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Infrastructure, open skies will help unlock intra-Africa trade

Kenya’s President William Ruto flagged off a consignment of tea export destined for Ghana. It was Kenya’s second export under the Africa Continental Free Trade Area (AfCFTA) Guided Trade Initiative, which provides a platform for match-making of importers and exporters to accelerate the deepening of intra-African trade. The first export was on September 13, 2022, comprising $77,000 worth of exide batteries to Ghana’s Yesudem Company Ltd.

These momentous steps notwithstanding, it was saddening to learn that the consignment of tea exports would take six weeks to arrive in Ghana. This is a reminder that unless Africa gets it right in infrastructural integration, it risks back-pedalling on the considerable gains realised in deepening integration.

Six weeks in transit presents worrisome unknowns, especially around the high freight costs and transit time. Irrespective of the sweeteners offered in tariff reduction based on preferential access, connectivity between source and destination market threatens to erode the allure of the trading bloc.

Regional integration journey

With 17 landlocked countries, a sizeable number of players in the AfCFTA are starting the regional integration journey with the backfoot of geographical disadvantages. It is against this backdrop that one ponders the benefit of the Single African Air Transport Market (SAATM) and and opening of the African skies in intra-Africa trade.

The journey to liberalised air transport in Africa has been long-drawn and hard-fought. From the Declaration of Mbabane in 1984, which broadly called for more co-operation among African carriers, through the Yamoussoukro Decision of 1999, which cast more light on liberalisation of intra-African air travel, and now to SAATM, which was launched in January 2018.

The length of this journey is deemed as a failure on Africa’s part. I think differently: aviation is a sector laden with rules and regulations owing to the demands of safety and sustainability.  Unwinding such needs abundance of caution. Further, the existence of national flag carriers has often inclined member states to wear a protectionist hat.

Aviation industry

That said, whereas this long journey has presented a worthwhile learning curve on an undeniably complex industry, the post-Covid operating environment necessitates a greater sense of urgency in Africa’s ability to harness the opportunities presented by a more integrated and liberalised aviation industry.

Covid-19 brought to visibility the critical role cargo plays in the sustainability of aviation in tiding through shocks that depress passenger numbers.  Therein lies the opportunity to think through how to pair up logistical hurdles in connecting source and destination markets for exports and imports with the need to de-concentrate airline revenues from the passenger business.

The amendment or annulment of the intricate web of bilateral air service agreements ought to be considered to reflect changes needed from a frequency, capacity and aircraft type standpoint. The road ahead ought to be informed by candid conversations on airline entry, flight capacity, pricing considerations as well as frequency. 

Going hand in hand with this ought to be a relook into the taxes and levies slapped on air travel within Africa which makes it expensive.

Source: The East African