South African Airways, the national airline that has entered a form of bankruptcy protection, may only be offered 5% of the $60 million that it is owed by neighbouring Zimbabwe in funds from ticket sales which it has not been able to extract from the country.
The central bank’s Monetary Policy Committee plans to “reject the majority of debts” owed to institutions, a move it hopes will save Zimbabwe much needed foreign currency, Eddie Cross, a committee member, said. The country is unable to pay for adequate fuel and wheat imports.
“We will ask that a haircut be taken by creditors,” said Cross in a December 5 interview in the capital, Harare.
In February, the central bank took over US$1,2 billion of legacy debt when it dropped the 1:1 parity between its currency and the US dollar. The Zimbabwe dollar now trades at 16,42 to the greenback on the interbank market.
Cross put the legacy debt at US$2,6 billion, more than double the central bank’s previously stated figure. He didn’t provide further details.
His comments on legacy debt echo similar views made last month by George Guvamatanga, the permanent secretary in the Finance ministry, that institutions owed legacy debt should consider writing down some of the amount.
The International Air Transport Association in July said foreign airlines were owed US$196 million by the southern African nation.
“We believe that the Government of Zimbabwe will honour its obligations and enable the repatriation of funds to SAA,” Tlali Tlali, a spokesman for the company said. “There has been some progress in attending to the current balance. We are optimistic that even the legacy amounts owing will be attended to.”
He declined to confirm how much the airline is owed.