2030 Impossible Without Reforms: World Bank

The World Bank has warned that for Zimbabwe to achieve its dream of becoming an upper middle-income country (UMIC) by 2030 required reforms in several economic sectors including harmonizing the informal and formal sectors and removing price and exchange rate distortions.

“Achieving Zimbabwe’s vision 2030 and the ambitious goal of becoming an upper middle-income country (UMIC) by 2030 will require a significant acceleration of productivity growth and focus on ensuring the creation of quality jobs,” read part of the latest World Bank Country Economic Memorandum (CEM).

The institution further told Zimbabwean authorities that there was a need to formalize the informal institutions that are contributing significantly to the economy.

“In Zimbabwe, informal workers are concentrated in critical sectors of the economy: agriculture, mining, and tourism. Despite these sectors’ importance to the economy, they present less opportunity for the country to move the economy up the value-added chain or provide higher-quality jobs for workers.

“….. Zimbabwe’s growth performance has been challenged by its large informal sector, complicating productivity growth, the effectiveness of policies, and long-term development. At the macroeconomic level, pervasive informality limits the tax base and constrains the government’s ability to mobilize domestic resources.

Stella Ilieva, World Bank Senior Economist and lead author of the report said the Southern African country’s economy had the potential to improve but a lot still needed to be done.

“Zimbabwe possesses significant, unrealized potential. The country can achieve steady and rapid economic growth, given its abundant natural resources, highly educated workforce, and strong entrepreneurial culture. Moreover, with further investment, Zimbabwe’s public infrastructure can support future growth,” she said.

The World Bank also slammed Zimbabwe for allowing internet providers to charge exorbitant charges.

“Additionally, Zimbabwe charges significantly higher broadband prices than comparator countries. If Zimbabwe is to move up the value chain and focus on advanced manufacturing and services, the country needs to address service challenges such as unaffordable internet access.”