86 | http://www.nomadafricamag.com | ...Celebrating the world’s richest continent | Issue 11
Blocked Funds
Increasing Problem for
Airlines In Africa
he International Air Trans-
port Association (IATA) fore-
casts a trebling in the size of
Angola’s air transport market
to 7.1 million passengers a
year by 2036 at the present
forecast annual growth rate
of 6.7%.
However, even faster growth with greater
socio-economic benefits for Angola could
be achieved, if the country opens up its
market and prioritises its participation in
the continent-wide connectivity efforts,
unblocks funds, consults with industry to
improve infrastructure and maintains
world-class safety standards, in the view of
IATA.
The second priority is improving connec-
tivity. Enhanced connectivity will stimulate
demand and competition, making air travel
more affordable and in doing so, enable
higher volumes of trade, tourism and com -
merce between Angola, its sister nations
and the rest of the world.
Modern infrastructure is also amongst the
critical aspects for aviation to deliver its
economic and social benefits. Luanda’s new
international airport will play a major role.
However, consultation is needed to ensure
that it is aligned with airline requirements.
Finally, safety is critical and has always
been a challenge for Africa. With govern-
ments and industry working together, sig-
nificant improvements have been
achieved.
In 2016, for example, there were no fatal
accidents or hull losses involving sub-Sa-
hara African scheduled airline services. To
sustain and further improve this safety
performance, continuous effort based on
global standards and best practices is
needed.
IATA’s recent study found that, if 12 key
African markets, including Angola, were
opened up, an extra 155 000 jobs and
$1.3bn in annual GDP would be created in
those countries.
“Aviation is vitally important to Africa. It
currently supports 6.8 million jobs and
contributes $73bn in gross domestic prod-
uct (GDP) across the continent. It connects
people and businesses, enables trade and
tourism, reunites families and friends, car-
ries products to markets and vital medi-
cines and aid to communities where they
are needed,” said Alexandre De Juniac,
IATA’s director general and CEO, at the in-
dustry body’s aviation day in Luanda, An-
gola. De Juniac identified four pressing
concerns in Angola and Africa, which gov-
ernments and industry stakeholders must
address for a healthy and strong aviation
system.
Blocked funds and denied access to foreign
exchange in Africa is an increasing problem.
In nine African countries, international car-
riers are unable to repatriate their foreign
currency earnings, while locally-based air-
lines experience difficulties making on-time
foreign currency payments to their suppli-
ers and business partners.
“Angola and other countries blocking
funds are undergoing significant economic
challenges. But blocking airlines’ funds is
not the answer. It is in everybody’s interest
to ensure that airlines are paid on-time, at
fair exchange rates and in full. Angola
needs to work with industry to ensure thatit is prepared to reap the future benefits of
increased air connectivity.” explained De
Juniac.
Aviation stands to be an economic boost
for Africa because there are great oppor-
tunities that Africa can tap into in the avia-
tion industry. At the moment, the
passenger traffic is mainly from 10 African
countries, representing a population of
about 600 million. If there is a 1% traffic in-
crease from the other half of the African
population, there will be an increase of
about six to seven million passengers every
year. Besides, with the rising middle class
in Africa, there will be higher demand for
travel. As a result, the increasing passenger
traffic will easily justify the heavy invest-
ments needed in airlines and airport infra-
structure. According to 2014 data from
ATAG, the spill-over effect from aviation
can be enormous for African economies.
For instance, a vibrant aviation industry can
eventually support the development of the
tourism industry, as well as other related
industries like freight and logistics. For
every dollar invested and contributed by
aviation to the local economy, there is a
multiplier effect of six times more on the
wider economy.
In addition, for every job directly created by
the airlines, another 50 jobs are created in
other industries. The tourism sector is the
greatest beneficiary with 44 potential jobs
created. This means that if the African gov-
ernments, including those in the 29 African
countries where aviation is practically non-
existent, invest in their own airlines and air-
ports, the benefits can be significant for the
continent.t