Jet fuel increase hurts tourism

The increase of crude oil on the international market by over US$68 per barrel recently forced Zambia to review the price of its petroleum products.

Zambian Airways is particularly concerned at the constantly increasing costs of local and regional travel, prompted by the high cost of aviation fuel, ostensibly to recoup some of the costs incurred by operators to sustain the industry.

Chief Executive Officer Don Mac Donald said the private airliner was forced to purchase Jet fuel at US$1.06 a litre compared to South Africa and other neighbouring countries where the price was US$0.65 per litre.

The difference in the cost of fuel between Zambia and other countries operating airlines and seeking to promote local tourism and the hospitality industry, made Zambia one of the most expensive destinations in Africa.

“The price of fuel in Zambia is twice more than the price of fuel in South Africa, Namibia, Zimbabwe and other neighbouring countries. We pay more for fuel that we pay in South Africa,” said Mac Donald whose firm recently acquired two 737-air buses to service the region and Dubai.

He attributed the high cost of airfares to Zambians’ inability to embrace flying.

Zambia Airways, the forerunner of Zambian Airways closed in 1995 because of liquidity problems.

It was one of the biggest flag carriers in Africa, having set up several destinations and helped promote the country’s tourism and hospitality industries until 16 years ago when it went under.

There are plans by government to seek an equity partner (with management rights) to revive the defunct airline. The government plans to own 20 per cent of the equity.

Meanwhile, the ministry of tourism has been challenged to set up a one-stop shop facility (Triangle of Hope) to address the high cost of setting up business in the country.

The Zambia National Tourism Board said the lack of such a facility forced several potential investors to re-locate to other parts of the country because of the red tape hampering the setting up of a business.

According to the national tourism body, most investors were frustrated by the delay in acquiring operating licences.

“We are happy that the ministry is working on a programme (Triangle of Hope) intended to reduce the process of acquiring licences, but it must be done quickly to make Zambia a good destination for tourists,” Zambia National Tourism Board chairperson Erroy Hickey said.

He urged the government to introduce incentives to lure local investors into the tourism and hospitality industry noting that 90 per cent in the industry constituted foreigners.

Recently the Hotel and Catering Association of Zambia and the representative of the Tourism Bar Association Zambia, Gaudenzio Rossi, bemoaned the bureaucracy in the acquisition of licences, double taxation and the poor infrastructure.

“We are letting investors slip out of our hands in preference for other countries in the region, because we are not consistent with what we want to do.”

“Today we’ll work out a package for investors to come into Zambia and shortly after, when the business is good, we want to change and that is not helping us.”

He warned against inconsistency, as it was a recipe for illegal guesthouses, tourism and other hospitality businesses that shy away from the bureaucracy.

November 2006
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