Black Friday refers to the day that Zimbabwe's currency, the Zim Dollar crashed in valued, losing 72% against the United States dollar on 14 November 1997. The day kicked of economic collapse and a depression that Zimbabwe is yet to recover from. The crash of the local currency is mostly attributed to unbudgeted awarding of monetary compensation packages to war veterans with each veteran getting $50,000 each.
The war vets compensation was immediately followed by the stopping financial aid to Zimbabwe by multilateral financial institutions like the IMF and World Bank.
The World Bank withheld US $65 million of balance of payments support funding and demanded that the Zimbabwe government demonstrate how it intended to raise the war vets compensation money.
Following the crash of the currency, the stock market subsequently crashed 46% as investors divested.
The economic collapse resulted in massive demonstrations against the government between 1998 and 2000, especially in the capital, Harare.
The Zim dollar continued to lose value, with inflation eventually reaching 231 million by June 2008.
Other Causes of Black Friday
- Failure of the IMF’s Economic Structural Adjustment Programme (ESAP)
- Unanticipated costs in the regional Democratic Republic of Congo War
- The start of a controversial land reform programme