Bukola Ogunyemi: Liberalization Of Air Transport Market Takes Africa Closer To Desired Economic Integration
Traveling by air from one African country to another, as those familiar with the routes and processes would testify, is often strenuous, expensive and time-wasting due to poor air connections borne out of ill-advised protectionist policies.
As Umaru Fofana, a BBC journalist, detailed in his experience in 2017 flying between the West African capitals of Freetown (Sierra Leone) and Banjul (The Gambia), a journey of 700km (400 miles) which should take about an hour could take 24 hours or 72 hours due to the non-availability of direct flights. Travelers from Freetown sometimes fly via Abidjan (Cote D’Ivoire) then Dakar (Senegal) before arriving in Banjul. A quicker but far more expensive option would be to fly to Brussels (Belgium) and then connect to Banjul.
This obviously complicated and problematic arrangement has left African countries incapacitated from exploring the full economic potentials of the budding aviation market on the continent. As a result, non-African airlines currently control about 80 percent of the air transport traffic to and from Africa, fly about 80% of intercontinental traffic to and from Africa.
The decision therefore of the African Union to launch the Single African Air Transport Market last week during the 30th AU Summit in Addis Ababa is a timely development. The Single African Air Transport Market is a flagship project of the African Union Agenda 2063, an initiative of the African Union to create a single unified air transport market in Africa, the liberalization of civil aviation in Africa and as an impetus to the continent’s economic integration agenda. SAATM will also enhance the realization of the African Passport and free movement of people and goods, as well as the creation of the continental free trade Area (CFTA).
Implementing the SAATM, which is similar to the EU’s single aviation market, would go a long way towards making African air travel more competitive by reducing protectionist policies. Liberalization of air transport within Africa to facilitate better connections within the continent would result in substantial benefits for passengers, airlines, and the economies of the respective African countries.
The 23 countries currently signed to the single air market are: Benin, Botswana, Burkina Faso, Cabo Verde, Congo, Cote d’Ivoire, Egypt, Ethiopia, Gabon, Ghana, Guinea, Kenya, Liberia, Mali, Mozambique, Niger, Nigeria, Rwanda, Sierra Leone, South Africa, Swaziland, Togo and Zimbabwe. The twenty-three countries have a combined population of roughly 670 million, more than half the population of the continent. In addition, these 23 countries have a combined GDP of $1500 billion and their average per capita income of $2,119.5 is higher than the continent’s average of $1888. These countries also account for more than 80 percent of intra-African traffic and also accounted for over 54 percent of the 63.5 million international tourists recorded by Africa in 2015.
The aviation sector in Africa currently supports over $72 billion in GDP, creating 6.8 million jobs. Clearly, there is a lot of potential for growth there. According to the International Air Transport Association, addressing market barriers in air transport between just 12 African countries could lead to 4.9 million additional passengers journeys, unlocking $1.3 billion additional economic activity and 155,000 new jobs. The demand potential for intra-African air travel remains large and the economic benefits of policy reforms on the issue of intra-Africa connectivity could be significant. Demand for air travel to, from and within Africa is forecast to more than treble over the next 20 years – growing from 75 million passengers in 2016 to more than 240 million passengers per annum by 2035.
Under a single market, airlines from the region would be allowed to connect any two African cities, without having to go through their home hub first. South African Airways could, for example, fly Johannesburg-Nairobi-Cairo on the same trip and Ethiopian Airlines could go to Nairobi and Johannesburg in a single trip.
South Africa, Egypt, Nigeria, and Kenya are expected to be the biggest markets for air travel within Africa while Ethiopia will maintain its position as the key driver for air travel between Africa and the rest of the world. Currently, intra-Africa traffic accounts for at least half of the total air transport market in most African countries, with Cape Verde and Egypt being the only exceptions to this trend.
Full adherence to and implementation of the terms and agreements under the single air market policy by the various African governments is crucial but the liberalization and unification of the African air transport markets is expected to bring unprecedented financial growth for indigenous airlines in Africa, most of which currently record huge operational losses annually. This will also open the sector up for much needed foreign investment.
Bukola Ogunyemi is a policy analyst and media executive based in Lagos.