By Alois Vinga
EXTREME poverty in Zimbabwe has risen to 34 percent, with 1 million more citizens now added to the existing 4.7 million, World Bank (WB) said in a recent Poverty and Equity brief.
The global lender said there has been a significant growth in the country’s poverty rate over the past years owing to natural disasters, among other factors.
Said WB in part, “Extreme poverty is estimated to have risen from 29 percent in 2018 to 34% in 2019, an increase from 4.7 to 5.7 million people. The increase is driven by economic contraction and the sharp rise in prices of food and basic commodities. Contraction of agricultural production following an El Nino induced drought worsened the situation in rural areas.”
The update says one tenth of the rural households constituting about double the proportion of urban households are going without food for a whole day.
Natural disasters are also cited as part of the factors which have worsened the poverty situation.
“Cyclone Idai has worsened the situation in three key provinces that typically account for 30% of agricultural output.
“The drought has also led to broader impact on the electricity and water sectors, causing widespread rationing and tariff adjustments to manage costs,” says the report.
WB said inflation has been increasing since October 2018, driven by monetisation of sizable fiscal deficits of the past, price distortions, and local currency depreciation.
Observed the update, “Annual inflation reached 230% in July 2019 compared to 5.4% in September 2018, with food prices rising by 319% in July 2019 while non-food inflation increased by 194%.”
Going forward, poverty is projected to remain stagnant in 2020 as positive impacts of a rebound in agricultural production will be countered by the negative effects of continued high inflation, further undermining the purchasing power of the poor.
Added the brief, “Poverty is likely to have risen further since 2017 given the sharp rises in food prices, which rose by 319 % from June 2018 to June 2019. Together with poor rainfall in the 2018/2019 season. This increased the portion of food insecure people to 51%.”
However, the national poverty rate, measured at the relatively high poverty line decreased marginally from 72 to 70 %.