Transport and Communications Minister Mutotwe Kafwaya says the failure of Zambia Airways will not be the government’s as the airline is being run by the Industrial Development Corporation and Ethiopian Airlines.
The Centre for Trade Policy and Development (CTPD) recently said the introduction of Zambia Airways might be reversed like the sales tax because the funding model of the airline remained “elusive”.
In an interview, Kafwaya explained that Zambia Airways is owned by two companies and government has no hand in funding the airline.
“I think that’s an easy one because look, Zambia Airways is a company which is a joint venture between IDC and Ethiopian Airlines, okay. So the financing models to do with investment as well as operational funding is something that has been dealt with between the shareholders, which are IDC and Ethiopian Airlines so it’s pretty straightforward and for me, I don’t even worry because I am not part of what Ethiopian Airlines does to obtain funding for Zambia Airways. It must be clear, this is a company that has been formed by two shareholders and everything to do with this company is an agreement between IDC and Ethiopian Airlines,” Kafwaya said.
“I know that you or any other person may worry about government’s ability to contribute to the company. No, government doesn’t contribute to that, it’s IDC and Ethiopian Airlines, so these are the two entities which form Zambia Airways and they are the ones who are funding Zambia Airways for its operations as well as the investment that is required. If Zambia Airways fails, it means the shareholders have failed. The two shareholders, who even put the board in place, who even put a CEO in place, it means they have failed, it doesn’t mean the Zambian government has failed.”
He added that government’s role is to provide an enabling environment for businesses to thrive and the issue of Zambia Airways should not be compared to that of sales tax.
“Look, our role [is] just to provide an environment for business to thrive and…there is business that is done by government and business that is done by the private sector. For this particular case, yes as government, we have a stake because IDC is owned by government. However, IDC is run like a private sector institution with that nimble footedness, with the agility that is required to respond to issues of economic environment and Ethiopian Airlines is also a private company so the two companies have come together to form this company and they are making the strategies. So if it does fail, the two will have failed and that cannot be compared to a policy which is promoted and promulgated by government,” said Kafwaya.
“A policy promoted by government, like what you just referred to [sales tax], was withdrawn because other people thought that maintaining the status quo will be better off and they advanced their arguments and their arguments were accepted by government. You know we are in a democracy, you must understand that views can only be accepted or not accepted based on the weight of the argument and normally, the weight of the argument depends on who is arguing, it depends on how prepared you are.”