Airlines flying to Zimbabwe to accept bond notes

GLOBAL and regional airlines plying the Zimbabwe route are on board with respect to using bond notes, a top airlines official has said.

Chairperson of the Board of Airlines Representatives and South African Airways country manager Ms Winnie Muchanuka said the International Air Transport Association (IATA) had accepted representations made by the Reserve Bank of Zimbabwe.

IATA's key role is to basically support the global aviation industry with global standards for airline safety, security, efficiency and sustainability.

Said Ms Muchanyuka yesterday: "From the airlines' perspective we have had recent engagements with the Reserve Bank of Zimbabwe and representatives from IATA because obviously questions have been raised from an IATA perspective as the body that represents airlines to say how is this going to work because the fundamental thing for airlines is the ability to repatriate funds to their head offices.

"But we have received assurances from the Reserve Bank that we should not worry about the repatriation of funds for foreign airlines to their head offices and that the Reserve Bank will facilitate the process.

"So airlines will be able to accept bond notes but obviously this is dependent upon the commitment of the Reserve Bank to be able to facilitate the repatriations. If repatriations are happening then there is no need for us to worry about the bond notes."

Bond notes are a financial instrument that was mooted by the central bank aimed at easing liquidity challenges, prevent illegal externalisation of funds, and incentivise exporters to sell more of their products outside the country to earn foreign currency.

In terms of the facility, the central bank will award exporters a bonus of between two and five percent of the value of total export receipts in bond notes, which will be credited to the exporters' local bank accounts.

The bond note facility has also been extended to receivers of international remittances.

Zimbabwe is currently using a basket of multiple currencies underpinned by the United States dollar. The basket also includes the South Africa rand, the euro, Japanese yen, Australian dollar, Chinese yuan, Botswana pula and Indian rupee.

Meanwhile, the Confederation of Zimbabwe Industries (CZI) and the Confederation of Zimbabwe Retailers (CZR) have put their weight behind introduction of the bond notes.