By Itai Rusike
The 2025 Mid-Term Budget and Economic Review, presented by the Minister of Finance, Economic Development and Investment Promotion on 31 July 2025, comes at a time when Zimbabwe is recovering from a tough economic year. A projected economic rebound to 6.0% in 2025, from 1.7% in 2024, largely attributed to a strong agricultural season, is commendable. However, the country remains largely informal, with 76.1% of businesses operating outside the formal economy. This high informality weakens domestic resource mobilisation, constraining sustainable development.
Public debt remains a critical challenge. Zimbabwe’s unsustainable external debt levels continue to restrict access to concessional financing and international markets, negatively impacting growth and service delivery. Debt servicing during the first half of 2025 amounted to ZiG2.5 billion—ZiG1.2 billion for external and ZiG1.3 billion for domestic debt—compared to ZiG3.5 billion spent on social protection. This crowding out of social spending undermines efforts to build a healthy and educated population.
The health sector remains in distress. Shortages in healthcare personnel, inadequate infrastructure, high disease burden, and expensive specialist services continue to affect service delivery. These systemic issues are compounded by low public spending on health, weak financial protection mechanisms, and poor decentralisation. Ultimately, it is the poor who suffer most, facing high out-of-pocket costs and limited access to quality care.
Rights-Based Budgeting for Inclusive Development
A pro-poor, inclusive growth strategy must place people and their basic needs at the centre of national planning. A rights-based budgeting framework should ring-fence social spending and commit to regional and global benchmarks. Zimbabwe is party to various international declarations that prescribe minimum spending levels for key social sectors:
| Sector | Target Agreement | Spending Benchmark |
|---|---|---|
| Health | Abuja Declaration (2001) | 15% of total government expenditure |
| Education | Education for All Initiative (2000) | 20% of total government expenditure |
| Social Protection | Social Policy for Africa (2008) | 4.5% of GDP |
| Water & Sanitation | eThekwini & Sharm El-Sheikh Declarations (2008) | 1.5% of GDP |
| Agriculture | Maputo Agreement (2003) | 10% of total government expenditure |
| Infrastructure | AU Declaration (2009) | 9.6% of GDP |
Mid-Year Fiscal Performance
From January to June 2025, government revenue reached ZiG101.2 billion (6.8% of GDP), mainly from taxes (96%). Total spending stood at ZiG98 billion, reflecting 35.5% of the annual budget. Though this created a nominal surplus of ZiG3.3 billion, spending remains below target. Recurrent expenditures dominated (75.9%), particularly employment costs (ZiG45.4 billion), while capital spending and net lending comprised 24.1%.
| Indicator | Outturn (ZiG billion) | % of Total Revenues | % of GDP |
| Total Revenue | 101.2 | 100 | 6.8 |
| Tax Revenue | 97.1 | 96 | 6.5 |
| Non-Tax Revenue | 4.1 | 4 | 0.3 |
| Total Expenditures & Net Lending | 98.0 | 100 | 6.5 |
| Compensation of Employees | 45.4 | 46.3 | 3.0 |
| Use of Goods and Services | 18.8 | 19.2 | 1.3 |
| Social Benefits | 3.1 | 3.2 | 0.2 |
| Subsidies | 3.9 | 4.0 | 0.3 |
| Interest | 2.5 | 2.6 | 0.2 |
| Net Acquisition of Financial/Non-Fin Assets | 23.6 | 24.1 | 1.6 |
| Budget Balance | 3.3 | – | 0.2 |
Public Social Spending Trends
In the first half of 2025, only ZiG7 billion (US$259 million) was spent on health—7.1% of public spending, well below the Abuja target. Budget execution stood at 25%. Per capita public health spending was ZiG460 (USD17), and only 0.5% of GDP went to health.
| Sector | Target (% GDP or Gov. Expenditure) | 2021 | 2022 | 2023 | 2024 | 2025 H1 |
| Social Protection | 4.5% of GDP | 0.8 | 0.9 | 0.6 | 1.5 | 0.2 |
| Health | 15% of gov. expenditure | 13.0 | 10.6 | 11.2 | 10.6 | 7.1 |
| Education | 20% of gov. expenditure | 13.1 | 13.4 | 14.9 | 17.7 | 13.4 |
| Water & Sanitation | 1.5% of GDP | 0.2 | 0.5 | 0.1 | 0.4 | 0.3 |
| Agriculture | 10% of gov. expenditure | 11.0 | 13.6 | 8.5 | 7.3 | 10.4 |
| Infrastructure | 9.6% of GDP | 5.5 | 4.8 | 5.3 | 6.3 | 1.6 |
Per capita and GDP share of health expenditure have declined sharply:
| Year | Public Health Expenditure (% of Gov. Expenditure) | Per Capita (USD) | % of GDP |
| 2024 | 10.2 | 65 | 2.1 |
| 2025 H1 | 7.1 | 17 | 0.5 |
Budget Execution by Ministry, Department, or Agency (MDA)
The following table reflects vote allocations and budget utilisation by MDAs:
| Ministry / Department | Budget (ZiG$m) | Expenditure (ZiG$m) | Utilisation (%) |
| Health and Child Care | 27,827 | 6,980 | 25 |
| Public Service, Labour and Social Welfare | 11,710 | 2,789 | 24 |
| Primary and Secondary Education | 42,517 | 13,133 | 31 |
| Lands, Agriculture, Water & Rural Resettlement | 22,935 | 10,178 | 44 |
| Office of the President and Cabinet | 10,568 | 8,524 | 81 |
| Transport and Infrastructural Development | 5,444 | 6,305 | 116 |
Low execution in health and social protection sectors is worrying given prevailing poverty and service delivery gaps.
Conclusion
The 2025 Mid-Term Budget Review reveals a persistent mismatch between policy intent and actual spending. Health and other social sectors remain underfunded, while debt service continues to take precedence. The government must urgently increase public spending on health and the social determinants of health in line with national needs and international obligations.
Transparent and accountable management of domestic resources—especially taxes like the sugar levy—is essential to restoring public trust and strengthening health system resilience. Zimbabwe cannot achieve inclusive, sustainable development without adequately investing in its people.
