…they are important to the economy
Treasury set aside a budget to purchase new planes for the national carrier, Air Zimbabwe in their 2022 Budget Presentation in November 2021, but the year ends with nothing on that front.
In excitement, a local paper reported the words of the esteemed Minister of Finance Prof. Mthuli Ncube of the promise to buy planes in 2022. Treasury truly knows the importance of the investment to the economy through revenue and employment.
As reported by The Herald in January 2022, “The nation’s flagship carrier, Air Zimbabwe is set to be recapitalized through the acquisition of new planes as well as expand routes in 2022, with support from Treasury in its six-year strategic turn-around plan.
“Such a plan was unveiled by the Treasury chief, Finance and Economic Development Minister Prof Mthuli Ncube in his budget proposal to parliament a week ago. Ncube revealed that government was going to set aside a total of $1,5 billion (US$14,3m) in order to support Air Zimbabwe.”
In his own words Prof. Ncube told parliament, “In support of the turnaround Plan, the 2022 National Budget is allocating ZWL$1.5 billion for recapitalisation of the national airline towards operational costs and the acquisition of aircrafts.”
This pledge came after government agreed to assume a US$30 million debt and $316 million local debt from the national carrier, in order to make it debt free and let it start on a clean slate.
Air travel remains the only true global rapid transport system and is a key driver of economic growth, job creation and supporter of global trade and tourism.
As a country we face a crisis of stagflation (low economic growth and high inflation), record unemployment, infrastructural deficiencies and the knock-on effects of load-shedding. We’ve proved time and again that we are a resilient nation, but if we are to turn things around we need to act with urgency and implement changes that will drive economic growth and create opportunities for employment and airlines are also included.
While addressing the causes of load-shedding and achieving a reliable energy supply remains a top priority, another crucial sector in our economy that the airline industry supports is the tourism sector.
According to Treasury, in 2021 the sector contributed 1.7% to GDP, down from about 5% of GDP pre-Covid.
Data from the Airports Company of Zimbabwe (ACZ) shows that as of October this year domestic passenger volumes had recovered to about 75% of 2019 levels, while regional and international passenger volumes lag this slightly at 69% and 71%, respectively.
The recovery is under way, but we’re not there yet, and the global consensus is that we won’t see a full recovery until the end of 2023. A responsible approach to recovery and adding seat capacity is crucial.
Failed airlines mean unemployment, and not just those directly employed by the airline. Others like cleaners and ground staff, as well as businesses, such as catering companies, are also left with unpaid bills and no future business prospects when airlines go under – Harare