ZIMBABWE has been ranked one of the 12 most advanced countries in Africa on 11th position, due to its gross income from the informal sector which sustains the country’s economy.
In a recent survey by Yahoo Finance, global economic analysts, Zimbabwe was ranked the 11th most advanced country in Africa, following other countries like South Africa, Morocco, Tunisia, Botswana, Kenya, Egypt, Ghana, Namibia, Senegal and Tanzania.
The survey stated that Zimbabwe's economy has been mainly boosted by the informal sector due to high rates of unemployment in the country.
"The Republic of Zimbabwe is a landlocked South African country with a $38 billion gross domestic product (GDP). Its economy is primarily fuelled by the services sector, due to low levels of industrialization. These are economies that remain undocumented as their transactions are generally conducted outside the formal banking system, which keeps them off of the authorities' radar,” the survey said.
Economist Edward Graham Cross (Eddie Cross) said the informal sector has improved all sectors of the Zimbabwean economy.
"You can't really understand the Zimbabwean economy unless you have a grip on the informal sector. I would think that the informal sector constitutes the majority of the Zimbabwean economy, and without this informal sector, our social economic situation would be much worse. The informal sector plays a major role in all sectors of the economy," Cross said.
However, Cross said corruption and smuggling of goods at the country’s border posts is negatively impacting on local industries and the economy.
"One thing that I am concerned about is the increasing activity at border posts, especially Beitbridge, which is not good for the economy. It means these goods are coming into the country without tax and it's difficult for local manufacturers to compete with them. The major thing driving that is dollarization, which made it very easy to trade across our borders. But aside from that, the informal sector is the dominant player in Zimbabwe, and I think it probably means that we do occupy a high position in African rankings because of the informal sector."
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Statistics by the International Monetary Fund (IMF) show that Zimbabwe is the world's second largest informal economy, consisting of 64, 1% of the economy, and second to Afghanistan.
Economist Vince Musewe said that an advanced economy cannot be fuelled by the informal sector, adding that a country's economy should be measured by its citizens' standards of living.
"Economic indicators at times do not capture the essence of social impact of economic policy. We must measure success by jobs created, incomes and poverty levels. It is also critical that we have the same basis of measuring advancement. What we require is a better quality of life for the majority of citizens. That is certainly not the case,” Musewe said.