BY HELLEN NGOSA
Some economists have described the recently reclassification of Zambia as a lower middle income country as a step in the right direction for the country.
Private Sector Development Association Chairperson Yusuf Dodia said the World Bank’s reclassification of Zambia as a lower Middle income country was a sign that a country was making steady social economic progress.
The July’s World Bank annual assessment of poor countries, Zambia was the 27th country to be reclassified since the year 2000 ahead of Ghana at 28. Zambia and Ghana are among 63 countries which the World Bank has classified as middle income countries since the year 2000.
Speaking in an interview in Lusaka recently, Mr. Dodia said there was need for the government and the Private Sector to forge a stronger partnership so that there could be further progress.
Mr. Dodia said such progress does not easily come by and that there are a sign of economic maturity and good policy framework from the government and its cooperating partners like the Private Sector.
“Otherwise, what we would like to say is that this is a good development, an indication that we are on the right track on our goal to be a prosperous nation,” he said.
And an economist, Mark O’Donnell said the new development was a positive reward for the business community which has been striving for the reclassification for a long time.
Mr. O’Donnell said the reclassification is proof enough that government and the business community were committed to taking Zambia into high heights.
Another economist has urged Zambians to harness and help sustain the status of the lower middle income country reclassification so that the grass roots can feel the benefit of the status.
Edmond Soko said it is justifiable for Zambia to move to a higher status considering the higher current economic successes that it has recorded.
Mr. Soko said the infrastructure development being seen around the country and the increased capital inflows in the mining industry, construction, and agricultural sectors among others, are indicators of economic growth.
He stated that several economic successes that Zambia has been recording in the recent past have earnestly convinced the World Bank and other international institutions to rerate the country to the category of lower middle income nation 19 years before the planned period of 2030.
He said the reclassification of Zambia as a middle income country has come unexpectedly but at the right time especially that everyone thought the developmental sentiments by government and economist were part of the election propaganda.
Mr. Soko said the fears by some sections of the society that the country might lose out part of the donor aid after this rating are not justified because the country cannot entirely depend on donor aid forever but gradually wean economically.
He said that this is why it is important to harness this status and consistently sustain it so that the grass roots can feel the impact.
According to the World Bank, the upward adjustment in Zambia’s income growth is as a result of foreign aid driven in interventions and surging prices of copper in the last few decades.
Low income countries are those with average Gross National Income (GNIs) of less than US$ 1,005 per person annually. Lower middle income countries have per capita GNIs of between US$ 1,006 per year and upper middle income countries have per capita GNIs between US$ 3, 976 and US$ 12,275.
The World Bank did its annual assessment of poor countries in mid July and the new middle income countries this year are Zambia and Ghana.
The reclassification comes as a result of the price of copper (Zambia’s major export) which was depressed in the 80s and so its price rise in the middle of the last decade as China and India’s economies grew and demand for Copper soared.
The Middle income countries now account for most of the world population leaving in absolute poverty and they need aid allocation models which will take account of poor people and deprivation beyond income.
The World bank also states that Zambia and Ghana have done well although the progress to attain the goals is slow.
“However, in both Ghana and Zambia, a number of children in primary school has climbed along with literacy rates and infant mortality has fallen. Even if there are not on track to meet the MDGs, quality of life is getting much better,” the World Bank report says.
There are only 35 low income countries remaining out of the countries being accessed by the World Bank.
In March this year, Zambia was assigned a B+ sovereign credit by 2 internationally recognised credit agencies – Standard and Poors and Fitch.
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