Zimbabwe is a former British colony; it was known as Southern Rhodesia during British rule, and was established in 1890. Gold discoveries sparked an influx of white farmers, mostly from Britain and South Africa. The most powerful of the gold seekers was Cecil Rhodes (after whom Rhodesia was named), the eccentric owner of the De Beers mining company, which he had bought for its diamond concessions in Africa. The massive migration of white Europeans and land acquisition by these groups produced economic and political consequences still reverberating in the country more than a century later.
In 1953, Southern Rhodesia was united by the British government with Northern Rhodesia (present-day Zambia) and Nyasaland (present-day Malawi) into a Central African Federation, against opposition from Africans in all 3 regions. Due to the strength of African opposition in Northern Rhodesia and Nyasaland, the Federation was disbanded in 1963. Whites in Southern Rhodesia formed the Rhodesia Front (RF), dedicated to upholding white rule and demanding full independence from the United Kingdom and the retention of the existing minority-rule constitution. Prime Minister Ian Smith introduced a Uni-lateral Declaration of Independence (UDI) in November 1965 and renamed the territory "Rhodesia."
African nationalist opposition had split in 1963 into 2 resistance groups: the Zimbabwe African People's Union (ZAPU), led by Joshua Nkomo, and the breakaway Zimbabwe African National Union (ZANU), led by Rev. Ndabaningi Sithole and later Robert Mugabe. Repressive measures by the Smith government galvanized ZAPU and ZANU into a guerilla (non-conventional, stealthy) war to overthrow it. ZAPU's operations, based in Zambia and backed by the Soviet Union, were mainly confined to majority Ndebele areas. ZANU, on the other hand, linked with the People's Republic of China and a guerilla group fighting the Portuguese in Mozambique. They concentrated on infiltration and rural mobilization in Shona-speaking areas in the northeast, and later in eastern and central areas of the country.
From 1976, a common struggle was waged under the banner of the Patriotic Front (PF), an uneasy alliance of ZAPU and ZANU, backed by neighboring African states. This struggle, coupled with international economic sanctions (with the exception of South Africa), led to declining white morale, forcing the Smith regime into the 1979 "Internal Settlement"—a multi-racial government under the leadership of Bishop Abel Muzorewa, a Methodist minister and black nationalist. This paved the way for all parties to the conflict to participate in talks which led to the February 1980 elections and the emergence of the independent state of Zimbabwe on 18 April 1980.
In the elections, Mugabe's ZANU-PF won 57 of the 80 "common-roll" (reserved for black Africans) seats in the house, receiving 63 percent of the vote. Nkomo's ZAPU-PF won 20 and Bishop Muzorewa's United African National Council (UANC) won 3 seats. Mugabe's ZANU has retained power in Zimbabwe ever since.
The constitution of the Republic of Zimbabwe took effect at independence. Amendments to the constitution must have the approval of two-thirds of the members of the House of Assembly, the country's unicameral (single chamber) parliament. The executive president (Mugabe) is both head of state and head of the government, as is the U.S. president. The House of Assembly has 150 members, of whom 120 are directly elected by universal adult suffrage, 12 are nominated by the president, 10 are traditional chiefs, and 8 are provincial governors.
In 1997, government expenditure was 36 percent of GDP, which is high by African standards. Government revenue was 31 percent of GDP, and the budget deficit was 5.1 percent of GDP, significantly above the International Monetary Fund (IMF) guideline of 3 percent. Subsequently, the deficit has been substantially above this level, the money supply has expanded rapidly, and the rate of inflation has accelerated.
Corporate tax rates are moderate at 37.5 percent, although the government discriminates against foreign corporations by imposing an additional 8.4 percent. Most government revenue is raised from taxes on income, profits, and capital gains (45 percent). Taxes on goods and services generated 26 percent of revenue, trade taxes on exports and imports garnered 19 percent, and other nontax income (mainly licenses and surpluses of state-owned enterprises) accounted for 9 percent.