Zimbabwe’s Healthcare Future: Relying on Taxes Amid Foreign Aid Cuts 

HARARE, Zimbabwe – As the impact of foreign aid cuts looms, Finance Minister Mthuli Ncube has announced that Zimbabwe will increasingly rely on domestic taxes to fund its healthcare system.

This shift comes in response to significant reductions in aid from the United States, particularly following former President Donald Trump’s decision to withdraw from the World Health Organization and implement a freeze on foreign aid programs.

The Impact of U.S. Aid Cuts

At the end of 2023, U.S. programs in Zimbabwe were valued at over $300 million, primarily channelled through non-governmental organizations rather than the national budget.

Among these programs, the President’s Emergency Plan for AIDS Relief (PEPFAR) provided more than $200 million annually, supporting health workers’ wages and crucial HIV prevention initiatives.

Ncube emphasized the urgency of adapting to these funding changes during his remarks at the World Economic Forum in Davos.

“We are talking about $200 million or so (on PEPFAR) that is at stake. Our response really should be domestic resource mobilization, which is what we have been doing,” he stated.

Domestic Resource Mobilization Strategies

By “domestic resource mobilization,” Ncube refers to a series of new taxes aimed at generating revenue for healthcare.

These include taxes on sugar content in beverages and a recently introduced 1% tax on fast food.

Additionally, Zimbabweans already contribute through an AIDS levy and “sin taxes” on alcohol, which are also intended to support healthcare funding.

“All these taxes form the base that we can use to build resource mobilization to support our health needs,” Ncube explained.

He underscored the need for innovative thinking in raising domestic resources as foreign funding becomes increasingly unreliable.

Current Healthcare Funding Challenges

The World Health Organization estimates that over half of Zimbabwe’s health spending is financed externally.

For 2025, Zimbabwe anticipates receiving $461 million from donors for health programs, an increase from $353 million in 2024.

However, the government has struggled to adequately fund public healthcare; it plans to allocate only 2.1% of GDP to health in 2025, down from 4% in 2024.

The late disbursement of funds further complicates matters. According to Treasury’s mid-year data for 2024, only 27% of the health ministry’s allocated budget had been utilized by June.

A New Era for Zimbabwe’s Healthcare Funding

As Zimbabwe navigates this critical juncture in its healthcare funding strategy, reliance on domestic taxes may become a necessary reality.

While this approach presents challenges, it also offers an opportunity for the government to develop a more sustainable and self-reliant healthcare system.

The shift away from dependence on foreign aid requires careful planning and execution, as well as public buy-in for new taxation measures.

As Mthuli Ncube emphasizes the importance of domestic resource mobilization, the future of Zimbabwe’s healthcare system will depend on innovative strategies and community support to ensure that essential health services remain accessible to all citizens.

Pindula