Mthuli Ncube‘s Upper Middle Income Economy Targets A Pipedream: Expert

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By Alois Vinga

A TOP economic expert has warned targets set by Finance Minister Mthuli Ncube to establish an upper-middle income economy by 2030 are now highly unachievable after the failure to sustain a yearly growth trajectory.

President Emmerson Mnangagwa’s administration plans to achieve Vision 2030 on the basis of implementing sound economic transformative policies.

However, speaking to Business on the sidelines of the Zimbabwe Coalition on Debt and Development post 2022 budget analysis this week, Prosper Chitambara said achieving the status may be a pipedream considering the slow economic recovery progress registered so far.

“The economic growth rates have been erratic, and the worst part is that even at the peak, Zimbabwe has never matched economic growth with job creation,” he said.

“For the upper-middle status to be achieved, we needed to sustainably record growth at 10% annum but unfortunately, in the last two years, the growth has been negative. This year, growth projections are at 7,8%. So, we are already off-course.”

The economist also decried the levels of economic investment, which he said do not match up  the required growth appetite in line with set targets.

“Current investment levels as a percentage of the Gross Domestic Product stand at between 7% to 9%,  which has been the trend for the last five years. To achieve our set targets, we will need to up this figure to 25% ratio against GDP.

“Unlike countries such as China where per every US$1 earned, 45 cents goes towards investment. However, in Zimbabwe we only manage to invest 9 cents per every US$1 earned.

“The worst part is that the investment goes towards our own infrastructure,” he said.

Chitambara added the annual inflation rate as at November 2021 was 58,4% up from 54,49% in October.

“In Zambia, annual inflation rate for October 2021 was 21.1%; in Botswana annual inflation rate for October 2021 was 8.8%; in South Africa annual inflation rate for October 2021 was 5.0%; in Malawi annual inflation rate for October 2021 was 9.0%; in Namibia annual inflation rate for October 2021 was 3.6%; and in Mozambique annual inflation rate for October 2021 was 6.24% making Zimbabwe less competitive.”