Can Zimbabwe be a middle income by 2030?

0
432

Arthur G . O. Mutambara
Despite the critique we have offered in the past, Zanu-PF in its recently launched manifesto, insists on claiming that its vision is for Zimbabwe to be a Middle-Income Country (MIC) by 2030.

This is assumptive statement, requires qualification, quantification and supporting details for it to be meaningful.

What does that vision statement even mean?

The MIC nomenclature is a World Bank analytical tool that refers to economies with a GDP per capita ranging from $1 005 to $12 235.

This is too broad a grouping. In any case our GDP per capita income is 977, hence jumping to 1005 (if we consider minimum qualification) over 12 years is not sufficiently ambitious. This is not visionary at all.

It is instructive to note that the MICs are broken up into Lower-MIC and Upper-MICs. Lower-MICs have GDP per capita ranging from $1 006 to $3 955, while Upper-MICs have per GDP per capita ranging from $3 956 to $12 235. Does Zanu-PF aim for Zimbabwe to be a Lower-MIC or an Upper-MIC?

More importantly, what is the target GDP per capita in their vision formulation? They must be specific and say we aim to be an MIC with a stated GDP per capita number (or range of numbers).

Even with this flawed approach to the national vision process, there is need for caution. We must use the Rule of 70, which is a mathematical calculation used in economics to calculate how an economy can double its GDP per capita given a specific Growth Rate.

Under this rule the Number of Years to double a GDP per capita is equal to 70 divided by the Growth Rate. So, for example if we grow by 3 percent, then it will take us 70 /3 = 23,33 years, to double our GDP per capita. If we grow at 5 percent, then it will take us 14 years.

For Zimbabwe to double its GDP per capita by 2030, that is, attain a GDP per capita of at least $1 944, it needs to grow by about 6 percent every year for the next 12 years — which is a toll order. China did it though, but it is not easy.

In Zanu-PF’s vision what is the target growth rate for Zimbabwe for the next 12 years to 2030? In the manifesto there is target of attaining a growth rate of at least 6 percent per annum over the period 2018 to 2023. What happens beyond 2023? They do not tell us.

Let us be generous and assume that Zanu-PF wants to double our GDP per capita by 2030 — which would require an average growth of 6 percent for 12 years. The problem is that it has been a historical impossibility, with the exception of China.

For example, between 1970 and 2010 OECD countries only grew by an average of 1,9 percent! With Zimbabwe, for sure in the first few years, we may experience above average growth rates because of our low base, but we will eventually gravitate towards standard and traditional growth rates, which are much lower than percent.

More significantly from my analysis of their entire Zanu-PF manifesto, I don’t see where that growth of at least 6 percent over the period 2018 to 2030, will come from. There is absolutely no articulated and demonstrated sources of such phenomenal growth. Nothing.

It is neither sensible nor meaningful for Zanu-PF to posit that their vision is for Zimbabwe to be a middle-income country (MIC) by 2030. Zimbabwe needs a proper vision process and a more rigorous economic planning effort.

LEAVE A REPLY

Please enter your comment!
Please enter your name here