IATA laments Zim’s $136m airlines debt

Reserve Bank of Zimbabwe governor John Mangudya

THE International Air Transport Association (IATA) has urged government to pay international airlines who are owed $136 million in repatriation debt to stop them from abandoning flights into the country.

By Nokuthaba Dlamini

Zimbabwe is facing an acute shortage of US dollars and is failing to pay for critical imports while companies are failing to repatriate earnings.

Speaking at the Tourism Business Council of Zimbabwe last week, IATA’s head of account Management, South and East Africa, Alexandru Stancu, said government should allocate funds to support the sector while paying off the international debt.

He said it was disappointing that the Reserve Bank of Zimbabwe (RBZ) had failed to meet its pledge to settle the debt, forcing other airlines to resort to threats.

“Governments need to understand the powerful influence airlines play in tourism around the world,” Stancu said.

“The country is dependent on tourism, from the operational perspective the airlines fund repatriation remains a critical issue.

“The airlines are crippled by the inability to repatriate their funds outside the country. The balance at the end of August this year was $136 million with no allocation, no execution of the commitment earlier made by RBZ. This impediment pushes many airlines reviewing the distribution strategy and eventually withdraw operations from Zimbabwe which will negatively affect the country in the long term.”

Stancu said international agreements and treaty obligations allow the airlines to repatriate revenues from ticket sales and other activities from countries of operation.

He said 35% of the world trade value worth $6,4 trillion is made by air transport annually.

“Last year, 55% of the international tourists travelled to destinations by air. Consequently, tourism plays an increasing important role in economies in the world as governments move away from primary industries,” Stancu said.

“When planned carefully, tourism is a positive and sustainable source of national income and jobs with long term benefits. When it comes to Zimbabwe, the tourism represent 10,4% of the total country’s gross domestic product while in jobs one out of ten is supported by the travel tourism sector for over the past decade.

“Zimbabwe ranks 114 out of 136 in the World Economic Forum and Tourism Competitiveness according to the world report. Tourism services and infrastructure resources must be carefully managed in order to attract more tourists.”