• CAAZ’s 2025 deficit almost doubled to ZWG188.8 million from ZWG94 million a year earlier
• US$51.68 million of overdue legacy loans remained unserviced for a second consecutive audited year
• Zimbabwe’s airports are carrying more passengers, leaving debt resolution and regulatory funding as the harder institutional test

Harare- Zimbabwe’s aviation market is expanding around a regulator whose balance sheet remains under considerable financial strain according to the Auditor General’s report.

The Civil Aviation Authority of Zimbabwe carried US$51.68 million in overdue legacy loans at the end of 2025, the same US dollar amount reported a year earlier, while its annual deficit almost doubled to ZWG188.76 million from ZWG94 million.

Current liabilities exceeded current assets by ZWG1.15 billion, only marginally better than the ZWG1.18 billion gap recorded in 2024. The Auditor-General again raised material uncertainty over CAAZ’s ability to continue as a going concern.

The deterioration comes during a stronger period for Zimbabwean aviation. Passenger movements through the country’s airports increased approximately 10% to 2.53 million in 2025 from 2.29 million a year earlier. Traffic continued growing in the first half of 2026, reaching about 1.19 million passengers from 1.11 million in the comparable period, an increase of 7.1%.

That recovery should be interpreted carefully. CAAZ no longer operates Zimbabwe’s airports. Airport operations were separated from the Authority under the 2018 Civil Aviation Amendment Act and transferred to the Airports Company of Zimbabwe. CAAZ retained responsibility for aviation regulation, safety and security oversight, development of air transport and the provision of air-navigation services.

Higher passenger numbers therefore cannot simply be translated into higher CAAZ airport revenues. They do, however, establish a growing aviation system around the Authority. More flights, routes and operators increase the economic importance of the regulatory, navigation and safety infrastructure CAAZ is required to maintain. That makes the persistence of the Authority’s legacy debt and liquidity weakness more consequential.

The 2025 audit shows little movement on the principal balance-sheet problem.  CAAZ had overdue legacy loans of ZWG1.31 billion, equivalent to US$51.68 million, in 2024. At December 2025, the balance had increased in local-currency terms to ZWG1.34 billion while remaining US$51.68 million.

Loan servicing remained an unresolved prior-year finding because the Authority was still not servicing the foreign legacy loans. This changes the nature of the problem. The debt is no longer a temporary liquidity event that can be expected to disappear through a single stronger operating year. It has become a structural balance-sheet liability requiring either sustainable servicing from CAAZ’s own cash generation, restructuring on terms the Authority can carry, shareholder intervention or some combination of those options.

The deterioration in the annual deficit reinforces that conclusion. CAAZ’s deficit increased by approximately 101% between 2024 and 2025 despite the slight improvement in the current-liability gap. That means the Authority entered the aviation recovery with the legacy burden unresolved while its annual financial performance weakened.

The 2025 audit opinion also deteriorated. CAAZ received an unmodified opinion for 2024 but a qualified opinion for 2025 because its land and buildings had last been revalued in 2019. The Auditor-General found that significant changes in the economic environment required a new valuation and concluded that the carrying value of those assets could have been materially different had CAAZ complied with the applicable public-sector accounting standard.

Management intends to conduct the revaluation during the final quarter of 2026. That exercise is more than an accounting clean-up. When an institution already has a ZWG1.15 billion working-capital deficit and US$51.68 million of overdue debt, uncertainty over the current value of its property base weakens the quality of the balance sheet being used to assess solvency, financing capacity and any future restructuring.

The audit also exposes smaller control weaknesses inside that financial strain. CAAZ collected US$375,521 on behalf of the Meteorological Services Department but remitted US$204,845, equivalent to 55% of the amount collected. The difference was approximately US$170,676. The Auditor-General attributed the shortfall to inadequate reconciliation and monitoring controls over the remittances.

Separately, board fuel allowances were still being administered using a Ministry letter issued in 2012 rather than the more recent Corporate Governance Unit circulars governing board benefits. The Auditor-General warned that this created exposure to unauthorised payments.

Neither issue approaches the scale of the legacy debt. Together, however, they matter because CAAZ is trying to repair a constrained balance sheet while maintaining the controls expected of the institution responsible for regulating an increasingly active aviation industry.

The distinction between the aviation recovery and CAAZ’s financial recovery is therefore important. Zimbabwe has already produced stronger passenger demand. International movements reached about 2.17 million in 2025, while domestic passenger traffic grew 15% to 357,133.

The market is providing more activity. CAAZ must now demonstrate that its institutional model can finance the regulatory, air-navigation and safety functions required by that activity without allowing historical debt to remain permanently embedded in the balance sheet.

A poorly structured response would simply move the legacy burden onto current aviation users through higher charges. That could raise airline operating costs precisely when Zimbabwe is attempting to deepen connectivity, attract additional carriers and expand domestic traffic.

A credible resolution therefore needs to separate legacy obligations from the economics of current aviation services. The tests for 2026 are measurable.

CAAZ has committed to revalue its assets before year-end. The US$51.68 million legacy loan requires a visible servicing or restructuring framework. The annual deficit needs to narrow materially. The current-liability gap needs to move beyond the marginal improvement recorded in 2025. Revenue collected on behalf of other institutions needs to be fully reconciled and remitted.

Zimbabwe’s aviation recovery has already supplied the regulator with a stronger industry backdrop.

Equity Axis News