Poverty Stalks Debt-Ridden Zimbabwe

DEBT-RIDDEN Zimbabwe has been named as one of the sub-Saharan African countries which plunged deeper into poverty in 2019 following the outbreak of the Covid-19 pandemic and the Russo-Ukraine conflict, a new World Bank report reveals.

According to the bank, Covid-19 marked the end of a phase of global progress in poverty reduction over the past 30 years. During the three decades that preceded its arrival, more than one billion people escaped extreme poverty. The incomes of the poorest nations, the Bretton Woods institution says, gained ground. By 2015, the global extreme-poverty rate had been cut by more than half. Since then, poverty reduction has slowed in tandem with subdued global economic growth.

The report shows that although Zimbabwe’s poverty levels were better than those of neighbouring countries such as Mozambique and Malawi between 15% and 40% of the population were living in penury in 2019.

“The Covid-19 pandemic triggered a pronounced setback in the fight against global poverty — likely the largest setback since World War II,” reads the World Bank report titled Poverty and Shared Prosperity 2022: Correcting Course.

“Many low- and middle-income countries have yet to see a full recovery. High indebtedness in many countries has hindered a swift recovery, while rising food and energy prices — fuelled in part by conflict and climate shocks — have made a return to progress on poverty reduction more challenging than ever. These setbacks have altered the trajectory of poverty reduction in large and lasting ways. The world is significantly off course on the goal of ending extreme poverty by 2030.

“In 2019, extreme poverty remained highly concentrated in Sub-Saharan Africa and in fragile and conflict-affected economies. Sub-Saharan Africa accounted for 60 percent of the global poor at the US$2.15 poverty line in 2019. Thirty-five percent of the population (389 million) in the region lived below the international poverty line. People residing in fragile and conflict-affected economies represented about 10 percent of the global population, but almost 40 percent of the global poor.”

The multilateral lender says the economic upheavals brought on by Covid-19 and later the war in Ukraine produced an outright reversal in progress.

The World Bank says the rise in poverty in poorer countries reflects economies that are more informal, social protection systems that are weaker, and financial systems that are less developed.

“It became clear that the global goal of ending extreme poverty by 2030 would not be achieved. Given current trends, 574 million people — nearly 7 percent of the world’s population — will still be living on less than US$2.15 a day in 2030, with most in Africa,” the report says.

“In 2020 alone, the number of people living below the extreme poverty line rose by over 70 million. That is the largest one-year increase since global poverty monitoring began in 1990. Looking at poverty more broadly, nearly half the world — over 3 billion people — lives on less than US$6.85 per day, which is the average of the national poverty lines of upper-middle-income countries. Using that measure, poverty persists well beyond Africa. The prevalence and persistence of poverty darken the outlook for billions of people living around the world.”

The Word Bank provides the first comprehensive analysis of the pandemic’s toll on poverty in developing countries. It identifies how governments can optimise fiscal policy to help correct course.