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

Author

Listed:
  • Siamwaala, Majorie

    (Graduate School of Business, University of Zambia)

  • Romeo, Yohane

    (School of Humanities, University of Zambia)

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

Suggested Citation

  • Siamwaala, Majorie & Romeo, Yohane, 2026. "Assessing the Impacts of Exchange Rate Volatility on Donor-Funded Projects: The Case of iDE Zambia," African Journal of Commercial Studies, African Journal of Commercial Studies, vol. 7(3).
    • Handle: RePEc:cwk:ajocsk:2026-88
    DOI: 10.59413/ajocs/v7.i3.18
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    References listed on IDEAS

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    1. World Bank, 2022. "Global Economic Prospects, June 2022," World Bank Publications - Books, The World Bank Group, number 37224, April.
    2. World Bank, 2022. "Global Economic Prospects, January 2022," World Bank Publications - Books, The World Bank Group, number 36519, April.
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    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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