daniel chigunwe
Raymond Tendai Rusinga
Herald Correspondent
The recent inauguration of Donald John Trump as President of the United States has raised significant concerns for emerging markets, particularly Zimbabwe.
The signing of an executive order to withdraw from the World Health Organisation (WHO) has implications for global health funding, potentially affecting developing countries like Zimbabwe that rely on international assistance to sustain public health programmes.
During an online briefing at the World Economic Forum in Davos, Finance and Economic Development Minister Professor Mthuli Ncube emphasised the importance of domestic health financing.
“Any country with an HIV/AIDS challenge will be impacted. We need to scale up our funding for health. The earmarked taxes should be directed towards health as we build our capacity to fill the gap should any funding recede,” he stated.
The WHO has played a critical role in supporting member countries, and the withdrawal of US funding could significantly diminish its impact.
Such challenges underscore the urgent need for Zimbabwe to reassess its economic strategies, especially given its reliance on external funding programmes like PEPFAR for HIV initiatives.
This reliance makes Africa, including Zimbabwe, vulnerable to shifts in international policy.
Despite these challenges, Zimbabwe has the opportunity to strengthen its economy through strategic measures aimed at mitigating the impacts of US policy changes.
Prof Ncube’s concerns highlight the necessity for Zimbabwe to mobilise domestic resources and implement proactive measures to counter potential funding losses.
To address the anticipated shortfall in foreign assistance, Zimbabwe must diversify its revenue sources. The Government can expand its tax base by introducing new levies on sectors that have been under-regulated.
For instance, implementing a tax on digital services and e-commerce could harness a growing market that remains largely untapped.
Furthermore, directing taxes on sugar and fast foods towards healthcare could promote self-sufficiency in the health sector. This approach not only addresses health challenges but also generates revenue that can be reinvested into public health initiatives.
Partnerships with local NGOs and private sector players can further lead to innovative funding solutions for healthcare, providing a buffer against external funding cuts.
Encouraging Foreign Direct Investment (FDI)
Zimbabwe can attract new investments by creating a more favourable business environment. Simplifying regulations, ensuring property rights, and providing incentives for technology transfer can make Zimbabwe an appealing destination for foreign investors.
By highlighting sectors such as renewable energy and tourism, the Government can diversify the economy and enhance its resilience.
Creating an investment-friendly climate will not only attract FDI but also stimulate local entrepreneurship.
The Government should actively engage with potential investors to showcase Zimbabwe’s resources and opportunities, thus fostering a culture of investment that benefits both local and foreign stakeholders.
Building financial literacy and inclusion
To guard against capital flight, Zimbabwe can promote financial literacy among its citizens. Encouraging citizens to invest in local businesses and Government bonds rather than seeking opportunities abroad can bolster the local economy. Establishing community investment funds could empower locals to contribute to and benefit from local economic growth.
Financial education initiatives can help citizens understand the importance of investing in their own country, thus fostering a sense of ownership and responsibility towards local economic development. By equipping citizens with the knowledge to make informed financial decisions, Zimbabwe can build a more resilient economy.
While the implications of US policies under Trump pose challenges for Zimbabwe, they also present opportunities for the Government to widen its economic strategies.
By focusing on mobilising domestic resources, diversifying revenue streams, and fostering self-sufficiency in crucial sectors like healthcare, Zimbabwe can navigate these challenges and emerge stronger.
The resilience of the Zimbabwean people, combined with strategic Government initiatives, can help mitigate the negative effects of international policy shifts.
It is essential for the Government to act decisively and creatively to transform these challenges into opportunities for a brighter economic future.
The path forward requires a comprehensive approach that emphasises local resource mobilisation and innovative financing solutions.
With determination and strategic planning, Zimbabwe can build a sustainable economic model that thrives despite external pressures, paving the way for long-term growth and stability.
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