Zimbabwe dismiss World Bank ranking

THE Ministry of Economic Planning and Investment Promotion has attacked the latest World Bank's Country Policy and Institutional Assessment for giving Zimbabwe its lowest ranking among African countries.

Zimbabwe shares that dubious distinction with Eritrea, whose economy is largely based on subsistence agriculture, with 80 percent of the population involved in farming and herding. Drought has often created trouble in the farming areas.

According to the overall scale of 1 to 6, Zimbabwe and Eritrea are rated at 2,2 while the most improved country, Cape Verde, is at 4. The CPIA examined 16 key development indicators covering four areas such as economic management, structural reforms, policies for social inclusion and public sector management and institutions.

Zimbabwe's low ranking means it may receive limited or no access to zero-interest financing from the International Development Association and the World Bank.

The CPIA is used to determine the rated countries' allocation of zero-interest financing under the IDA and the World Bank Group's fund for the world's poorest countries.

Permanent secretary in the ministry Dr Desire Sibanda said the rankings were not justified, considering that the country had made great strides in reviving the economy as well as attracting investment.

Its Gross Domestic Product has been growing since 2009. Its GDP grew by 5,7 percent, 8,1 percent in 2010, 9,3 percent in 2011 and 9,3 percent last year.

Dr Sibanda said policies such as Short-Term Economic Recovery Programme in 2009, STERP II in 2010 and the subsequent launch of the Medium Term Plan (2011-2015) had set prudent macro-economic policies.

All this has seen the country experiencing low inflation, sectoral growth and improved foreign direct investment inflows.

Dr Sibanda said key sectors, such as agriculture, manufacturing, mining and tourism, have been on a growth trajectory since 2009, while inflation has remained among the lowest in the region.

"It is possible that the World Bank may have used very old data. Applying such data in 2012 will defeat all efforts that the country is taking to attract the much-needed FDI.

"Investors keep an eye on such rankings and, indeed, this can affect the level of investments coming into the country."

He added that the country's Human Development Index had witnessed a considerable increase over the past three years.

But Dr Sibanda acknowledged that Zimbabwe was still facing challenges that were affecting its economy, among them lack of working capital, limited external lines of credit, influx of cheap imports, high cost of labour and relatively low FDI.

Although the CPIA rankings place Zimbabwe lowest across the continent's poorest countries, it noted that for countries categorised under "fragile", Zimbabwe was one of the countries that improved the most.

According to the World Bank, the only areas where Zimbabwe recorded improved ratings were in the payment of taxes.

"It is not possible for Zimbabwe to have scored the lowest among these African countries," said Dr Sibanda.

But the World Bank says countries that top the CPIA scores tend to take a broad-based approach to carrying out its reforms.

The World Bank also ranks Zimbabwe lowly in its Doing Business rankings. For instance, in the latest Doing Business Indicators for 2012 Zimbabwe was ranked 171 out of 183 countries, three places down from the 2011 ranking at 168.

These indicators also show that despite the launch of the One Stop Shop by the Zimbabwe Investment Authority in 2010, Zimbabwe was ranked 144 in 2012 (142 in 2011) on the ease of starting a business.

According to the World Bank the only areas where Zimbabwe recorded improved ratings were in the payment of taxes.