Africans make up 12% of the world’s population but only 2.5% of the world’s passengers. Why the gap?

Africa has 731 airports and 419 airlines with an aviation industry that supports around 6.9 million jobs and USD 80 billion in economic activity. According to the International Air Transport Association (IATA), Africa is set to become one of the fastest growing aviation regions in the next 20 years with an annual expansion of nearly 5%. While it is evident that aviation in Africa has the potential to fuel economic growth, several barriers exist. Weak infrastructure, high ticket prices, poor connectivity and lack of liberalisation rank amongst the many challenges.

Consider the reality: Airport infrastructure in most African countries is outdated and not built to serve the growing volume of passengers or cargo. Airlines and airports are often managed by government entities or regulatory bodies. Foreign investment is discouraged. In Malawi, for example, it’s illegal for a foreign airline or private investor to own more than 49% of a national airline. So, this prevented Ethiopian Airlines from purchasing more than a 49% stake in Malawian Airlines.

Yet, modernising infrastructure and operations requires both investment and expertise, ideally from public-private partnerships. Africa needs to open its doors for private capital investment. Countries such as Côte d’Ivoire and Rwanda are heeding this call and making strategic bets in the sector while employing best practices to drive vibrant aviation growth. Take the outstanding example of the Abidjan International Airport. In 1996, management and operation of the terminal in Côte d’Ivoire were privatised and awarded to AERIA, a French company. Ownership of AERIA is shared by private investors (65%), a technical partner (25%) and Côte d’Ivoire (10%). The company has invested in infrastructure and delivered quality service, impressing the government so much that the concession has been extended.

With private capital involved in the mix as in Côte d’Ivoire, partnerships can build greater efficiency, higher revenue and better quality service that demand financial discipline and eliminate corruption. Still, governments have an important role to play in delivering economic and social benefits by championing intercontinental aviation as well as shaping a dynamic African aviation sector.

Liberalisation will bring strong outcomes – new routes, more frequent flights, better connections and lower fares. These improvements will increase the number of passengers, which will have both direct and indirect positive effects on trade, business travel and tourism. In turn, this has impacts for the broader economy, generating more tourism revenues, jobs and productivity. They will enhance the GDP of African countries and uplift the welfare of ordinary Africans. According to an IATA survey, if just 12 key African countries opened their markets and increased connectivity, an extra 155,000 jobs and USD 1.3 billion in annual GDP would be created in those countries. A study by InterVISTAS Consulting shows that in South Africa, liberalisation could yield an estimated 15,000 new jobs and generate USD 284 million in national revenues.

On the other hand, the lack of liberalisation affects connectivity and ticket costs. In Africa, no direct flight exists to travel from Abidjan, a hub in West Africa, to Dar Es Salam, a hub in East Africa. Instead, a traveler inefficiently flies to a second or third country before reaching the final destination. Across the globe, on average, low-cost carriers are about a quarter of all flights. In Africa, however, they don’t even reach 10%, which obviously makes ticket prices somewhat prohibitive.

So what’s ahead for Africa’s skies?

First, the Single African Air Transport Market introduced earlier this year aims to open up Africa’s skies and improve intra-African air connectivity. So far, 26 African countries have signed up. The movement is promising and will be more effective once all African countries come onboard.

Second, visas need rethinking. Only 14 out of 54 African countries currently offer visas upon arrival to African nationals. Difficulties in obtaining visas for intra-Africa travel affect travel and tourism. But visa openness underpins the continent’s tourism sector and can create many more skilled jobs. The AfDB’s Africa Tourism Monitoring Report  outlines that a visa liberalisation scheme could increase tourism by 5% to 25%. Increased tourism will give rise to new businesses opportunities in transport, hotels, shopping malls and restaurants. For the 60% of African youth who are currently unemployed, this means a new job market, which also prevents local brain drain in the long run.

