Zimbabwe raises US$25.4 million from sugar tax

Zimbabwe has raised ZiG685.8 million, equivalent to approximately US$25.4 million, from the sugar content tax between January and May 2025, with the funds earmarked for the procurement of critical cancer treatment equipment and medication. The announcement was made by Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube during his Mid-Term Budget Review presentation on Thursday.

The sugar tax, introduced in 2024, was designed to discourage the consumption of sugary beverages due to growing concerns over non-communicable diseases linked to excessive sugar intake. Professor Ncube explained that part of the revenue generated from the levy is being ring-fenced to support cancer care through the purchase of diagnostic and treatment equipment.

"Government introduced a levy on sugar content in beverages meant to discourage the consumption of high-sugar-content beverages, in response to growing concerns about the adverse health effects of sugar," said Professor Ncube. "Part of the funds are being ring-fenced for therapy and the procurement of cancer equipment for diagnosis. During the period January 2025 to May 2025, resources amounting to ZiG685.8 million, which is equivalent to US$25.4 million, have since been mobilised."

The Ministry of Health and Child Care has already begun the procurement process. According to the ministry's Permanent Secretary, Dr Aspect Maunganidze, the ministry received a budgetary allocation of US$30 million dedicated to purchasing cancer treatment equipment. He confirmed that, in line with public procurement laws and regulations, the procurement process was divided into seven categories, or "Lots", and underwent commercial, technical, and financial evaluations.

Dr Maunganidze stated that the Procurement Regulatory Authority of Zimbabwe approved contracts for three of the Lots. Select Healthcare (Private) Limited was awarded contracts for the supply of two multi-energy linear accelerators and two wide bore CT simulators, at a total cost of US$18,882,640.27, inclusive of VAT. Another contract, valued at US$8,390,400, was awarded to Sate Wave Technologies for the supply of two low-energy linear accelerators.

However, four Lots failed to meet the required technical specifications and will be re-tendered. Dr Maunganidze did not provide details on what those Lots were intended to cover but said the re-tendering would proceed in accordance with established procurement regulations.

The new cancer treatment equipment will be installed at central hospitals in Harare and Bulawayo. According to the Ministry of Health, delivery is expected within 36 weeks from the date contracts are issued. This timeline allows for the manufacturing, shipping, installation, and commissioning of the specialised equipment.

The funding represents a significant shift in how health services are financed in Zimbabwe. When the sugar tax was introduced, there was public debate over its fairness and potential burden on low-income consumers. However, with the latest developments showing direct reinvestment into public health infrastructure, the government is positioning the tax as a health-driven and fiscally sustainable intervention.

By November 2024, over US$30 million had already been collected under the sugar tax, according to Permanent Secretary for Finance George Guvamatanga. The continued collection into 2025 suggests the levy is becoming a reliable revenue stream, particularly for addressing the country's longstanding shortages in cancer care facilities.

The move to invest sugar tax proceeds in cancer treatment infrastructure is expected to improve access to care for thousands of Zimbabweans, many of whom have had to travel long distances or seek treatment abroad due to inadequate local facilities.