International airlines flying into Harare’s Mugabe International Airport are out of pocket, with millions of dollars unable to be repatriated from the country. International airlines are among the many foreign companies waiting to repatriate around US$2.5 billion reportedly stuck in Zimbabwe. Foreign airlines have nearly US$178 million trapped in Zimbabwe they cannot repatriate. Photo: Getty Image Shortage of hard currency in Zimbabwe sparks a big problem for airlines
According to the South African news outlet, News24 , Zimbabwe owes almost $178 million to foreign airlines. That’s money those airlines have either sent into the country or collected as revenues there.
Zimbabwe banned trading in foreign currencies in 2019 amid sweeping reforms of its banking and financial sectors. The country introduced a new local currency that promptly devalued significantly against hard currencies like the US dollar.
The ban of foreign currencies created a widespread shortage and hoarding. The problem for Zimbabwean authorities is that foreign airlines don’t want to repatriate untradable Zimbabwean currency. They want their money in hard currencies. But there is none available – so it is kind of a circular problem.
Sixteen airlines fly into Mugabe International Airport from 14 countries. Many of those carriers are African – South African Airways, South African AirLink, Rwandair, Ethiopian Airlines , Kenya Airways, and Air Tanzania. Others come from further afield – Qatar Airways and Emirates, for example. A couple of adventurous airlines plan to launch flights into Harare this year – among them Lufthansa and Botswana’s Mack Air. Emirates is reportedly owed around US$51 million. Photo: Emirates Emirates the leading airline creditor
According to News24, Zimbabwe owes Emirates over $51 million. South African Airways is owed around $7 million, and AirLink is owed about one million dollars. South African Airways will happily take all the money it can get these days. Three years ago, a more solvent Emirates confirmed it had as much as $150 million stuck inside Zimbabwe.
“Our greatest threat in the last couple of years has been the devaluation of currencies and repatriation of funds. This has been massive for us, ” said Senior Vice-President of Commercial Operations in Africa for Emirates, Orhan Abbas , at the time. “ We’ve lost a lot of money on those two areas.”
Based on New24’s figures, Emirates has managed to pull $100 million out of Zimbabwe since then but remains significantly exposed. Despite this, the Chief Executive Officer of the Airports Company […]