Minister of Finance, Economic Development and Investment Promotion Prof Mthuli Ncube has been thinking about how will have to fill the gap should the United States pull out of part or all the health support it now gives Zimbabwe, which is largely all the aid it gives the country.
This is still very much in the air since President Donald Trump announced three weeks ago a 90-day suspension of aid while the US Government looks into the aid being given to see if the process is efficient and if the goals of each aid programme fit in with the foreign policy of the US Government. This would include the US and Americans benefitting in some way from each aid programme.
The main programme for Zimbabwe falls under Pepfar, the President’s Emergency Programme for Aids Relief instituted by President George W. Bush and which is a major funder of the co-ordinated Aids programmes across Southern and East Africa. It has done a lot of good and essential work and is a major factor in seeing the retreat of HIV and the possibility by 2030 of zero infection rates since all those previously infected will now be on treatment with supressed viral loads and so be non-infective.
Waivers were granted by US Secretary of State Marco Rubio for some humanitarian aid to continue during the freeze, although it is still unclear how much of the Pepfar programmes are covered by the waiver and how quickly the frozen programmes released in the waiver can be brought back into operation.
On the more permanent side, we and others in Africa have to reflect on President Trumps verbal attack on South African land reform law and its foreign policy when it comes to the Middle East and especially the Israel-Palestine dispute. The US President certainly sees foreign humanitarian aid, and just about all US aid to South Africa comes under Pepfar, where South Africa is the largest recipient, as usable in pursuing US foreign policy objectives.
This differs from the approach of the previous four US Presidents, including President Trump in his first term, which kept humanitarian aid out of the political arena.
The Pepfar budget for Zimbabwe for last year and this year was US$203,4 million, being a bit higher in 2023 when there was some statistical analysis to be done but with the same US$203,4 million budget for the normal continuing programmes. There were some other more one-off aid programmes for Zimbabwe, plus the support for certain civil society groups.
The first priority for Prof Ncube is to prepare to cope with the gap created if Pepfar is discontinued or is reduced significantly in scale. There is a modest buffer, according to the National Aids Council, with some stocks of the medication needed for anti-retroviral treatment (ART) on hand, but obviously we need to think how quickly we can build up these stocks.
Prof Ncube has been musing about ringfencing for health budgets what are colloquially called the sin taxes, those on tobacco products, alcohol and gambling, along with the already ring-fenced sugar drink tax and the new fast food tax.
The arguments for charging these taxes in the first place and then ringfencing them for health spending are because smoking, drinking alcohol, eating too much sugar and eating highly processed fried foods are not healthy activities, and so push up needed spending on health as those who do these things need more medical attention, on average.
Gambling is often included as there is a feeling that while not a direct unhealthy activity it sort of belongs in the same group of taxes on things that could be fun if they were not unhealthy.
One advantage of ringfencing these taxes is that it is easier to raise them with fewer of the screams of anger and outrage that all tax rises bring. All tax rises are unpopular by their very nature, but some are more unpopular than others.
Even the most dedicated smokers and drinkers are aware that lighting up a cigarette or drinking a beer are not the most healthy activities, and those who like sugary dinks and fried fast foods have seen the health warnings.
There is also that sanctimonious feeling, and Prof Ncube should not ignore this, when a heavy smoker can sit back and say that a couple of lucky people are getting ART as he ploughs through a couple of boxes of cigarettes a day.
It is likely that the “sin taxes” and the Aids levy will between them be inadequate to fill all the gaps although some of the most crucial can be filled. These would be the ART treatment, which for most Zimbabweans has to be free although we might need better means-testing and even have an intermediate half-price zone, and the testing for both infection and virus loads.
The treatment support also included support for tuberculosis treatment, since that disease is, in Zimbabwe, fairly closely related to the number of people who are HIV positive with non-supressed viral loads. It is the most common infection in those who immune system is breaking down.
After that comes prevention, and this includes the preventative treatments to prevent mother-to-child transmission, part of which are covered by maintaining full testing, and then the rather trivial sum, all things considered, of US$3,8 million for free condoms.
If Zimbabwe has to shoulder the burden or part of the burden, covered by the United States over the past two decades, then we could make some administrative savings. Pepfar administrators like to contract non-government organisations for much of what they support, which they were entitled to as it was their money.
In Zimbabwe the general co-ordination of the Ministry of Health and Child Welfare made sure that each government and non-government programme fitted into the whole, and that there was no duplication with some being left out. However this sort of aid emphasis can drive up costs by having an extra layer of administration in the NGOs.
The actual health staff working under NGOs will need to be retained, perhaps directly under the Ministry of Health and Child Welfare, perhaps under some other entity under the Health Services Commission, or perhaps under the National Aids Council. But the administrative layer could be assumed by the Ministry without increasing staff costs.
There was also a significant budget for gathering data and statistics, which is important, but again much of that could be handed over to ZimStat with an additional budget well below what Pepfar was paying out.
Prof Ncube has twice had to face serous emergencies since he took office: the Covid-19 pandemic and the exceptionally serious drought last year. In both cases he found the extra money without using the printing presses. This was largely done by juggling the budget, cutting back on some capital development while increasing the health or social service costs.
Filling the gap in the health budget if there is a major pull-out of United States support is certainly no worse than those two major upsets.
But it is also useful that the Minister is looking beyond just emergency spending for filling a short-term gap and is looking what may or may not be needed permanently.
This is why he is looking at ring-fencing certain taxes as one possible solution, and we think that is good idea.
Heath staff have already been split off from the rest of the Public Service with the establishment of the Health Services Commission, so to a degree health services are separate from the rest of the Government.
