Zimparks walks a financial tightrope

By Tatira Zwinoira for Alpha Media Weekly Digest

The impact of the global COVID-19 outbreak and slower-than-expected recovery from the pandemic have forced the Zimbabwe Parks and Wildlife Management Authority (ZimParks) into a huge cost-cutting exercise just to balance its books this year.

Zimparks is navigating through some of its toughest times in decades. The agency, which is tasked with a difficult job of overseeing the southern African country’s rich wildlife endowment, says it is walking through a financial tightrope this year.

In its 2022 budget, the authority had projected incomes to come in at US$22.8 million, giving it impetus to carry out its crucial interventions across wildlife estates. The authority based its projections on faster tourism industry recovery as pandemic fears fizzle out.

However, the scenario is completely the opposite. Along the way, subdued tourism receipts have continued, even as the authority says the outlook is positive going by the trend so far. The tourism sector generates the bulk of ZimParks’ income, while it earns donations from non-governmental organisations that came in at US$1.75 million in 2021 and is expected at US$1.33 million this year.

According to Precious Mhaka, Chief Finance Officer at the agency, management has reviewed forecasted income down to US$16 million after taking into account actual developments on the ground. This is about US$6.76 million below budget and the slower than expected revenues are likely to hold back the execution of crucial developments.

Zimparks management has acted after the slower than expected tourism recovery, rolling out a painful cost cutting regime to tame runaway expenses.

Downward reviews of nearly 18% compared to last year, are seen helping the authority make a surplus, and steering the ship above waters as tourism gains traction, albeit at a much slower pace than initially projected.

In terms of expenditure, Mhaka says ZimParks is expecting expenses of US$14,385,303, which will translate to about US$2 million surplus.

If all ends up as planned, the projected surplus would represent a significant positive trajectory for an authority that reported a deficit in 2021, when income of US$14.1 million, was almost US$3 million lower than US$16.91 million in expenses.

In 2020, Zimparks experienced revenues of US$10.42 million against expenses of US$13.71 million for another deficit of US$3.28 million.

The last time the company had a surplus was pre COVID-19, in 2019, the company recorded revenues of US$12.01 million against expenses of about US$8 million giving a surplus of just over US$4 million.

The global spread of COVID-19 from 2020 has significantly affected ZimParks ability to continue as the authority only relies on tourism revenue.

“Our revenues are not only affected by COVID-19, but by the price fluctuation that was taking place,” Mhaka said during a tour of the authority’s ivory stockpiles by Harare based diplomats.

The country holds 130 tonnes of ivory in its vaults. When the pandemic spread across the globe in 2020, terrified governments responded by applying swift curbs to global travel, ordering millions of travel loving people to stay indoors as efforts to prevent contagion went into full gear. The results of the drastic actions were catastrophic. Over US$3 trillion was wiped out of international tourism markets, driving many operators into bankruptcy, or near bankruptcy.

The Zimbabwe Tourism Authority (ZTA) said arrivals plummeted by a staggering 90% in the first year of the calamity alone, responding to the grounding of global airlines and tight intercity curbs rolled out by Harare, whose pandemic management strategies have been ranked among the region’s best.

Last year was no different as it saw new variants of COVID-19 emerge, leading to more travel restrictions not only locally but internationally as well. Before the global spread of COVID-19, in 2019, Zimbabwe’s tourism receipts were US$1.24 billion and after the pandemic spread globally the following year the southern African nation earned US$359 million.

Last year, tourism receipts only rebounded to US$397 million a year, an 11% uptick from 2020 as recovery from the pandemic continues, according to the ZTA.

“For 2022, as we speak right now, we have actually collected about an equivalent of US$3 million from January to April, and we are riding on a loss, a deficit, of about US$826,000.

Meaning to say, we are actually in a dire situation as the authority. If there are issues of funding, this is actually one other area that is important that we are supposed to look at,” Mhaka said.

“On average, the authority requires about US$1.5 million (per month) to function very well in terms of revenue, but as we speak right now, we are managing to generate US$800,000 so there is that deficit of about US$700,000 which is accumulating every month”.

In a normal year, the 2022 expenses would be the budget. But, due to the authority having debtors, higher staff costs and experiencing exchange losses its expenditure doesn’t cover all their obligations. Thus, the authority has had to prioritise essential expenses, hence, the higher budgeted figure compared to the expenses expected for the year.

Mhaka said in terms of expenses, the authority needs money for anti-poaching and law enforcement, park management expenses, scientific research and international relations, training, development, tourism, commercial activities, general administration costs, and staff costs.

“The staff costs actually do take much of our expenditures in the organisation,” he said. ZimParks requires an average of US$178,000, monthly, to pay its workers that are slightly above 2,000 and around 700 to 900 contract workers with the authority needing an additional 1,000 staffers.

Financial shortfalls are why ZimParks has aggressively been pushing for the sale of its ivory stockpile and its six to seven tonnes of rhino horn to realise millions of dollars in revenue.

Ivory sales were banned in 1989. The last time CITES was successfully pressured by African and Asian countries into allowing the sale of ivory was in 1999 and 2008. This is why in a recent declaration endorsed by the Zimbabwe government and those of Botswana, Namibia, Tanzania, and Zambia, challenged CITES as all of these countries have significant elephant populations beyond their individual capacity.

In Zimbabwe, elephants were part of the wild animals that killed 68 people last year, up from 60 in 2020. The authority also reported that for 2022, up to April, at least 32 people had been killed.

However, CITES is unlikely to give in as it is now putting pressure and successfully put pressure on top ivory source markets of Vietnam and China to ban ivory sales. Meanwhile, Japan, another top ivory market, is on record stating that it no longer has need to buy more ivory.

Namibia is reportedly now selling elephants to countries in the gulf region according to recent reports that typically violates CITES. According to a United Kingdom based wildlife conservation charity, Born Free, in a March 2022 report, Namibia’s elephants are listed on Appendix II of CITES, with a restriction on “live exports to in situ conservation programmes (to places where elephants do or have recently existed in nature”).

“In an attempt to circumvent this restriction, Namibia is claiming that it can, instead, apply the provisions which would apply to Appendix I-listed populations which allow exports for non- commercial purposes.

Bizarrely, zoos are regarded by many as ‘non-commercial’ entities,” reads part of the report.

The governments of Botswana and Zimbabwe have also threatened to do likewise.

This article is reproduced here as part of the African Conservation Journalism Programme, funded in Angola, Botswana, Mozambique, and Zimbabwe by USAID’s VukaNow: Activity. Implemented by the international conservation organization Space for Giants, it aims to expand the reach of conservation and environmental journalism in Africa, and bring more African voices into the international conservation debate.

Read the original story here.