
DAVOS – Zimbabwe will turn to domestic taxation to fill a looming funding gap as U.S. President Donald Trump moves to freeze foreign aid, Finance Minister Mthuli Ncube has said.
Following his inauguration, Trump signed executive orders withdrawing the United States from the World Health Organisation (WHO) and implementing a 90-day suspension of foreign aid while his administration reviews whether such programmes align with his “America First” policy.
Zimbabwe has been a major beneficiary of U.S. foreign assistance, receiving over $300 million through USAID in 2023, with most funds directed towards healthcare via NGOs rather than the national budget. The country also relies heavily on the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR), which provides over $200 million annually to support health workers and HIV prevention efforts.
Speaking at the World Economic Forum in Davos, Ncube acknowledged the potential impact of these cuts but insisted Zimbabwe must focus on generating revenue locally.
“We are talking about $200 million or so (from PEPFAR) that is at stake. Our response really should be domestic resource mobilisation, which is what we have been doing,” Ncube said.
The government has already introduced a series of taxes to boost revenue, including a sugar tax on soft drinks and a 1% levy on fast food. Zimbabweans also contribute to an AIDS levy and pay excise duties on alcohol, which Ncube says are crucial for funding public healthcare.
“All these taxes form the base that we can use to build resource mobilisation to support our health needs,” he added. “It has to be really through this kind of thinking that we raise resources to support health domestically as foreign funding is under threat.”
WHO estimates that more than half of Zimbabwe’s healthcare spending comes from external donors. This year, the country expects $461 million in donor support for health programmes, an increase from $353 million in 2024.
However, government funding for healthcare remains inadequate. Zimbabwe has allocated just 2.1% of GDP to the sector in 2025, down from 4% in 2024. Budget execution has also been poor, with only 27% of the allocated health budget used by mid-2024, according to Treasury data.
As uncertainty over foreign aid grows, Zimbabweans could face higher taxes and increased pressure on an already struggling public health system. – NewZwire