The Rhodesian State, Financial Policy and Exchange Control, 1962-1979
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Financing Rebellion: The Rhodesian State, Financial Policy and Exchange Control, 1962-1979 By Tinashe Nyamunda SUBMITTED IN FULFILMENT OF THE REQUIREMENTS IN RESPECT OF THE DOCTORAL DEGREE QUALIFICATION IN AFRICA STUDIES IN THE CENTRE FOR AFRICA STUDIES IN THE FACULTY OF THE HUMANITIES, AT THE UNIVERSITY OF THE FREE STATE NOVEMBER 2015 Supervisor: Prof. I.R. Phimister Co-supervisor: Dr. A.P. Cohen Declaration I declare that the thesis hereby submitted by me for the Doctor of Philosophy Degree at the University of the Free State is my own independent work and has not previously been submitted by me at another university or institution for any degree, diploma, or other qualification. I furthermore cede copyright of the dissertation in favour of the University of the Free State. Signed:……………………. Tinashe Nyamunda Bloemfontein Dedication My wife Patience Mukwambo Nyamunda. My sons, Jamie T. Nyamunda and Christian K. Nyamunda. Without whom I can’t be. Table of Contents Page Abstract ................................................................................................................................ i Opsomming .......................................................................................................................... ii Acknowledgements ............................................................................................................. iii Acronyms ............................................................................................................................. v List of Tables ..................................................................................................................... viii Chapter One: Introduction ................................................................................................. 1 Themes and Concepts: The Rhodesian State, Finance and Economy ............................... 5 Historiographical Review .................................................................................................... 9 Methodology ..................................................................................................................... 16 Chapter Outline ................................................................................................................. 19 Chapter Two: From Accommodation to Challenge: Sterling Imperialism, Settler Colonialism and Southern Rhodesian Financial Arrangements, 1890-1962 .................. 23 Introduction ..................................................................................................................... 23 Establishment and Operation of Southern Rhodesia’s Financial System, 1890-1945 ..... 24 Sterling Recovery: The British Discriminatory Sterling Network and the Politics of Southern Rhodesia’s Financial Economy, 1945-1958 ....................................................... 30 Finance and the shift to the Right, 1958-1962 ................................................................. 50 Conclusion ......................................................................................................................... 55 Chapter Three: Federal Dissolution and Financial Reconstruction, 1962-1965 ............. 57 Introduction ...................................................................................................................... 57 The Political Economy of Finance and Race in Southern Rhodesia .................................. 58 Federal Dissolution and the Crisis of Rhodesia’s Independence ...................................... 63 Liquidation of Federation and the Birth of Rhodesia ....................................................... 70 ‘No more independent than the money that is in your own pocket’: Colonial Financial Reconstruction and Constitutional Stalemate .................................................................. 75 Conclusion ......................................................................................................................... 94 Chapter Four: ‘Going it alone’? Financial Policy and the Rhodesian Economy under British Sanctions, 1965-1966. .................................................................................... 96 Introduction ...................................................................................................................... 96 ‘[S]afeguard the balance of payments and the value of the Rhodesian pound’: Rhodesian Financial Strategy and British Sanctions, 11 November to 31 December 1965 .................................................................................................................................. 97 Applying Pressure? Further British Measures and Rhodesia’s Financial Response, January to December 1966. ............................................................................................ 115 Conclusion ....................................................................................................................... 132 Chapter Five: Rhodesia against the World: Navigating Global Sanctions through Financial Adjustment, 1967- 1970 ............................................................................ 134 Introduction .................................................................................................................... 134 UN Sanctions and the challenges of London’s Financial Measure ................................. 135 The Rhodesian Response: ‘the balance of payment battle’ and the Economy, 1967 to March 1968. .................................................................................................................... 142 Comprehensive Mandatory Sanctions and the Declaration of the Rhodesian Republic, 1968-1970 ....................................................................................................................... 156 Conclusion ....................................................................................................................... 166 Chapter Six: The Limits of Settler Accumulation: Financial Policy, War and the Economy, 1970-1974 ............................................................................................... 168 Introduction .................................................................................................................... 168 The UN Resolution and the Rhodesian Republic, March 1970 ....................................... 169 ‘No Banking on the Rhodesian Funds’: The irony of Punitive Sanctions ........................ 173 ‘We have to run faster merely to stay in the same place’: The Limits of Rhodesia’s Capacity to Finance Rebellion ......................................................................................... 186 Conclusion ....................................................................................................................... 213 Chapter Seven: The ‘nuts and bolts of freedom’: Escalating War, the Reversal of Rhodesia’s Financial Fortunes and Political Settlements, 1975-1979 ......................... 215 Introduction .................................................................................................................... 215 Intensified Isolation: Mozambique Independence as a Sanctions Game Changer, Guerrilla Struggle and its Financial Impact on the Rhodesian Rebellion, 1975 .............. 216 From Stillborn Settlements and Escalating Conflict towards the Lancaster House Conference, 1976-1979 .................................................................................................. 229 Rhodesia’s Return to Legality: The Lancaster House Settlement and the Financial Nuts and Bolts of Becoming Zimbabwe, 1979 ................................................................ 241 Conclusion ....................................................................................................................... 248 Chapter Eight: Conclusion ........................................................................................ 249 Bibliography ............................................................................................................ 258 Abstract This thesis examines the history of finance and exchange control under the Rhodesian Front (RF) government between 1962 and 1979. Outlining the background to Southern Rhodesia’s incorporation within Britain’s imperial network from 1890 to 1962, the study’s primary focus is on how the Colony emerged from the Federation of Rhodesia and Nyasaland in 1963 to reconstitute a financial system capable of operating independently from Britain. The Rhodesian case study illustrates the antagonism between British financial interests and colonial financial policies. The political impasse over the Rhodesian question centered on finance as a tool of coercion by London, and conversely, as a rebel bulwark against the metropole. Following UDI in 1965, financial and economic sanctions were imposed by Britain and subsequently the United Nations (UN). The various settlement negotiations that ensued were unsuccessful in stopping the rebellion until the Lancaster House Conference in 1979. The process whereby Rhodesia survived sanctions by the use of financial measures supported by strategic political alliances and trade arrangements with South Africa and Portugal is clearly examined. It was not until the escalation of the guerrilla struggle in the 1970s that the rebel monetary system began to buckle. The study traces the measures taken by Britain and the UN to end the Rhodesian rebellion, including the effects this had on London as well as the geopolitical implications for Southern Africa, notably South Africa and Zambia.