National carrier Air Zimbabwe’s bid to lure investors suffered a big blow when it emerged this week that the airline had failed to attract new investors.
Left licking the wounds, government announced that it would raise the capital required for the operations of its 100 percent owned airline.
Put differently, AirZim will continue to rely on government coffers further haemorrhaging the cash strapped treasury.
As part of the plan by the government to strengthen the company’s balance sheet and ensure its going concern status, Air Zimbabwe is going to lease two Boeing passenger planes acquired from Malaysia pending re-introduction of direct flights to China and London.
In an interview with Business Times, Air Zimbabwe administrator Regis Saruchera of Grant Thornton and Camelsa said the liquidation of the national carrier was no longer in the horizon following the government’s commitment.
He said the government has expressed commitment to raise capital for operations of the national airliner while availing assets to boost its fleet.
“Boeing 777 is now part of our assets and another plane is expected in the next four weeks.
Government has since taken an initiative to capitalise the operations and the issue of liquidation is no longer on the horizon,” he said.
“Government is looking at funding the Air Zimbabwe operations and the issue of equipment for operations is key for any airline company.”
Failure by AirZim to attract investors reflects on the attractiveness or (lack of) government assets earmarked for privatisation.
For an economy which largely depends on internally generated revenues to fund its projects, privatisation of perennially loss-making state-owned enterprises was not only seen as one of the key reforms promised by government but the exercise was expected to ease the burden on state coffers.
Now it’s back to square one. While the soul-searching exercise continues, government should improve corporate governance in public institutions.
Most parastatals have been rocked by a series of scandals that have prejudiced the state of funds running into several millions of dollars.
The process of commercialising state-owned enterprises requires comprehensive probes at these entities and putting in place systems that will ensure that those mandated to run them may do so in an efficient and transparent manner.
A culture of accepting mediocrity, greed and incompetence at such institutions takes away the glitter from these establishments.
Zimbabwe has a lot to learn from the Chinese model of state capitalism. Promoting a culture of accountability and cleaning up the closet should be the starting point.