Zimbabwe makes progress on debt: IATA

Nelson Gahadza-Senior Business Reporter

THE International Air Transport Association (IATA) says Zimbabwe is making progress on reducing debt owed under blocked funds that could not be repatriated from ticket sales, cargo space and other activities.

The country’s outstanding debt to the association stands at US$142,7 million out of the approximately US$963 million in in-country funds belonging to air travel revenue that could be repatriated to nearly 20 countries.

“…there has been positive progress in reducing blocked funds in Zimbabwe and Bangladesh of late,” Mr Willie Walsh, the IATA’s director general said.

Four countries, including Zimbabwe, account for over 60 percent of the total debt with Bangladesh owing US$146,1 million, Lebanon US$175,5 million and Nigeria at US$143,8 million.

“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,” Mr Walsh said.

The Reserve Bank of Zimbabwe (RBZ), Governor Dr John Mangudya, in February this year said the bank was considering issuing a tradable financial instrument as part of solutions to settle outstanding foreign legacy debts.

He also noted that the central bank and the public debt management office in the Finance ministry were finalising a Blocked Funds Bill for the settlement by government of around US$2,8 billion foreign exchange liabilities contracted by Zimbabwean entities prior to the change of currency in February 2019, which could not be remitted due to foreign currency shortages.

Mr Walsh said 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,” he said.

Several international airlines that have been flying into Zimbabwe include Lufthansa Airlines, Emirates, Ethiopian Airlines, Kenya Airways, South African Airways, ComAir, British Airways and RwandAir.