FROM MAGAZINE: Unlocking the hidden potential to drive Africa's air cargo growth

The 'Second ICAO Meeting on Air Cargo Development in Africa' held in Addis Ababa last month reiterated the fact that the continent has tremendous potential waiting to be unlocked. Enhanced investments in technology and infrastructure as well as creating a favourable regulatory environment, will be key drivers for Africa’s air cargo growth. Twinkle Sahita reports

It’s time to unlock the hidden potential in Africa’s aviation sector, industry participants at the second ICAO meeting on Air cargo development in Africa held in Addis Ababa last month said in consensus.

Technological innovation, regulatory reform and investment in infrastructure will be crucial for Africa’s growth in air cargo segment. And the full implementation of the Lomé Declaration will drive the air cargo segment growth, said the president of the ICAO Council, Dr Olumuyiwa Benard Aliu while addressing the conference participants.

The three-day event witnessed participation of shippers, airlines, airports, freight forwarders, regulatory authorities - all the key stakeholders from the aviation sector, to discuss sustainable solutions to drive air cargo growth in Africa.

The primary objective of the Lomé Declaration is to enable the unobstructed flow and rapid release of goods through enhanced trade facilitation and custom clearance frameworks. The key outcome was the adoption of a new Statement on the Implementation of the Lomé Declaration, reaffirming commitment to the sustainable development of air cargo in Africa.

“In Africa today, aviation supports millions of jobs and $72 billion in GDP. The importance of air freight as a key enabler of international trade, especially on high value and time-sensitive goods, is reflected in the fact that air transport carries around 35 percent of world trade by value,” Dr Aliu remarked. He also added that growth in African freight traffic outpaced the global average last year and that cargo capacity offered by African carriers in the region surged by over 20 percent in 2016.

Dr Aliu noted that progress in support of the Declaration should be achieved through the ratification of the 1999 Convention for the Unification of Certain Rules for International Carriage by Air, to which only 56 percent of African states have adhered, the realisation of the ambitious ‘E-Trade for All’ initiative. This, ICAO is undertaking in collaboration with other UN agencies. The deployment of the Cargo Service Quality Index for measuring freight performance at the airport level, a project that ICAO is developing with the International Air Cargo Association.

Innovation is particularly crucial as e-commerce will continue to be a significant driver of this growth. “The air cargo share of items purchased online grew from 16 percent to 74 percent between 2010 and 2015 and is projected to reach 91 percent by 2025. The number of parcels flown by air has increased from around 130 million in 2011 to around 400 million in 2015, at a staggering 30 percent average annual growth rate,” Dr Aliu explained.

Progress on the implementation of the Lomé Declaration furthermore requires enhanced investment in ground infrastructure, aircraft, and human resources.

One of the major areas of challenges widely discussed was the slow implementation of the Yamoussoukro Declaration that has created regulatory impediments to investments into aviation and therefore resulting in lower connectivity and less competitiveness. In order to advance the concrete implementation of the African Union (AU) Agenda 2063 on the creation of a Single African Air Transport Market (SAATM) through the Yamoussoukro Decision by 2017 July, 17 African states have committed themselves to the implementation of the SAATM.

Tewolde Gebremariam, Group chief executive officer of Ethiopian Airlines, reiterated the aviation sector’s role for public transport service in Africa, indicated that air cargo is the most important factor for the socio-economic development of Africa than any other part of the world, where infrastructures for other modes of transport are underdeveloped. He also indicated that for African countries, possessing an economy largely dominated by agricultural and horticultural products export, air cargo is an ideal option. He stated, “Kenyan flowers, Ethiopian flowers, all depend on air cargo.”

Gebremariam also urged all stakeholders to join hands and save Africa’s air transport industry sector, saying that “the industry in Africa is dying. All of us have to join hands to save the industry from its natural death.”
Sanjeev Gadhia, founder and CEO of Astral Aviation, expressed his concerns over the competition of African carriers with the Middle Eastern carriers. He highlighted the need for African carriers to increase co-operation amongst each other to withstand competition against the Middle Eastern carriers. Considering that pharmaceuticals represent a major segment for Africa, Gadhia of Kenya based cargo airline, Astral Aviation, added, “There is lack of cooling infrastructure for pharma air shipments in the primary African airports. We need to work on improving infrastructure to handle this temperature sensitive commodity efficiently.”

Vladimir Zubkov, secretary general, TIACA, cited few issues that need to be resolved quickly. Some of them are connectivity, facilitation of electronic processes, introducing single window processes, implementation of risk management border control.

“There is a demand for action on the regulatory side,” said Zubkov. To add to that, Chris Welsh, secretary general, Global Shippers’ Forum, said, “Create the right regulatory and commercial environment for African industry to compete internationally.”

Welsh added, “Infrastructure investment is a vital ingredient for successful aviation sector in Africa.” Presenting shippers’ point of view, he added, “For shippers’, industry investment in airport capacity, cargo facilities is key for connectivity and access to intra African and global markets.” He finds the need to streamline procedures at international airports.

The good news is that one of the major IT solutions provider CHAMP Cargosystems is optimistic of the fact that African air cargo industry will slowly embrace technological innovations to deal with the existing problems. “We are already supporting 51 customs in Africa with IT solutions,” said one of the company representatives.

Customs and other regulatory agencies in Africa are problematic links in global supply chain due to prolonged/slow bureaucratic processes. Fitsum Abady, managing director, Ethiopian Cargo Services, was of the view that single window initiative will ease the processes for traders and also help cross border e-commerce by facilitating timely movement of goods.

The conference participants also acknowledged the fact that intra-Africa air cargo services’ liberalisation should be considered by the African states.

Organised by ICAO in cooperation with the Ethiopian Civil Aviation Authority, Ethiopian Airlines and The International Air Cargo Association, the Second Meeting on 'Air Cargo Development in Africa' was opened by Getachew Mengiste, State Minister, Ministry of Public Enterprises of Ethiopia. It was attended by 247 participants representing 21 states, seven international organisations, and industry stakeholders from Africa, Asia-Pacific, the Caribbean, the Middle East, Europe and North America.