Andile Tshuma, Chronicle Reporter
THE World Bank has upgraded Zimbabwe to a lower middle income economy from low income ranking, a giant leap towards prosperity under the new dispensation led by President Emmerson Mnangagwa.
The country is eyeing upper middle income status by 2030 and Government is already implementing a string of reforms under the Transitional Stabilisation Programme (TSP) to ensure the vision is achieved.
According to the latest World Bank update, Zimbabwe is one of seven countries that changed rankings this year. Senegal was also elevated from low income to a lower middle income economy while Argentina dropped from a high income to an upper middle income country.
Economic analysts said the positive shift in rankings is an endorsement of ongoing economic reform drive by the Government. They, however, challenged Government to scale up the drive and ensure that the livelihoods of Zimbabweans correspond to the new rankings.
“We have now improved our status, but the challenge is that it means nothing to the man on the streets until their livelihoods begin to change, until there are good social services and they can afford the basic necessities of life. While this is a good development, it should translate to better standards of living for every Zimbabwean, so that they may all understand and appreciate the efforts that have led to the elevation,” economist and management consultant, Mr Luxon Zembe, said.
“From an economic point of view, this is a positive development and means that a higher standard for the economy has been set. Therefore, now there should be matching productivity and capacity utilisation so that the figures on paper make sense to the ordinary man in the street.”
Since last year key reforms covering fiscal, monetary, governance and anti-corruption, among others are being rolled out. These are aimed at widening the economic base, creating jobs and taming inflation. Government has already established a leaner Cabinet and is instituting ease of doing business reforms.
Last week the country ditched the multi-currency system and adopted a local currency while at the same time scaling up international re-engagement.
The World Bank classifies the world’s economies into four income groups, which are high, upper-middle, lower-middle, and low.
The rankings are based on Gross National Income (GNI) per capita (current US$) calculated using the Atlas Method. The classification is updated on an annual basis on July 1. The classification of countries is determined by two factors, which include a country’s GNI per capita, which can change with economic growth, inflation, exchange rates, and population. Revisions to national accounts methods and data can also influence GNI per capita and classification threshold where the thresholds are adjusted for inflation annually.—@andile_tshuma