A man cycles past SAA aircraft parked at OR Tambo International Airport. Picture: Getty Images
A man cycles past SAA aircraft parked at OR Tambo International Airport. Picture: Getty Images

Anyone in Zimbabwe can nip along to SAA’s lovely offices in Harare to book and pay for a holiday overseas at about a half to a third of the real price. Paying with Zimbabwe’s "funny money" means a trip, beginning in Harare, can be a bonanza for travellers using the airline. And anecdotal evidence suggests anyone seems to be able to do this — Zimbabweans, foreigners, even tourists in Zimbabwe can buy a cheap ticket if they have access to someone local to pay the cost for them, and if the journey begins in Zimbabwe.

But the money paid for that ticket, cheap as it may be, has been stuck in Harare, with SAA unable to get its hands on it as a result of the foreign-currency shortage in Zimbabwe.

Neither have other airlines in the same position — RwandAir and Fastjet (which operates out of Johannesburg but recently began providing daily domestic flights between Harare, Bulawayo and Victoria Falls).

The inability to repatriate funds from ticket sales has prompted a number of airlines to move to hard cash. A month ago, Kenyan Airways pulled out of local ticketing.

Last week, as fuel queues grew and there was a rush on the supermarkets for cooking oil, bread, flour and sugar, and SA franchise KFC closed, Emirates and Ethiopian Airways shut up shop for local ticketing payments. (It’s just as well; the FM has heard of an individual who paid a pittance last month for about 10 Emirates tickets for a family reunion in Europe.)

Cautious British Airways, operated by Comair, which flies into Zimbabwe daily, withdrew local ticketing a year ago. It’s probably the only airline that doesn’t have money stuck in the system.

For SAA, the cash caught in the remittance grid amounts to a small fortune. Though the airline will not confirm the amount, nor how long the cash has been there, airline experts in Zimbabwe say it is probably about $100m.

How did this come about?

Zimbabwe abandoned its local currency in 2008, after years of hyperinflation rendered it worthless, switching to a multicurrency economy that favoured the US dollar for cash. Zimbabweans started to fear for the future as the end neared for the Zanu-PF and Movement for Democratic Change unity government of 2009-2013.

When a new (equally shambolic) Zanu-PF government emerged in 2013, some who could afford it took their cash out of the country (carrying suitcases of dollars, it’s said, with very few searched leaving Zimbabwe) or stuck it under the mattress. As a result, it became ever harder to find greenbacks, and by mid-2016 ATMs were regularly without cash and withdrawals were limited. Even international banks such as Stanbic and Standard Chartered dramatically reduced withdrawal limits.

Later that year, the central bank, under John Mangudya, introduced low-denomination bond notes, a locally designed currency available in $2 and $5 denominations and pegged to the US dollar value.

Cautious BA Comair, which flies into Zimbabwe daily, withdrew local ticketing a year ago

So other forms of payment emerged — forms of payment that now account for more than 90% of all transactions.

To shop in supermarkets and the like, Zimbabweans load money onto a registered mobile number through EcoCash, with a 5c premium logged on these transactions; more Zimbabweans have started using debit cards, known as "swipe"; and most commercial transactions now take the form of real-time gross settlement (RTGS), or bank-to-bank transactions.

For its ticketing, SAA accepts "swipe", bond notes and RTGS. The ticket must be booked to fly out of Zimbabwe (though one need not return), and travel must take place within 60 days of purchase. Any travel agent will make such a booking, or bookings can be made on the FlySAA website, on which customers can choose the "pay later" option, then visit the SAA office within 72 hours to pay by swipe or bond notes, or settle the bill by internet bank transfer. However, bond notes and dollar bank balances have lost value against real US dollars. Almost anyone can tell you at almost any time of day what the going rate is for Zimbabwe’s money. On Monday, the rate was three "swipe", EcoCash or bond note dollars for every $1 cash note.

So booking with SAA for a Harare-Johannesburg-London-Johannesburg ticket and paying in local currency amounts to about R7,000, all in.

But even that money has so far not been repatriated to SA by the cash-strapped airline, which already relies on R19.1bn in state guarantees just to keep flying in SA. The airline is able to pay its local running costs, such as fees to the Civil Aviation Authority and salaries for its 20-odd staff, out of its Zimbabwe bank account. But the rest of the cash from tickets issued in Zimbabwe and paid for locally has been trapped by the Reserve Bank.

SAA in Harare did not return the FM’s call, nor reply to an e-mail asking if and when it will curtail payment of air tickets by electronic money. It did, however, tell the Sunday Times a week ago it has no plans to do so. SAA would also not say how much cash it has tied up in the system or in the International Air Transport Association clearing house, where travel agents lodge payments.

WHAT IT MEANS

Customers can pick up air tickets from SAA for a song in Zimbabwe, though the cash-strapped airline has been unable to repatriate the funds to SA

However, subsequent to the FM going to print with this story, the Zimbabwe ministry of finance & economic development announced it would begin paying $4m a month to foreign airlines. On the back of this, SAA country manager Winnie Muchanyuka told local media: “We negotiated and came to an agreement on a payment plan. Airlines welcome the move as this will allay any fears from us as airline operators.”

Insiders, however, remain sceptical about Zimbabwe’s ability to pay off the $150m owed – the bulk due to SAA – in real foreign cash.

Meanwhile, President Emmerson Mnangagwa wrote in his column in the state-controlled Sunday Mail last weekend: “We have suffered massive market failures, manifesting in complete collapse of the pricing framework for virtually all commodities, regardless of import component. There has been a run on the bond note.

"Those hit hardest are the sick, the unemployed, the poor and the vulnerable, including our hard-pressed workforce. Reports and submissions before me on illicit currency dealings point to an intricate network of currency speculators mostly in high places and in places of trust.

"In a number of cases which have now been brought to government’s attention, some of our guardians of the financial services sector have either not discharged their roles fully, or have not done so honestly."

Mnangagwa says he will use his powers to institute a new law, valid for six months, to make currency dealings illegal. At present, the smaller deals are usually done openly outside top hotels, and at the main bus terminal in central Harare. Others are more clandestine. But there’s no doubt money is changing hands everywhere. People importing spares, hardware, services and the like are all in need of US dollars; they cannot get forex from the central bank or if they can, the delay in doing so would be too long. 

Mnangagwa wrote: "It has come to light that the money changers we see on street corners are mere ‘runners’ who work for big currency sharks who operate from high places in air-conditioned offices … these runners are on pittance commission from large sharks who are the real offenders we should bring to book. And we will do just that."

For the moment, it’s looking like a repeat of the years leading up to the collapse of the Zimbabwe dollar in 2008.

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