The Civil Aviation Authority of Zimbabwe (Caaz) board is under fire from Transport minister Joram Gumbo over its failure to provide up-to-date financials after submitting 2015 accounts at its annual general meeting on Monday.
Sources say Gumbo, who only attended part of the meeting to make his official remarks to the board before he left for other commitments, was irked by the old accounts, which he said are in serious violation of good corporate governance principles and demanded that the board present audited 2016 accounts by end of March 2017.
Government in 2014 adopted a National Code on Corporate Governance, whose aim is to encourage leadership to adopt high standards of corporate governance through well-defined national and ethical value systems, but it is yet to be implemented fully.
The Office of the President and Cabinet is also working on a new code of ethics and a Public Sector Corporate Governance Bill to deal with public sector mismanagement and corruption.
“Improvement in corporate governance is one of the areas under Caaz’s 2016 business strategy,” a source close to the Caaz board said.
Gumbo argued there was no justification for such delays given all resources and tools necessary for the board and management to carry out their mandate were in place.
The Caaz board came into effect in June 2016 and is steering government’s initiative to restructure the authority by separating the regulatory responsibilities from the airport management function.
Gumbo’s demand dovetails into Caaz’s 2016 strategy which has a number of deliverables including improving compliance with corporate governance by 5% to 70% by December 2016.
The strategy also sought to increase passenger handling to 6,5 million per year and mobilise US$63 million for projects by December 2016.
This comes as most parastatals have become feeding troughs for corrupt government officials and businesspersons close to the corridors of power through the awarding of shady tenders and other forms of revenue leakage that have cost the country billions of dollars.
In a statement at the general meeting on Monday, Caaz chair Thembinkosi Magwaliba said the authority had not been spared the economic challenges that also took a toll on tourism.
Magwaliba said current liabilities amounted to US$208,2 million against current assets of only US$33,8 million.
Revenues for the year increased by 9% on prior year to US$33,5 million while operational expenditure declined 13% in line with cost-cutting measures that also saw the net deficit fall by 25% on prior year. Employment costs and insurance expenses went down 15% and 11% respectively.
The ratio of employment costs is however high at 44,5%.
Going forward, Magwaliba said, Caaz will focus on revenue growth including a review of airport commercial activities in order to maximum the potential of non-aeronautical business and employ cost management initiatives to achieve profitability by 2018.
The company is also seeking to restructure long-term debt to strengthen its financial position.
Caaz MD David Chawota said the authority handled 1,5 million passengers in 2015 which is 24,55% of the installed capacity of six million passengers. The passenger movements increased by 11% compared to 2014, but remain low at 74,9% of the 1,9 million passengers handled in 1999.