Assessing the Impacts of Exchange Rate Volatility on Donor-Funded Projects: The Case of iDE Zambia

Majorie Siamwaala and Yohane Romeo
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Majorie Siamwaala: Graduate School of Business, University of Zambia
Yohane Romeo: School of Humanities, University of Zambia

African Journal of Commercial Studies, 2026, vol. 7, issue 3

Abstract: Exchange-rate volatility remains a critical constraint on donor-funded development programmes in low- and middle-income countries, yet its transmission mechanisms across programme and beneficiary levels remain insufficiently understood. This study examines the effects of exchange-rate volatility on financial performance, operational efficiency, and social outcomes of donor-funded programmes in Zambia, using iDE Zambia as a case study over the period 2015–2025. A mixed-methods approach was employed, integrating econometric trend analysis, regression modelling, and descriptive statistics with qualitative insights from surveys (n = 157), key informant interviews, and document review. The analysis is grounded in Exchange Rate Pass-Through (ERPT) theory and Contingency Theory to explain how macroeconomic shocks influence organisational performance and development outcomes. Findings reveal that the Zambian Kwacha depreciated by over 300% against the US dollar during the study period, with notable volatility spikes in 2016 and 2020. Regression results indicate statistically significant effects of exchange-rate volatility on financial disruption (β = 0.68, p

Keywords: Exchange-rate volatility; Donor-funded programmes; Financial performance; Programme resilience; Mixed methods; ERPT theory; Contingency Theory; Development effectiveness; Zambia (search for similar items in EconPapers)
JEL-codes: F31 O23 O55 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:cwk:ajocsk:2026-88

DOI: 10.59413/ajocs/v7.i3.18

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