Middle income status by 2030 achievable . . . Let’s change our economic planning horizon

11 May, 2018 - 00:05 0 Views

eBusiness Weekly

Clive Mphambela
Two months ago, President Emmerson Mnangagwa, stated his desire to lead Zimbabwe to middle income country status by 2030.

Many critics came forth to say that this vision is just a pie in the sky and that it was not possible in 12 years to achieve such an ambitious goal.

However, in my mind, the goal of Zimbabwe becoming a middle income economy by 2030 is quite achievable.

But there are preconditions.

The World Bank defines a middle-income economy as one with a gross national income per capita, which falls in the range between $1,005 and $12,235 per annum.

Currently therefore according to the World Bank, Zimbabwe is classified as a low — income economy, with per capita GNP of just less than $1000.

Historically, the World Bank has referred to both low-income and middle-income economies as “developing economies” but since 2016, this nomenclature was changed due to the fact that it lacked specificity.

According to the revised classification, countries like Botswana, South Africa, Algeria and Namibia are among the African countries classified as middle-class economies.

One of the major issues that the Zimbabwean economy has had for the past three or four decades has been the very high volatility of GDP growth rates as a direct result of the shorter nature of the country’s economic development programmes.

Just to put things into context, Zimbabwe has implemented or tried to implement, with various degrees of success and failure, not less than a dozen economic programmes since 1980. During the period 1981 — 2018 the Government has instituted the following:

Growth with Equity (GWE) — 1981:

Transitional National Development Plan (TNDP) — 1982-1985;

First Five Year National Development Plan (FFYNDP) — 1985-1990;

Economic Structural Development Programme (ESAP) — 1991-1995;

Zimbabwe Programme for Economic and Social Transformation (ZIMPREST) — 1996-2000;

Vision 2020 and Long Term Development Strategy — 1997-2020;

Millenium Economic Recovery Programme (MERP) — 2001-2002;

National Economic Revival Programme (NERP) — 2003-2004;

Macro Economic Policy Framework (MEPF) — 2005-2006;

National Economic Development Priority Programme (NEDPP) — 2006-2008;

Zimbabwe Economic Development Strategy (ZEDS) — 2007-2011;

Short Term Emergency Recovery programme (STERP I) — 2009;

Short Term Emergency Recovery programme (STERP II) — 2010- 2012;

Medium Term Plan (MTP) — 2011- 2015; and

Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZIMASSET) — 2013-018.

Apart from Vision 2010, all of the above programmes have been very short ended in nature, just a year in some cases and not more than five years. Oftentimes the programmes were cut short and replaced by new programmes before they had been fully implemented.

The result! Extremely volatile GDP growth rates since 1980. Under such a scenario, it is not surprising that economies that were much smaller than Zimbabwe in the 80’s, Kenya, Zambia, Ethiopia, Tanzania have now far outpaced the country in terms of GDP size.

This can easily be turned around if we begin to adopt long range economic plans that are carefully supported by sector specific short and medium term tactical and strategic initiatives.

Therefore, the foremost challenge of the new dispensation is the design and implementation of an optimal economic policy mix that will drive and sustain high levels of economic growth over the next 10 to 15 years.

Taking into account current GDP estimated at about, $16 billion and investment rates estimated at between 12 and 13 percent, the country would need consistent annual growth rates of approximately 6 percent to achieve a GDP target of $33 to $35 billion by 2030.

This is aggressive but achievable.

It is refreshing to note that currently Government is seized with coming up with the Zimbabwe National Industrial Development Policy (2018-2022).

The policy framework is underpinned by the premise that Zimbabwe’s economic recovery will be driven by a very aggressive structural shift and transformation skewed towards manufacturing. This is viewed as being critical for sustained economic growth and development in the medium term. The NIDP reflects the Government’s new thrust to come up with interventions, policies and strategies aimed firstly at improving the business climate in Zimbabwe.

In order to fit into the broader regional integration agenda, the Zimbabwe National Industrial Development Policy (2018-2022) will be very closely aligned with the SADC Industrialization Strategy and Roadmap (2015-2063) and the African Union’s Agenda 2063 which all call for countries to pursue industrialisation strategies anchored on factor-driven, to investment–driven, and then to efficiency-driven and ultimately steering economies to a high growth trajectory driven by knowledge, innovation and business sophistication.

The policy framework has thus been crafted with a long term vision in mind and is quite in tune with the aim of transforming Zimbabwe into middle income country by 2030. In the immediate term, it is acceptable and logical that the focus and preoccupation of the government is opening Zimbabwe for business. This is the surest route to creating jobs, modernising the public sector and promoting investment, economic empowerment re-aligning to an investor friendly trajectory leading to economic growth and employment creation.

The writer is an economist. The views expressed in this article are his personal opinions and should in no way be interpreted to represent the views of any organizations that the writer is associated with.

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