Developing intra-African trade is the number one opportunity to boosting airfreight volumes in the continent, according to delegates at the 3rd Air Cargo Africa conference and exhibition in Johannesburg (South Africa).
Panellists discussed intra-African trade and how cargo growth could be achieved at the conference’s opening session, Africa’s role in global air cargo.
Last year, the World Bank reported that trade between African countries was only around 10 to 12 per cent, which compared with 40 per cent in North America, and 60 per cent in Western Europe. South African Airways (SAA) acting chief executive officer, Nico Bezuidenhout, says intra-African trade is the principle opportunity for airfreight and there is ample room for all neighbouring countries. “This will have one of the biggest impacts on cargo growth, and is Africa’s next big thing. There is a tremendous opportunity moving forward, and is the biggest for air cargo.”
He explains though that trade barriers, which exist, have to be overcome, and he explains that SAA has faced constant barriers to trade such as regulations and bureaucracy.
Bezuidenhout, says Africa is now only “touching the tip of the iceberg” in terms of airfreight volume, and the expected 20 per cent growth in gross domestic product over the next five years will drive volumes up, and adds: “We expect this sleeping giant (air cargo) to awaken from its slumber.”
Growth in Africa is inevitable according to delegates, but they were quick to point out and outline the immense challenges that the continent faces to achieve the forecasts.
Ethiopian Airlines’ cargo services managing director, Fitsum Abadi, gave a presentation detailing what that the industry needs to overcome and faces in order to achieve the growth potential. Abadi says, these include poor infrastructure of airports, roads, information and communication trechnologies, handling facilities and a lack of multi-modal systems for efficient transportation.
Others are political turmoil; high aircraft fuel prices; high operational charges, taxes; trade barriers between countries; bureaucracy and corruption. He adds: “Air cargo is going to be a major driver for economic development in Africa, and the opportunities are bigger than the challenges.”
A parallel was also drawn between the market with that of Latin America’s 20 years ago, which itself has seen a levelling of growth, after expanding rapidly until a few years ago.
Cargo staff from airlines speaking on the panel, seemed intent on maximising the opportunities that exist, and among them lauding Africa, was Swissport’s head of global cargo, Nils Pries Knudsen. “Africa is seven to eight per cent of our demand in volume, but of the investment that we have carried out in the last five to six years 80 per cent of it has been in Africa. We are focused on the continent and improving infrastructure, as there are so many opportunities and will carry on investing, but we have to be selective,” Knudsen explains.
In November, the International Air Transport Association forecasted that airfreight volumes in Africa will grow by 4.5 per cent in 2015, and around 4.4 per cent until 2020.