FBC Securities Private Limited, a Zimbabwe Stock Exchange-listed stockbroker, has urged the government to take action following the US foreign aid freeze, warning that the move could destabilise critical sectors, worsen exchange rate volatility, and accelerate inflationary pressures.
This call follows the announcement by US President Donald Trump of the country’s withdrawal from the World Health Organisation (WHO) and the freezing of funding to PEPFAR (President’s Emergency Plan for AIDS Relief).
The ban on US foreign aid spending threatens to disrupt antiretroviral drug (ARV) supplies and resources for HIV, tuberculosis (TB), and malaria programs in Zimbabwe.
In a statement titled “US Foreign Aid Halt: Impact on Zimbabwe’s Economy,” FBC Securities Pvt Ltd noted that the aid freeze exacerbates liquidity constraints, foreign currency shortages, and inflationary pressures.
Foreign aid has historically been important to Zimbabwe, supporting healthcare, food security, infrastructure, and social programmes.
Now, with reduced donor inflows, the banking sector, stock markets, and formal businesses may struggle to maintain stability. The statement reads:
<blockquote>
To mitigate these challenges, the Zimbabwean Government must take decisive action by strengthening domestic revenue mobilisation, restoring investor confidence, restructuring state-owned enterprises (SOEs) and improving governance and fiscal discipline,.
Pursuing debt resolution efforts with multilateral institutions, diversifying export earnings and fostering a stable macroeconomic environment will be crucial for weathering the impact of declining external support and ensuring long-term economic resilience.
</blockquote>
FBC Securities suggested that Zimbabwe could seek alternative funding from other international donors, regional partners, and non-traditional allies such as the African Union, Southern African Development Community (SADC), and countries in the global south for financial and technical assistance.
The organisation noted that donor-funded projects and direct humanitarian assistance contribute to local foreign currency liquidity circulation, with NGOs and humanitarian organisations distributing US dollar payments to local suppliers, employees, and contractors.
FBC Securities revealed that NGOs contributed 10 per cent and 9 per cent of total foreign currency receipts into Zimbabwe from January to September 2023 and January to September 2024, respectively. 
The organisation warned that the reduction in these cash inflows would result in less disposable income, affecting consumer spending, particularly in rural and vulnerable communities. FBC Securities said:
<blockquote>
The freeze will also exacerbate foreign currency shortages in the economy, making it harder to finance imports and working capital requirements of private sector businesses.
</blockquote>
FBC Securities highlighted several impacts, including reduced deposits in Foreign Currency Accounts (FCAs), decreased foreign currency inflows, lowered stock market liquidity, and increased volatility in blue-chip stocks.

Pindula News

US aid freeze from the US could hurt Zimbabwe's economy. This could make it hard to get medicine for diseases like HIV and malaria. The country needs to find new ways to get money and help from different countries. The government must work hard to fix the economy and keep things stable. Without help from the US, Zimbabwe may struggle to pay for important things like imports and businesses may face difficulties. It's important for Zimbabwe to find new ways to get money and keep their economy strong.

US Aid Freeze Poses Risk To Zimbabwe’s Economic Stability, Says FBC Securities

U.S. Secretary of State Marco Rubio has issued a new waiver allowing humanitarian assistance programs to resume, despite a freeze on foreign aid.
The waiver enables the continuation of existing programs that provide essential medicines, medical services, food, shelter, and other vital assistance. Said Rubio:
<blockquote>
For the purposes of carrying out the President’s Executive Order on Reevaluating and Realigning United States Foreign Aid, I am approving an additional waiver of the pause under the Executive Order on Reevaluating and Realigning United States Foreign Aid and my subsequent direction of January 24, 2025, for life-saving humanitarian assistance during the period of the review.
Implementers of existing life-saving humanitarian assistance programs should continue or resume work if they have stopped, subject to the following directions. This resumption is temporary in nature, and except by separate waiver or as required to carry out this waiver, no new contracts shall be entered into.
1.  (a) For purposes of this waiver, life-saving humanitarian assistance applies to core life-saving medicine, medical services, food, shelter, and subsistence assistance, as well as supplies and reasonable administrative costs as necessary to deliver such assistance.
(b) This waiver does not apply to activities that involve abortions, family planning, conferences, administrative costs other than those covered by 1(a) above, gender or DEI ideology programs, transgender surgeries, or other non-life saving assistance.
(c) Migration and Refugee Assistance (MRA) may only be used to support activities under section 1(a) and for repatriation of third country nationals to their country of origin or safe-third-country.
2. Additional waivers or exceptions for humanitarian assistance not covered by this waiver may be sought through the Director of Foreign Assistance at the Department of State. Implementing partners and NGOs are to work through their U.S. government agency partners on such requests.
</blockquote>

The U.S. has allowed some aid programs to continue despite a freeze on foreign aid. This waiver will help provide essential items like medicine, food, and shelter to people in need. The waiver is temporary and only applies to life-saving assistance, not things like abortions or gender programs. Implementers of existing aid programs can continue their work, but no new contracts can be made. Any other humanitarian assistance not covered by the waiver must be approved by the Director of Foreign Assistance.

USAID Latest News

Latest Jobs