Air Zimbabwe is in such shambles and its financial position so hopeless it would be difficult to find takers even if the government decided to offload it, a Cabinet minister has said.
State Enterprises and Parastatals minister Gorden Moyo on Wednesday told the Parliamentary Portfolio Committee on State Enterprises and Parastatal Management finding an investor to buy the ailing airline was likely to prove a mammoth task.
Moyo was responding to a question by Chiredzi North MP, Ronald Ndava, a member of the Portfolio Committee chaired by Zvishavane-Runde MP, Lawrence Mavima, who had asked him to explain why his ministry was not disposing of loss-making parastatals that were draining the fiscus.
“There are certain entities where we think surely, government should be out of,” Moyo said.
“But it may not be easy to sell Air Zimbabwe right now even if you want to offload it because you may not find a taker because of its state,” he said.
Moyo however said the difficulties facing Air Zimbabwe were not unique to Zimbabwe as a lot other airlines around the globe were performing very poorly. He cited Zambia Airways as an example.
“It is not just Air Zimbabwe which is suffering — very few airlines are doing business and it might be a big problem to sell Air Zimbabwe. A lot of parastatals are faced with huge debts and this on its own makes our parastatals unattractive to suitors. To get investors investing in a shell is not easy because of this debt overhang,” Moyo said. Moyo indicated most of the equipment in the country’s parastatals was dilapidated and archaic. To get investors to inject funds into businesses that were going under was not easy.
“The fiscal space is also too constricted to inject capital or even expertise into these entities especially given the serious human capital flight Zimbabwe has suffered,” he said.
State Enterprises and Parastatal Management deputy minister Walter Chidakwa said the issue of marketability to suitors by ailing parastatals was affected by tariffs.
“The investor looks at prices in Zimbabwe and compares them with those in the world. He looks at whether he will be able to recover his investments and we end up in this dilemma,” said Chidakwa.