Home » Africa: IATA meets Zimbabwe’s Mnangagwa over US$196 million owed to airlines

Africa: IATA meets Zimbabwe’s Mnangagwa over US$196 million owed to airlines

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The International Air Transport Association (IATA) says it has met Zimbabwe’s President Emmerson Mnangagwa to discuss, among other issues, the release of US$196 million in revenue owed to airlines by the cash-strapped southern African country.

Zimbabwe’s economy has been in crisis for the greater part of two decades, partly manifested in acute foreign currency shortages as the export sector struggles.

The government recently banned the local use of foreign currencies including the US dollar and the rand, a system it had adopted in 2009 after hyperinflation rendered the Zimbabwe dollar virtually worthless.

In a statement issued on Tuesday, IATA director-general Alexandre du Juniac said aviation was a key contributor to Zimbabwe’s prosperity, but funds from the sale of air tickets in the country currently could not be repatriated to airlines.

“It will be negative for business, trade and tourism if airlines are forced to reduce their service to Zimbabwe,” he said.

“A key topic addressed (in meeting with Mnangagwa) was the need to find a mutually acceptable and workable solution for the release of US$196 million in revenues owed to airlines and ensuring current levels of air transport services.”

He said the meeting was fruitful and showed a united commitment to finding an appropriate solution.

Further joint meetings between IATA and Zimbabwe’s government had been scheduled to immediately finalise the definition of a framework for the return of airlines’ revenues and to implement it while also preventing the accumulation of further debt, du Juniac added.

The IATA said aviation and tourism combined were about the third largest contributor to Zimbabwe’s economy, with travel and tourism accounting for almost US$1.2 billion or 7.1 percent of total gross domestic product in 2017.

This was forecast to increase to almost 10 percent of GDP in 2019 if the aviation and tourism services in the country were sustained.

In 2017, aviation and tourism supported about 70,000 jobs in Zimbabwe, translating to approximately 4.5 percent of direct and indirect employment, although this fell slightly in 2018.

“Unfortunately, uncertainties linked to the recent monetary policy reforms, which were implemented to foster economic stability, have had the unintended consequence of reducing the volume and value of air transport sales in Zimbabwe, which has negatively impacted its GDP and competitiveness,” IATA said.

Source: iol.co.za

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