New Telegraph

IATA: Nigeria, other African countries’ GDP to hit $2.7bn from air transport

…says foreign currency shortage forcing Nigeria, others to keep airlines’ funds


International Air Transport Association (IATA) has said Nigeria and other African countries could realise $2.7 billion as economic benefits in terms of Gross Domestic Profit (GDP) with air transport liberalisation.

It added that air trade could increase to $1.5 billion and create 300,000 jobs under the Single African Air Transport Market (SAATM).


The SAATM is a flagship project of the African Union Agenda 2063 aimed at creating a single unified air transport  market in Africa. At a briefing, IATA’s Regional Vice President Africa & Middle East, Kamil Al-Awadhi, while presenting figures aboutthecurrentstateof aviation recovery inAfrica and the Middle East said shortages of foreign exchange currency, particularly the United States dollars, have forced many African countries to block foreign airlines from repatriating ticket sales revenue running into millions of dollars.


The blocking of over $800 million in airline funds by Nigeria, Ethiopia, Zimbabwe, Eritrea and Algeria, among others, shows the African countries are facing acute shortagesof foreignexchange currency triggered by the sharp economic downturn as aresultof COVID-19andother economic difficulties. Nigeria is facing dollar shortage because its spends more dollars on imports than it receives from exports.


Kamil Al-Awadhi, who spoke to New Telegraph on the sidelines of the ongoing 78th IATA Annual General Meeting (AGM) taking place in Doha, Qatar attributed blocked funds in some African countries to the usage of funds for the provision of infrastructureinthosecountries andthefactthatthesenations, “Arerunningoutof hardcash or hard currencies.” He said: “The reason for this is that infrastructure is collapsing in these countries.


Theotheriswhenthecountry runs out of hard cash or hard currency. Countries never completely run out of hard cash but it has to be careful of howitspendsmoney onmedicines for their people and on other things. It needs to spend but there is actually nothing they are exporting to get generate more foreign currency.

There is a bounce to this. Aviation brings in raw, hard cash.” Asked whether the countries should still hold on to the money for some time, the IATA chief said they are trying to get the governments to see the advantages of not doing that, saying the action hurts. Al-Awadhi said: “It is one quick win but they lose down the roads because the whole industry is losing with over 300, 000 losing their jobs.


How is that good for the country? “If you start blocking funds, you aredamagingyour aviation industry and so on; youstoppedfundscominginto thecountry. Howdoyouthink they pay for their fuel? They payfortheirfuelinGhana and Nigeria in dollars.”


Speaking on the liberalization of air transport in the country under the Africa Union (AU) propelled Single African Air Transport Market (SAATM), Al-Awadhi said he had visited Africa last year to hold discussions with strategic countries such as Ethiopia, Kenya, Egypt, and South Africa to discuss, among others, ways in which the decision touted to hold importanteconomic boostscould be implemented.


He said IATA had done a GAP analysis on different African countries’ aviation sectors and had also held talks with aviation organisations such as the African Airlines Association (AFRAA), African Civil Aviation Commission (AFCAC), International Civil Aviation Organisation ( ICAO), and AU. “If all goes well then we willhaveameetinginSeptember with these organisation representatives and seven African airlines and I amcertain thattherewillbeprogress,” he said.

He declined to reveal further information but hopeful that the meeting could signal the start of the opening of African skies and air services liberalisation.


The IATA has been a strong advocate of the Single AfricanAirTransportMarket or (SAATM) as it is known – a flagshipprojectof theAfrican Union Agenda 2063 – aimed at creating a single unified air transport market in Africa.

The SAATM was created to expedite the full implementation of the Yamoussoukro Decision At the briefing, Kamil Al- Awadhi presented figures aboutthecurrentstateof aviation recovery inAfrica and the Middle East.


He said, according to IATA analysis, Africahasrecovered 52 per cent from pre-crisis levels. Kamil Al-Awadhi said while domestic aviation had almost recovered completely on thecontinent, regionaltraffic “is just not there.”

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