ZWL1.5 billion Zimbabwean dollars (USD4.1 million at the RBZ exchange rate) has been allocated by the Zimbabwean government for the recapitalization of Air Zimbabwe (UM, Harare Int’l), which will be used for the acquisition of new aircraft as well as route expansion, digitalization, and a lean workforce.
Mthuli Ncube, Minister of Finance and Economic Development revealed this during his speech on the 2022 national budget on November 25. Recapitalization is in support of the six-year strategic turnaround plan of the national airline, he said.
Following the completion of the reconstruction plan in June 2021, Air Zimbabwe is now a commercially viable company. National airline’s debt assumption and the settlement of domestic and some foreign debt were approved by Cabinet, Ncube said. Previous reports stated that in May 2021, Harare had given its approval to the airline’s reconstruction plan. An international debt of USD30 million and a local exposure of ZWL349 million (USD873,000) had been accrued by the carrier. A total of USD349 million was actually owed to domestic creditors, but their debts were converted to new Zimbabwe dollars at the official 1:1 exchange rate.
Priority will be on implementing and executing the airline’s plan to ensure it acquires requisite equipment and routes network expansion as well as appropriate information communication technology systems (ICT) to ensure that the airline remains competitive.
Recapitalization of the national airline will be funded by ZWD1.5 billion in the 2022 National Budget, which is part of a turnaround plan.