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. Herald
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