Zimbabwe's cash-strapped government plans to set up a cargo airline next year to boost horticultural exports and foreign currency earnings, Finance Minister Herbert Murerwa said on Wednesday.

Murerwa told reporters the country, which is battling its worst economic crisis since independence in 1980, was also considering buying new passenger planes.

After the collapse of state-run cargo carrier Affretair five years ago, Zimbabwe has been relying on small foreign and local, privately owned cargo planes to export products to neighboring countries including South Africa, where they are offloaded on to bigger planes for longer distances.

"The small and few operators in the cargo business are lacking capacity, with most of the agriculture products meant for international markets not being transported on time, hence loss of foreign currency earnings," Murerwa said.

Zimbabwe exports horticulture products mostly to western Europe and has managed to maintain a steady flow despite a slump in agriculture following government seizures of white-owned farms for the resettlement of landless blacks since 2000.

The government is considering buying new planes to rebuild Air Zimbabwe's fleet, which has been depleted by shortages of foreign currency for spare parts and mismanagement, Murerwa said. He gave no figures. Air Zimbabwe has four planes.

Zimbabwe has already ordered three passenger planes from China's National Aero Technology Import and Export Corporation.

Murerwa also said the government planned to introduce a strategic equity partner into Air Zimbabwe but declined to say whether the Chinese were likely to invest in the airline. However, he said the three planes were an investment by China.

Air Zimbabwe's market share has fallen to 24 percent from 50 percent five years ago as the country's political crisis keeps tourists away. The number of passengers and airlines into the county has declined by 58 percent and 55 percent respectively since 1999.

"Details of the strategic partner are yet to be worked, but what I can say is that the Chinese are forthcoming with investment," Murerwa said.

(Reuters)