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‘Quarantine’ Zambia Airways launch – CTPD

LINDA SOKO TEMBO writes

@SunZambian

THE decision to relaunch Zambia Airways should be “quarantined” due to the increased risk of failure and the need for fiscal discipline says Centre for Trade Policy and Development (CTPD).

CTPD Senior Research Bright Chizonde said that the COVID-19 pandemic that had also unleashed an unprecedented impact on domestic, regional and intercontinental air travel.

He said that even before the global spread of the virus, the Centre had continued to advise the Zambian government to halt any decision to relaunch Zambia Airways due to a high risk of failure, poor business and financing model as well as a compromised fiscal position.

In a statement, Mr Chizonde said that the country had recently found itself struggling to comprehensively develop a bailout package to mitigate against the impact of COVID-19 due to lack of fiscal space.

He said that the country had since been engaging both domestic and foreign stakeholders to complement government’s efforts.

“CTPD thinks that the decision to relaunch Zambia Airways should be “quarantined” due to the increased risk of failure and the need for fiscal discipline.

“Firstly, the global tourism and air transport sector has suffered the most direct negative impact of the COVID-19 pandemic,” he said.

Mr Chizonde said that  International Air Transport Association (IATA) estimated that worldwide flights were 70% lower at the start of April 2020 as compared to the first quarter of 2020 and that the drop was projected to continue on account of travel slowdown and regional restrictions. He said that the CAPA Centre for Aviation projects that by the end of May 2020, most airlines in the world would be bankrupt. Mr Chizonde said that it was therefore clear that the environment was no longer allowing Zambia Airways to be re-launched and that Government should therefore take actions to “quarantine” the decision.

“Secondly, the Minister of Finance Bwalya Ng’andu recently announced that Zambia has applied to the World Bank, the African Development Bank and Afrexim bank to be considered for support under their various COVID-19 Emergency Funds,

“Engagements with the Bilateral Partners centered around the possibility of them meeting the financing gap arising from the adverse effects of COVID-19 on the country’s fiscal position have also be initiated,” he said. 

Mr Chizonde said that CTPD believed that any move by government towards the relaunch of the airline, such as the delivery of planes and consequent commencement of payment towards the lease of these planes, would reflect a serious lack of fiscal discipline.

He said that CTPD advised government to stop taking steps towards the re-launching of Zambia Airways.

Mr Chizonde said that it was time to focus all the available public resources on fighting COVID-19 and its economic impact through a meaningful recovery program and investing in sectors that could help stimulate economic growth and ultimately contribute towards reducing poverty.

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