimbabwe Rhodesia government of Prime Minister Abel Muzorewa that war costs began to consume an inordinate share of the budget. In FY 1979-80 outlays for defense were projected at 37 percent of budgeted expenditure (estimates were increased in late 1979 to 41 percent in a supplementary tax measure), and there was little in the budget to provide the cheaper education and health services anticipated by the African electorate nor much in the way of funds for better housing and rural development, although some increases were included for education and housing. A large budget deficit was projected, but the internal settlement had led to hopes that defense and security costs could be reduced if peace came and that if sanctions were lifted, an economic upturn would produce larger revenues. The government decided to finance the deficit by domestic and foreign loans rather than new taxes. The national defense loan levy was dropped as a measure of relief for the non-African taxpayer, but at the same time, substantial reductions were made in the subsidies to white farmers and to government corporations. The minister of finance called for general restraint on living expenditures, and African teachers, who had been given a pay raise, were asked not to press their demand for wage parity, for which funds were not available. The African reaction to the budget was perhaps best expressed by one of the African government ministers when he described it as "a white man's budget." In April 1980 the new government of Robert Mugabe announced almost immediately on assuming office the implementation of part of the fiscal measures it had promised the African electorate during the 1980 election campaign (see Parliamentary Elections of 1980, ch. 4). The retail sales tax was reduced from 15 to 10 percent on almost all items, and additional basic foods (including cooking oil, margarine, sugar, and tea) were completely exempted from the tax. In part to offset the resulting loss of revenue, excise taxes were increased on cigarettes, beer, and liquor, and the income surtax, which had earlier been reduced to 5 percent, was again raised to 10 percent. In July it was announced that primary education would be free beginning with the August 1980 term and, that in the case of private primary schools, government grant would be made to permit the remission of fees. From September free health services were instituted for workers who made less than Z$150 a month (this included the vast majority of African wage earners). These two measures required substantial increases in budgetary allocations for FY 1980-81. Actual expenditures showed increases over the previous year of 45 percent for health and 75 percent for education (see table 17, Appendix). A large increase was budgeted for the acquisition of land, resettlement, and rural development (almost 54 percent above the 1979-80 expenditure); but delays in the resettlement program slowed implementation, and actual expenditure was under two-thirds of the budgeted amount. The end of the war brought reduced spending for defense and, although this item remained the largest in the budget, actual expenditure declined by almost 13 percent from the year before. The FY 1981-82 budget emphasis was similar to that of the first Mugabe budget, i.e., on education, health, resettlement, and rural development. The appropriation for education was 31 percent larger than actual expenditures in 1980-81, and projections for health were 41 percent above those of the year before. The appropriation for land acquisition, resettlement, and rural development was 1.5 times greater than that of the previous year and well over 2.5 times the actual expenditure in that year. An expansion of the armed forces resulted in increased spending, which at a projected total of over Z$280 million was the largest budget item; education was a close second at Z$272 million. To help finance the anticipated large budget deficit, a main recourse was increases in indirect taxes. These included a rise in sales taxes from 10 to 15 percent on selected items and a general increase on others from 10 to 12 percent; the introduction of a 30-percent capital gains tax; a 5-percent surcharge on customs duties; and increases in taxes on dividends. These new levies affected mainly the non-African population, although the general sales tax increase was also significant for Africans. No increases in either personal or company income taxes were made. In spite of the government's socialist goals, its tax programs were not intended to be confiscatory, nor were they intended to harm the private sector. Although a greater share was to be assessed against wealth and nonessential spending, the tax burden was still to be spread widely so that everyone would be aware that nothing "was for free," according to the finance minister. The objective was not to bring everyone down to a lower standard of living but to reduce inequality by raising incomes of the poorer sector. * * * Studies available up to 1982 on the country's economy consist mainly of sectoral or specific area works. Two wider ranging sources include Rhodesia: Economic Structure and Change, edited by G.M.E. Leistner, which offers some background on the economy before UDI and a more detailed presentation of the period from 1965 to 1974, and John Handford's Portrait of an Economy: Rhodesia under Sanctions, which incorporates statistical information on the UDI period and varying amounts of history on earlier sectoral developments. Among broader sectoral works is I.M. Hume's A Strategy for Rural Development and Whitsun Data Bank No. 2, essentially collation-with minimal analysis-of statistical materials on the peasant sector, for which much of the data is widely scattered. The mining sector is covered in a comprehensive report, Zimbabwe, prepared by the United States Bureau of Mines. Anthony H. Croxton's Railways of Rhodesia recounts in journalistic fashion the development of the railroads. The all-important matter of land is succinctly discussed in The Land Question by Roger Riddell. Available information on the economy since independence has been confined mainly to materials in the Monthly Digest of Statistics of the Zimbabwe Central Statistical Office. The new government's economic objectives and the policies to be pursued to obtain them appear in Growth with Equity; the problems faced and the program for development are contained in the ZIMCORD Conference Documentation. (For further information see Bibliography.)