Indeed, the advantages of increased mobility are many. Not only the Schengen Agreement and the Gulf Cooperation Council, but also African countries that have eased visa restrictions, demonstrate this reality. Rwanda, for one, is a strong supporter of Visa Free Africa. On opening a visa on arrival to all African citizens, the country saw a 24% increase in tourism arrivals and a 50% increase in intra-African trade. Trade with the Democratic Republic of the Congo alone increased by 73% since the implementation of the policy. And when Rwanda abolished work permits for East African citizens, the country’s trade with Kenya and Uganda increased by at least 50%. Seychelles too saw benefits as one of the few completely visa-free countries in Africa. After adopting the policy, Seychelles saw an average 7% increase per year in international tourism into the country between 2009 and 2014.

Ultimately, by 2035, Africa will see an extra 192 million passengers a year for a total market of 303 million passengers traveling to and from African destinations. The top ten fastest-growing markets in percentage terms are in Africa: Sierra Leone, Guinea, Central African Republic, Benin, Mali, Rwanda, Togo, Uganda, Zambia and Madagascar. Each of these markets is expected to grow by more than 8% each year on average over the next 20 years, doubling in size each decade. Thus, while challenges exist, so do the opportunities according to these forecasts. With public-private partnerships for upgrading infrastructure and operations, open skies, and visa liberalisation, aviation in Africa is sure to soar. The question now is: How soon can we make this happen?

This article was originally published by OECD Development Matters. Read the full article here.

Africa is a single continent, comprising of 54 separate countries. Trade with the rest of the world can often be difficult and complex. Thirteen of the countries are landlocked, making air travel the best mode of transportation – especially considering the poor land infrastructure and terrain.

High population with low international movement

Africa is going through an economic boom and tourism in Africa grew by nine percent in 2017, the highest increase of any region. However it is interesting to note that even though Africans total 12 percent of the world population, they make up only three percent of the world’s travellers.

There are many factors influencing this gap. The lack of domestic flights causes significant issues, with stopovers causing double or triple the journey times on many routes. For example, when traveling from Abidjan to Kampala, both notable economic powerhouses, you have to fly via Istanbul and reconnect because there are no direct flights.

High-ticket prices also cause complications for Africa’s aviation industry. It’s expensive traveling to and from Africa, but it’s also expensive to travel within Africa, a factor driven by lesser competition and local airlines.

Non-African carriers currently cover eighty percent of the African market. While there is a steady increase in the number of African carriers like Ethiopian Airlines, South African, Kenyan Airways, Air Cote d’Ivoire, Royal Air Marco and Egypt Air, they still cannot fully compete with the likes of European or Middle Eastern carriers.

Disparity in quality

Intra-region visa restrictions are another major impediment to travel and economic prosperity in Africa. According to the Africa Visa Openness Index, on an average, Africans need visas to enter 55 per cent of states within the continent.

The African Union (AU) has attempted to address this issue of free movement within the region for the last 30 years by introducing a common African passport in 2016, with a goal to distribute them to all citizens by 2020.

While the number of countries becoming more liberal has increased, a visa-free Africa still seems like a dream for the continent’s entrepreneurs, doctors, aid workers, college professors and reuniting families.

Nonetheless, figures show that aviation in Africa has evolved significantly. Thirty or forty years ago, most of the traffic from the continent to other areas of the planet was to Europe or the United States. Now, there’s a lot of traffic between Africa, the Middle East and Asia, as well as between Africa and the rest of the world. For airports in Africa, this has meant that hubs serving all these destinations have grown and improved considerably due to increases in footfall and therefore income.

The future of Africa’s aviation industry

Relationships between African cities and countries, and their Asian and Middle Eastern counterparts have strengthened and deepened. As intra-African trade has increased and visa restrictions have decreased, travel within the continent will also continue to grow significantly.

Aviation impacts all our lives, on both a macro and micro level. A lot of products that are integral parts of our lives come to us through air travel, including food, electronics and medicines.

The ability to travel freely has dramatically changed our understanding of life as it enables a high level of mobility. By making air travel easier and accessible, we are encouraging more and more people to travel and increase interpersonal interactions across multiple borders.

By bridging geographic gaps, removing complexity and bringing people closer, aviation will boost the creation of shared value in our fractured world.