24 November 2017

Africa: AfDB Moves to Support Aviation Sector

The African Development Bank (AfDB) is primed to launch a new framework to support the revitalisation of the continent's aviation sector.

In a statement, Dr Akinwumi Adesina, the AfDB president, said the bank and its partners would also unveil initiatives to help to de-risk financing for aircraft acquisition and upgrading of airports.

They also look to support expansion of regional navigational and air safety and deregulation of the aviation industry to boost competitiveness and efficiency.

"We must make regional aviation markets competitive and drive down costs, raise efficiencies and improve connectivity and convenience," Adesina is quoted in the statement as saying.

He was speaking during the third International Civil Aviation Organisation (ICAO) world summit earlier this week in Abuja, Nigeria.

Adesina urged African governments to expedite liberalisation of the continent's airspace, saying the move would help accelerate economic development. He added that rigid bilateral air service agreements have made it difficult to liberalise regional aviation markets.

He said open skies would help integrate Africa and build stronger and more resilient economies, and urged African governments to expedite implementation of the 1999 Yamoussoukro agreement on seamless air travel.

While 23 countries have signed the agreement, the 27-year old accord still faces implementation challenges, added Adesina.

Chance Ndagano, the RwandAir chief executive and the president of the African Airlines Association, said at the recent association's summit in Kigali that full implementation of the treaty could help make airlines more profitable and competitive.

This would also promote trade, investments and tourism across the continent, he added. AfDB has invested $20 billion in infrastructure over the past 10 years, with over $1 billion going into the aviation sector.

Barry Kashambo, the ICAO regional director, called for more funding to support the implementation of international civil aviation global standards and policies, as well as global plans for aviation, especially ICAO's 'No Country Left Behind' initiative.

Kashambo said African airlines will play a vital role in championing Africa's agenda 2063.

"This will be possible when market players and policy-makers embrace smart regulations to help enhance competitiveness and efficiency. Regrettably Africa's aviation growth is held back by restrictive regulatory environments, which limit market size, profitability, and drive up costs," he added.

Fees hurting sector

Airliners have been complaining of aircraft departure fees in Africa, which are 30 per cent above the global average, while taxes, fees and charges remain 8 per cent higher.

"Given the low per capita incomes in Africa, high fares essentially tax the poor out of air travel. We may have an open sky policy, but end up with empty skies," Kashambo said.

Today, Africa's aviation industry adds $73 billion to the continent's annual GDP and employs about seven million people, an average of 130,000 people per country in Africa, according to the bank president.

The industry is projected to grow by 5 per cent annually for the next 20 years. From serving 120 million passengers in 2015, the industry will triple and serve over 300 million passengers by 2035.


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