Zimbabwe not poor, not by a long shot

Bernard Bwoni Correspondent
In 2013, a research website by the name New World Wealth published a “survey” report which bogusly claimed that Zimbabwe was the poorest country in Africa because of its “controversial indigenisation policies” and “due to the erosion of ownership rights”. The survey defined wealth per capita as “a measure of the net assets held by individuals, including real estate, shares, business interests and intangibles, while excluding primary residences”.

The survey also gave a random and distorted figure of $570 as Zimbabwe’s wealth per capita, which is quite interesting as it conveniently “excluded primary residences” as net assets.

The data that was being peddled by New World Wealth survey were random numbers which had no sources or references.

The issue of wealth per capita calculations can be misleading and does not necessarily reflect the general state of wealth of the ordinary person on the street.

What this “survey” by New World Wealth used is a dubious measure to say the least.

Per capita wealth, which is the mean of the people in any economic unit, is calculated by taking a measure of all sources of income in the aggregate such as GDP and dividing that by the total population.

In “developing countries”, it is not unusual that more than 80 percent of total assets are held in the form of non-financial assets, including primary residences, farms and small business assets.

As countries develop and make the transition to a market economy, the importance of non-financial assets tends to decline.

In the richest countries of the world, financial assets typically account for more than half of the household wealth, says the UN Human Development Report for 2013.

In the survey, you will find that in Zimbabwe the informal sector is not accounted for in these per capita calculations.

There is the Zimbabwean Diaspora, which has contributed a whopping $1,6 billion annually to the Zimbabwe economy and per capita calculations do not capture those revenue sources.

Bogus surveys like that of the New World Wealth solely seek to dismantle the nucleus of the real African economic biogenesis, which is the indigenisation and empowerment, hence it warned, “should Zimbabwe continue with its controversial indigenisation programme, which requires foreign companies to cede 51 percent shareholding in their companies to locals, its citizens’ wealth would continue to be eroded”.

How is it possible to erode wealth when you empower people with ownership?

In 2015, the same report was published by the New York-based Global Finance magazine and it stated that Zimbabwe was second poorest country in the world after the Democratic Republic of Congo.

This report presented yet distorted and deliberately downgraded figures to try and diminish once again Zimbabwe’s economic empowerment policies and the land reform.

The plot is simple: a screaming headline that Zimbabwe is the poorest country in the world gets shared on social media and Africans, as gullible consumers of Western media propaganda, will buy into such spurious studies.

The owners of the bogus report will sneak in statements like “damning verdict of President Mugabe’s controversial economic policies and land reform”.

The obvious conclusion about these reports is that it’s the same group that wants to portray Zimbabwe as poorer because of land redistribution and economic empowerment for the previously displaced and economically disadvantaged black Zimbabweans.

It is unfortunate that once again, it was Zimbabweans who ululated at the regurgitation of the same dubious report.

It was Zimbabweans who celebrated and were too eager be known for their poverty via the blatantly dishonest report or survey.

There were no attempts at enquiry or probing these obvious lies. It was Zimbabwe online and print media sources that carried front page headlines with copy and paste of the so-called report.

The Global Finance survey reported that Zimbabwe’s income per person per year was $589.

Any right thinking Zimbabwean will dismiss this report without even looking at it.

Even cattle herders in the village have incomes more than double that per year.

The Global Finance figures did not match with official statistics available from more reliable sources like the IMF and so on.

The 2015 data from IMF indicated that Zimbabwe’s income per person per year is in fact $2 046 and that is nowhere near the poorest country in Africa as claimed by Global Finance magazine.

In Zimbabwe there is a thriving informal economy coexisting alongside a formal economy, yet not contributing towards national fiscus and GDP figures.

The reason why we have such flawed analyses is that there is cash in the country but not necessarily circulating in the economy.

It is either people have buried their money or it has been illegally taken out of the country.

There is no precise set of economic data indicative of present realities on the ground and an accurate estimate of the size and structure of the Zimbabwe economy.

The size of the Zimbabwe economy is not currently correctly measured and hence these inaccurate and mischievous rankings we end up having.

In 2016, the same report surfaced again and this time it was called the 3rd Annual Africa Report and once again ranked Zimbabwe as the poorest country in the world with a wealth per capita of $200.

