Zimbabwe robbing motorists to keep Air Zimbabwe afloat?

Motorists in Zimbabwe pay over the odds for vehicle registration plates, as much as four times their regional peers, contributing to a fund that has been used to keep broke state-owned Air Zimbabwe in the air.

It costs $160 to get a number plate in Zimbabwe, more than the range of $12 to $40 paid by motorists in South Africa, Namibia, Botswana, Zambia, Kenya and Uganda.

Zimbabwe registration plate fees go into a ‘New Vehicle Security Registration Number Plate Revolving Fund’ set up by government to collect cash from the sale of number plates.

The fund imports blank aluminum plates for on-selling to vehicle owners.

In 2014, the fund reported $17.5 million in vehicle number plate sales, up from $16.3 million the previous year.

According to the 2015 report by the Auditor General (AG), the number plate fund has paid over $30 million on behalf of Air Zimbabwe. Between 2012 and 2013, the fund made a cumulative $23 million payments on behalf of Air Zimbabwe, without Treasury approval.

“For the second year running, the Fund made payments to some of Air Zimbabwe’s service providers, without obtaining prior Treasury authority. The payments were treated as long term loans, although there were no interest charges raised. This was contrary to the Fund’s constitution,” the AG found.

“The accumulated payments amounted to $22 909 504 (2012: $19,875,976) as at December 31, 2013. I noted with concern that all the loan agreements were not signed by Air Zimbabwe and no repayments had been received to date.”

In 2014, the fund loaned Air Zimbabwe an additional $7.6 million, with $3.7 million of the total advance being made without Treasury approval, the AG said.

In response, the fund’s management sought to justify the advances saying the airline was facing viability problems.

“Air Zimbabwe has been facing viability challenges requiring urgent financial assistance from government. Negotiations with Treasury were successful and thereafter Treasury approval has been sought and granted,” the fund’s management said.

However, the AG noted that, at the time of the 2015 audit, no proof of the claimed Treasury authority had been provided.

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