“Zimbabwe is growing without transforming” says the World Bank, but what transformations for whom?

The new Zimbabwe Growth and Jobs Report from the World Bank argues for a major structural transformation of the economy, taking advantage of the recent period of relative macroeconomic stability and new prospects for debt and arrears clearance. However, the big unanswered question is: transformation to what for whom?

The report opens with a very welcome positive reflection on recent economic trends: “After two decades of macroeconomic instability and lacklustre growth, Zimbabwe has recently made genuine progress. Growth averaged almost 6 percent between 2021 and 2025, and local currency inflation fell to single digits in early 2026 for the first time since 1997.” But, the report argues, “Zimbabwe is growing without transforming.” What is meant by this?

A classic structural transformation?

The report offers lots of useful data on economic trends (of course limited by the paucity and accuracy of national data). Changes in the agricultural sector are showing signs of a classic ‘structural transformation’, the report argues, whereby people move out of agriculture into other jobs. However, the report claims, such a transformation is hampered as these people move into “low productivity services rather than higher-value industries”. with 80 percent of jobs remaining informal. This, the report suggests, is bad news and needs to be remedied through investment in three ‘pillars’ that reinforce growth in the formal economy: foundational infrastructure, reducing regulatory hurdles for business and mobilising private investment, underpinned by macroeconomic stability and debt reduction.

In other words, rather than relying solely on the market, the Bank makes the case for strategic intervention to encourage structural transformation. This of course is a long-overdue break from the old Washington Consensus of the past, but it still focuses on a particular style of structural transformation towards formal, larger-scale business, largely driven by market forces even if nudged and assisted by the state.

Across the report, there is therefore much talk of ‘derisking’ private business, reducing regulatory hurdles combined with the recurrent, tired obsession with private property rights and land titling. But on top of this, there is also a real recognition of the need for state investment in ‘foundational infrastructure’, notably reliable electricity supply, irrigation and transport networks to facilitate economic activity, all urgently needed across Zimbabwe.

The missing political economy dimensions

What is missing in this analysis? Rural transformation is of course not just an economic process whereby relative factor prices determine what is produced where and by whom. The classic structural transformation argument – echoed in this report – is that over time there is a move from low value agriculture to a process of industrialisation where high value outputs and employment can be achieved. The classic dual model of Arthur Lewis has dominated development thinking for decades, but while a useful framework it misses two key dimensions.

First, a standard economic analysis fails to appreciate the complex ways people construct livelihoods across agriculture and off-farm activity, between rural and urban spaces and all set within informal relations in the economy. This is a theme that we have highlighted repeatedly in our research, showing how surplus agricultural production from land reform areas generates growth in small towns within rural areas, much of it informal but cumulatively significant. And second, a focus on a mechanistic economic transformation misses the important class dimensions of agrarian change and how patterns of accumulation are distributed across society and so fails to ask the crucial questions about who wins and who loses in processes economic transformation.

Complex livelihood strategies and class-analytic considerations are almost completely absent in the report (I know, it’s from the World Bank!) but, as our work has shown, processes of livelihood diversification and social differentiation and patterns of selective accumulation are key in understanding how agrarian transformations unfold following land reform. This is important as the shape of rural economies influences how growth occurs and where, benefiting whom. And, with this, class relations between and within rural and urban areas in turn influence wider politics and so who is able to push for particular types of growth and for whom.

Will the desired growth be narrow and captured, or broad-based and inclusive? These are critical political-economic questions.

A new dualism by default?

As its title suggests, the report seeks ways of supporting economic growth and (formal) jobs, but it talks little about distribution. In addition, the focus on ‘the formal’ encourages transformation in particular directions. This usually means supporting a rich, established capitalist class instead of the multitude of informal entrepreneurs, as well as big farmers rather than diverse, dispersed smaller producers – or prioritising small farmers incorporated into capitalist circuits through contract farming, hub-and-spoke models and other arrangements.

In other words, the implicit suggestion is that the direction should be towards a dualistic economy with farms consolidating and shedding surplus labour to support an industrial, urban core. Maybe with a new racial complexion, this is of course what existed in the colonial and pre-land reform era. Capture by old white capital is of course complemented today by the increasing control by a politically connected oligarchic elite at the centre of key sectors of the economy. But is this the style of growth that is really desirable?

By ignoring the political economy of growth, the report (perhaps inadvertently) makes the case for a reversion to a dualistic economy, controlled by an economic elite. This is certainly a trend we see in the post-2017 period, and especially in the last five or so years. The policy posturing around land titling, the consolidation of farms for ‘scale advantages’ and investment in large-scale farm mechanisation, formal irrigation schemes and so on is witness to a shift in position away from a smallholder led agricultural revolution fostered by land reform.

This is a mistake in my view, as the basis for sustained, distributed growth has been made through land reform. While Zimbabwe is no East Asian miracle in the making, many of the positive trends seen elsewhere in the past are observed.

A more inclusive, broad-based transformation

What is now needed includes many of the policy suggestions offered in the report, but with some big caveats.

Guaranteed electricity supplies are essential, but large-scale grid-based infrastructure must be combined with off-grid alternatives. Transport networks are needed, but not always focused on central ‘corridors’, but secondary road infrastructure within rural areas is also required. Irrigation is vital for agriculture, but rehabilitating irrigation schemes may not be the best route given the importance of famer-led irrigation systems using decentralised technologies. Improved rural financing is of course essential, but credit guarantees and support for small-scale farmers and informal business operators is required, not just standard financing through highly conservative commercial banks. And reducing red tape is for sure vital but, as the report notes, this needs to facilitate the upscaling of small-scale, informal operations, and avoid the disincentives so often resulting from compliance (see an especially good section around pages 54/67). All these are themes mentioned on this blog many times, but the report’s recommendations unfortunately frequently prioritise a fairly standard, large-scale investment prescription with the options more suited to local contexts, while mentioned, being given less prominence (see Table O.1/6.1).

Although the report admits that “not all informal work is necessarily a drag on development” and that informal activity can be part of “productive informality” and an “intermediate step” to structural transformation, the informal economy – in practice the economy – is rather dismissed. Yet, well-designed policy interventions suited to existing contexts can, as we have often argued, allow for the aggregation and technological upgrading both of agriculture and small-scale enterprises in ways that generate growth both in rural areas and connected small towns that is widely shared. This can, in turn, create the sort of linkages that sustain embedded growth in the long-term while nurturing a politics that is rooted in local economies rather than distant elite circles.

While there are many overlaps and much convergence of overall thinking, the report sets out a rather different vision. The report is unquestionably an important contribution to the debate about Zimbabwe’s future, but it misses much by ignoring local contexts and the wider political economy of growth and transformation.

This post was written by Ian Scoones and first appeared on Zimbabweland.