Zambia airways is another case of sales-CTPD

The Center for Trade Policy and Development (CTPD) is greatly concerned with the poor management of the decision to relaunch Zambia Airways.

The limited consultation,poor planning, lack of transparency, inclusiveness, and limited engagement with the public parallels the decision to introduce a sales tax. Just like the decision to replace VAT with Sales Tax, the relaunch of Zambia Airways has been postponed many times on account of poor projections and planning-all in the midst of an adamancy to implement the decision regardless of the views of critical stakeholders.

The government claims to have a comprehensive business model and financial projects, but these have not been presented to key stakeholders or the general public, the same way as the much talked about sales tax simulations which were never made public.

Considering the government’s fiscal position and Zambia’s current economic situation, CTPD will continue to advise the government to halt its decision to relaunch Zambia Airways and focus on improving its plans through background work and stakeholder consultation, until such a time as would be economically and fiscally allowing for the relaunch.

This recommendation was arrived at after detailed assessments of the economic environment, fiscal position, and case studies of South African Airways, Ethiopian Airlines and Malawian Airline, the latter being a classic case of an Ethiopian partnership which has failed to generate profits.

It has also been established that the Ministry of Transport and Communication, and IDC are not in agreement concerning the appropriate business model.

CTPD is also concerned that even at this stage, the financing options for Zambia Airways continue to be elusive. Considering the recent default on only US$1.4 million towards servicing the African Development Bank (ADB) loans and drag in sourcing funds for electricity importation from South Africa, Zambians should indeed be wondering how government seeks to finance the lease of plans and operations of Zambia Airways.

It is surprising that government has continued to push for the relaunch of Zambia Airways through establishing a board of directors and recruiting employees who are already drawing salaries, when the general public does not know the source of these funds.

If Zambia Airways is to succeed, government should become more accommodating of divergent views for the betterment and refinement of their plans.

We therefore urge the government to make public the business plan, the lease agreement, the management agreement, and MOUs signed with Ethiopian Airlines and others because they are a number of local aviation experts who are well able to advise government on these critical areas.

CTPD also advises IDC and the Ministry of Transport and Communication to stop ignoring public concerns regarding the decision to relaunch Zambia.


Bright Chizonde CTPD Researcher

5

Leave a Reply

Your email address will not be published. Required fields are marked *