AS Zimbabwe’s leading voice for evidence-based analysis and public accountability, we consider it our duty to interrogate claims that shape economic policy and influence public perception.
At a recent pre-budget seminar in Bulawayo, Finance, Economic Development and Investment Promotion minister Mthuli Ncube asserted that the majority of Zimbabweans are now middle-income earners, spending about US$9 daily.
This assertion, however, demands closer scrutiny and the minister’s own methodology exposes the fragility of this optimistic narrative.
While the minister is correct to refer to Gross National Income (GNI) rather than Gross Domestic Product (GDP), his conclusion remains fundamentally flawed.
GNI measures the total income earned by a nation’s residents, wages, profits and taxes, whether generated locally or abroad. It does not measure household consumption or disposable income.
The critical error lies in equating GNI per capita with daily personal spending. National income includes government revenues and corporate profits that never reach ordinary citizens’ pockets.
To assume that a per capita GNI of about US$3 300 translates into US$9 of daily household expenditure is a basic misinterpretation of national accounting. A more realistic gauge of actual consumer spending comes from Value Added Tax (VAT) data.
According to the Zimbabwe Revenue Authority, VAT collections last year totalled just over US$1 billion, implying taxable sales of roughly US$10 billion. Spread across Zimbabwe’s population, that equates to average daily consumption of about US$1,80 per person, a figure dramatically below the minister’s US$9 claim.
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Even this US$1,80 estimate likely overstates rural consumption. With more than 65% of Zimbabweans living in rural areas, where formal retail outlets are scarce, VAT primarily reflects urban spending patterns. The absence of major retail chains in rural regions underscores that expenditure levels there cannot possibly sustain formal commerce, let alone suggest universal middle-income status.
Some may argue that informal sector activity accounts for the discrepancy. Yet the gap, over 400% between official claims and implied consumption, is too wide to be bridged by unrecorded transactions.
Moreover, since most goods consumed in Zimbabwe are locally-produced, VAT remains a reliable proxy for formal economic activity.
As an institution committed to truth, transparency and sound policy debate, we urge policymakers to separate national income aggregates from household welfare indicators.
Aspirations toward upper-middle-income status are commendable, but confusing statistical abstractions with lived reality risks dangerous self-deception. Businesses may misread market potential and policymakers may design programmes detached from the economic hardships most citizens face. If Zimbabwe is to build a genuinely prosperous and inclusive economy, it must start with honesty about where it truly stands, not where it wishes to be.
The evidence suggests that the road to broad-based prosperity remains far longer than official optimism would have us believe.
We trust the learned minister will take note.
