The President African Development Bank (AfDB), Dr. Akinwumi Adesina, says African aviation needs financing with about $150 billion needed in aircraft acquisition financing alone.
Adesina made this known while speaking at the International Civil Aviation Organization’ (ICAO) third International World Aviation Forum (IWAF3) in Abuja on Tuesday.
He said the way the present Africa’s aviation architecture is constructed, its difficult for the industry to grow adding that African countries must make air interconnectivity seamless.
“Africa needs to procure about 970 jets and 700 turboprops over the next 20 years. Financing needs will exceed $150 billion! African aviation needs fleet modernization, efficiencies, better connectivity and much improved quality of services for an exponential growth in the number of passengers” he said.
Accord to the AfDB President, “the fact is, Africa faces much higher costs for aircraft purchases due to the relatively small size of most airlines, weak balance sheets for corporate loans, a lack of access to export credit agreements, higher insurance costs, inability of commercial banks to provide long term financing, and very high interest rates when they do.”
“Africa also does not have any aircraft leasing markets, and therefore has to lease planes at much higher costs, sometimes 100 percent higher than developed economies. There is a compelling need to address market failures in aircraft financing” he noted.
“Availability of aviation infrastructure varies across Africa. North, East and Southern Africa have established hubs in Cairo, Addis Ababa, Nairobi and Johannesburg. West Africa on the other hand, lacks a major and effective hub, something Nigeria, Côte d’Ivoire and Togo should help build. As the largest economy in Africa, Nigeria should lead the effort and be the integrator for regional air travel” he said.