Aiming for far Away Skies

Recently, the CEO of Ethiopian Airlines remarked that indigenous airlines in Africa could do more to facilitate the movement of goods and people under the AfCFTA agreement. The African Continental Free Trade Area pack remains significantly challenged by infrastructure unavailability with the loss-making and limited-in-capacity aviation industry leading. A married of challenges ails the industry from mismanagement of state airlines, a limited private sector, high taxes and lack of an air travel culture due to cost implications on consumers. A quick search on the internet often shows that the fastest and only available way to connect between two African Countries involves traversing through Europe or the Gulf. How, then, can Africa, despite the promise of the AfCFTA, trade with each other if visiting each other with ease is unheard of. Can the pan-African trade pack succeed if connecting African countries through the most reliable, efficient, and fast method, is this challenging? There is a need to realize that air transport is the most suitable mode of transport in Africa for business, trade, tourism, and leisure and pursue increased connectivity.

Akin to the Africa Continental Free Trade Area (AfCFTA) is the Single African Air Transport Market (SAATM) flagship project by the African Union that seeks to revamp air transport in the continent. The two AU 2063 agenda initiatives could complement each other towards actualizing the trade aspirations of the AfCFTA. The SAATM project aims to create a single unified air transport market in the continent and enhance the liberalization of civil aviation for increased economic integration. The implied increased market access and traffic rights for airlines will strengthen connectivity and air transport efficiencies hastening the success of the AfCFTA. The project is important in removing restrictions on ownership with full liberalization of frequencies, traffic and capacity, eligibility, safety and security standards for fair competition and dispute settlement. With the ease of goods and people movement being critical to the realization of the AfCFTA promise, implementation of the SAATM is a prerequisite to the trade agreement.

Expediting the AfCFTA Implementation

The Single African Air Transport Market (SAATM) is an impetus to achieving the AfCFTA dream. Created to expedite the full implementation of the trade deal, it plays a critical role in connecting Africa by promoting its social, political, and economic integration while boosting intra-trade. Underlined in the framework is the aspiration for air transport activities in Africa to achieve smooth, safe, secure, and efficient intra-Africa travel necessary for the movement of labour and service providers across the continent. The project seeks to have air transport activities in the continent conducted in the consumer’s interest, factoring in costs, delays, and administration bottlenecks that make travel painful. This creates a framework for more effortless movement around the continent, enhancing targeted economic and social integration. Moreover, with the framework looking to help members establish airlines and other transport service providers in regions, this could solve a long-time loss-making sector in the continent. Implementing the SAATM is thus necessary, combined with other 13 Africa Union Agenda 2063 flagship projects to achieve the AfCFTA aspirations.

The IATA suggests that fully liberalized air travel markets in at least 12 countries in Africa could create additional 155,000 jobs and US$1.3 billion in annual GDP. Economic development, open markets, and created employment to lift millions of Africans out of poverty are among AfCFTA aspirations. While only 34 countries have signed up for the SAATM, there is a need for more AU and AfCFTA members to participate in liberalizing the African air market. Air transport liberalization opens new markets to many businesses due to new destinations, better flight connections, and higher frequencies offered.

Centred on the consumer, the promise of the SAATM in aiding the AfCFTA is underlined in the expected reduction in travel fares when travelling between signed-up countries. More labour mobility for economic, political, and social integration is thus expected, with increased savings for further investment. The project will therefore generate increased connectivity among AfCFTA members generating increased direct services between countries and reduced time costs currently experienced in complicated travel. Moreover, more routes and greater frequencies promise to shorten flying time with the faster movement of goods and people, increasing overall economic gains and savings. Overall, this delivers increased convenience and choice for consumers, true to the aspirations of the AfCFTA in opening up the African market and competitiveness globally.

Expected benefits to the broader economy include increased employment as airlines seek to fully handle passengers and their baggage, operating, servicing, and maintaining aircraft with air travel available to at least additional 5 million people. The actualization of the SAATM is expected to stimulate movement and tourism within and out of Africa, generating increased spending and foreign income for countries. Increased air travel will lead to better intra-trade by enhancing increased trade, attracting and activating new market businesses, enhancing productivity, and encouraging investment. The underlined employment and economic output fall within the AfCFTA project’s promise.

“How, then, can Africa, despite the promise of the AfCFTA, trade with each other if visiting each other with ease is unheard of?”

The actualization of the SAATM provides an opportunity for airline flag carriers in the continent to explore new route opportunities and growing regional operations. The competitive pressure realized as new players grace the market is a plus for customers due to reduced costs. Moreover, existing carriers will experience increased traffic volumes and access new markets and broader pools of investment through consolidation despite a loss in market shares. The aviation industry improvement can potentially create incentives for economic growth and development in Africa under the AfCFTA and SAATM initiatives. However, advocacy and continuous communication in implementing the two frameworks remain critical towards operationalization.

Muoki Musila is an Kenyan based economist. These are the writer’s own opinions and do not necessarily reflect the viewpoints of Liberty Sparks. Do you want to publish in this space? Contact our editors at [email protected] for further clarification.