Aviation and logistics in Africa’s regional integration

Africa’s regional economic integration represents the continent’s most ambitious political innovation since the wave of decolonization that started in the late 1950s. It is widely recognized that realizing this vision will depend largely on the extent to which Africa is able to invest in adequate energy, transportation, and telecommunications infrastructure.

Considerable attention in the area of infrastructure is being given to surface transportation. This focus  is largely influenced by historical trends where roads, railways, and waterways became the dominant modes of transportation. As Jo Guldi argues in her book, Roads to Power, Britain invented the world’s first infrastructure state. With it also came a new form of technocratic governance that wielded considerable influence of the population.

The story of 19^th century Britain more recently has played out in China, which displays the same attributes of the infrastructure state. Africa’s growing ties with China are also playing a key role in reinforcing the focus on surface transportation. This is mainly because China’s contemporary economic history has been significantly shaped by heavy investments in surface transportation.

For Africa, however, air transportation and the associated logistical services may provide a unique opportunity for the continent to facilitate regional economic integration. Africa is pursuing its regional integration goals in a new age with greater access to additional technologies.

Digital infrastructure, for example, is helping to shrink time and make transactions more efficient. The rapid adoption of mobile technology and the wave of large-scale investments in fiber optic cables have demonstrated the critical role that infrastructure can play in regional integration. But this is not a substitute for moving goods and people—or the shrinking of space.

Africa’s regional integration must take into account its vast land mass. The continent is roughly three times the size of the United States (without Alaska). Put differently, one can fit the United States, Western Europe, India, China and Britain into Africa. This land mass includes vast deserts, mountains, forests, and other geological formations that limit transportation possibilities.

The geographical scale of the continent is only matched by its economic prospects arising from regional integration. For example, the adoption of the Tripartite Free Trade Area (TFTA) in June 2015 created a market of 640 million people in 26 countries with a total GDP of $1.5 trillion. If the TFTA were a country its trade volume would comprise the 13th largest economy in the world. Much of the discussion on regional integration has focused on the free movement of goods and services.

Another consideration for expanding aviation is that Africa has 17 land-locked countries with no access to the sea. Another six African nations are island states. Cost-effective air transportation is essential for improving economic integration of these economies with the rest of the continent.

These possibilities demand greater attention to research, training, and outreach activities related to the role of aviation, logistics, and innovation in Africa. This is guided by the view that aviation and the related logistics have two strategic links with regional integration.

First, expansion of the industry (in its fullness to include passenger, cargo, communications and technological services) represents an effective way to promote regional integration. Second, implementing continental commitments such as the Yamoussoukro Decision on open sky in turn helps to expand the aviation and logistics industry.

According to industry estimates, current protectionist measures that raise prices cost African airlines nearly US$300 million in 2015. African airlines carry only 20% of African passengers, with the rest opting for foreign carriers. In 2015 African airlines recorded 3.1% drop in demand, according to the International Air Transport Association (IATA).

Further growth, however, will involve network expansion and reduction in prices, which can benefit greatly from an open sky regime. Such a regime will help realize the Continental Free Trade Area (CFTA), due to be launched in 2017. The CFTA will in turn help promote the expansion of the industry.

Ways should be sought to foster mutual reinforcement between regional integration, logistics, and the aviation industry. Emphasis should be placed on how the sector can serve as a center for the diffusion of engineering, technological, business, and scientific capabilities into the wider economy.

Proposed activities include the need to establishment of world-class research and training facilities in African universities to advance aviation and logistics. African nations could pursue even grander visions. For example, aviation training academies provide fertile grounds for creating the first generation of Africa’s innovation universities that build on technological advances. As stressed by Sören Eriksson and Harm-Jan Steenhuis is their book, The Global Commercial Aviation Industry, there “exist few other industries with a higher level of interdependence and cross-fertilization of advanced technology.”

Building capacity in aviation and the related logistics is not an optional matter—it is a necessity as illustrated by its poor safety record. According to the Economist, the European Union “has banned no fewer than 108 airlines from 14 African countries from its airspace because of safety concerns. These include all airlines registered in, among other countries, Zambia, Sierra Leone, Mozambique and both of the Congos.”

There are many starting points for using aviation infrastructure to stimulate innovation. For example, Ethiopian Airlines—which celebrates its 70^th anniversary in 2017—could provide the much-needed continental leadership in building such foundations for advancing aviation engineering, logistics, innovation, and entrepreneurship.

In addition, leading institutions of higher learning with continental mandates such as the Jomo Kenyatta University of Agriculture and Technology could explore setting up institutes or schools devoted to aviation, logistics, and innovation. They can partner with leading international bodies such as the FIATA Logistics Academy.

Such measures would also contribute directly to the implementation of both the African Union's 10-year Science, Technology and Innovation Strategy for Africa (STISA-2024) and the 50-year Agenda 2063. Indeed, the rapid growth in the African aviation industry is helping to inspire young people on the continent to want to study aerospace engineering.

Opportunities for funding growth in African airlines continue to expand. For example, the African Export-Import Bank has earmarked US$20 billion as syndicated loans for airlines to purchase airplanes. The real limiting factor is the closed sky and limited appreciation of the role of aviation, logistics, and innovation in Africa’s economic transformation.