The report was carried by CNBC Africa.

It pointed, as expected, that “vote rigging, the lack of respect for ownership rights, violence, absence of Press freedom are some of the reasons that have been cited for the Southern African country’s collapse and ultimate malaise”.

The motives behind this same fallacious report being regurgitated are clear.

It is to dismiss the “radical economic transformation” in Zimbabwe and to warn other African countries not to follow suit.

In 2017, the same report was released again and this time by AfrAsia Bank and New World Wealth. This same “new” report makes the same spurious claims that Zimbabwe’s wealth per capita is $200.

One important thing to note about these reports is that all of them always zero in on Zimbabwe. This latest one gives a case study.

Predictably, according to the report, “the researchers found that certain factors contributed to the poor performance of Zimbabwe’s people on an average wealth and total wealth ranking. The erosion of ownership rights was found to be one such factor”.

The person or the people behind these reports are evidently an aggrieved party and hence the specific focus on property rights.

These reports or surveys are part of a much wider deception and damage strategy to discredit Zimbabwe’s land reform and radical economic transformation policies.

It is important that such unsubstantiated surveys are dismissed outright with genuine counter-evidence.

The latest so-called report by AfrAsia Bank and New World Wealth pinpoints to South Africans being the second richest in Africa, with a wealth per capita of $11 300.

The only issue with such rankings and use of wealth per capita is that it camouflages the harsh realities of inequalities that pervade South Africa.

This is a survey originating from South Africa, a country that has been ranked the most unequal country with the highest Gini-coefficient ranking on the African continent.

South Africa is the most unequal country in Africa and the duplicitous AfrAsia and New World Wealth “survey” should be targeting, confronting and addressing those inequalities head-on.

In South Africa, the top 10 percent of the population earns 110 times more than the bottom 10 percent and 74,8 percent of all wealth is owned by the richest 10 percent of the population, according to Credit Suisse Global Wealth Databook. Such inequalities are not addressed in the per capita wealth calculations.

The Gini-coefficient is a mathematical measure of inequality and the higher it is, the more extreme the nation’s wealth inequality.

The Gini-coefficient is a ratio between one and zero, where zero shows perfect equality and one shows perfect inequality.

The closer to one a country’s Gini-coefficient is, the greater the inequality.

South Africa has a Gini-coefficient of 69,1 or 0,69, which is the highest on the African continent and among the top in the world, according to the UN Human Development Report for 2013.

The strength of Zimbabwe’s land redistribution programme lies in giving land to the people as primary residences, people in rural areas live and farm on their primary residences and excluding primary residences in the calculations means that is also not captured.

The Zimbabwe Government’s indigenisation and land reform programmes are addressing inequalities whereas, the high per capita wealth figure of $11 687 for South Africa only serves to conceal the glaring inequalities and to deceive and pacify the masses from clamouring for what is rightfully theirs.

Zimbabwe still has 90 percent of all its natural resources still in the ground and that is diamonds, platinum, gold and coal.

The most profitable platinum mine in the world is in Zimbabwe.

Agriculture is on the rebound as evidenced by the buoyant tobacco sector, the expected bumper maize harvest from Command Agriculture and that is on the backdrop of the highly necessary and successful land reform process.

In Zimbabwe, people with homes are unleveraged and have a 100 percent equity position in their homes, which means there is a lot of capital to be unlocked there.

Zimbabwe is rich, there is nothing controversial about the country’s indigenisation laws.

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  • Oscar Takavarasha

    Well researched and well written. Good to see challenge for these silly claims that continue to go unchallenged.

  • Kire

    What the IMF and other financial institutions do is play psychological downplay on our economy. Where it is 6.7 growth it’s reported as 2.7% to meet their targeted end which we all know. It creates a very gloom picture of suffering, poor performance and sends very wrong messages to the masses due to over reliance on the predictions of these political aka financial institutions. Our country is on good path, on a road to recovery. It is bigger than these fake downplayed statistics.

  • zimBOBwe

    dont be fooled..we are poor we cant even sustain our own industries, they keep closing down because people don’t have the means to buy their products and also because their products are just too expensive compared to alternatives from outside the country. simple

  • thing

    Is having pot holes poor

    What do you think? Is having clothes with tears in them poor? The same goes for holes in the roads.