Zimbabwe Owes US$142 Million To International Airlines
23 August 2021
The International Air Transport Association (IATA) has reported that Zimbabwe owes US$$142 million to international airlines from ticket sales, cargo space and other activities.
News24 cites IATA as saying about $963 million (R14.6 billion) in airline funds, including Zimbabwe's US$142 debt, are being blocked from repatriation in nearly 20 countries.
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Other countries that owe substantial amounts were Bangladesh ($146.1 million), Lebanon ($175.5 million) and Nigeria ($143.8 million).
IATA noted that these countries' debt alone accounts for more than 60 per cent of the total amount owed adding that there have been recent positive progress in reducing blocked funds in Bangladesh and Zimbabwe.
In Zimbabwe, the introduction of the foreign currency auction system where economic players can bid for foreign currency has also helped in making foreign payments as well as to repatriate funds. According to IATA director general Willie Walsh:
Governments are preventing nearly $1 billion of airline revenues from being repatriated.
Airlines will not be able to provide reliable connectivity if they cannot rely on local revenues to support operations. That is why it is critical for all governments to prioritise ensuring that funds can be repatriated efficiently. Now is not the time to score an 'own goal' by putting vital air connectivity at risk.
We encourage governments to work with industry to resolve the issues that are preventing airlines from repatriating funds. This will enable aviation to provide the connectivity needed to sustain jobs and energise economies as they recover from Covid-19.
Commenting on the report, MDC Alliance Treasurer-General, David Coltart, said these reports make it difficult to believe claims by Finance and Economic Development Minister, Professor Mthuli Ncube that Zimbabwe has been registering a surplus since 2018. Said the former Education minister:
This is yet another reason why Mthuli Ncube and the likes of Eddie Cross’ claims - that we have a surplus, inflation is coming down, the economy is on the up etc - are pure fiction. According to this report #Zimbabwe owes foreign airlines, principally @flysaa, US$142 million.
Some suggested the alleged surplus could be in Zimbabwe dollars which means the Southern African country could not pay IATA hence progress after the introduction of the forex auction system.
In July this year, World Bank country economist Stella Ilievak said the alleged surplus was not superficial as critics say. She, however, warned the government against taking comfort in the proclaimed fiscal surplus as it does not include future liabilities such as the country’s debt overhang.
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