Air travel and Africa’s economic integration

It is perhaps ironic that Nigeria, few weeks after it rejected to sign the Africa Continental Free Area (AfCTA) agreement in Kigali, will be hosting the 59th Airports Council International Africa Board and Committees Meetings and Regional Conference and Exhibition. It is ironic because after staying out of an Africa-wide agreement to free trade, Nigeria is hosting 47 African countries that belong to the trade body for the world’s airports that promotes greater economic integration amongst African economies.

Unlike our absence in Kigali, the conference, holding over a six-day period in Lagos, provides a good platform to re- engage Africa on a broader agenda for Nigeria’s relations with the continent and the global economy in general. It is also a good platform to argue that trade in goods and services, and even immigration, which drive aviation business and economic growth, is never a zero-sum game, but the platform on which advanced countries have made economic progress, improved standards of living, and reduced poverty.

With over 60 members managing about 250 airports in 47 countries, and 182 million passengers a year, according to 2016 figures, ACI Africa is best placed to make a case for the deeper economic integration in Africa. Interestingly also, it recognises that for it to raise the number of passengers, raise its income, and compete successfully with established European, Pacific, and Asian airports, the airports in Africa would need to change their business models, transform their businesses and ensure that they are sustainable without undue reliance on government support. It is in this context that the theme of the conference- Business Transformation for Sustainable Development of African Airports– gives weight to the message of integration.

Indeed, the growth expectation from trade, migration and deeper interrelations between African citizens and economies is the foundation for the expected business transformation of our airports. It is in this context that a wider continental free trade should be encouraged, and the over 300 aviation experts attending the conference, rather than being cowed, provide the strongest possible narrative for expansion in Africa economic integration.

Already, IATA has estimated that an open sky agreement between the largest economies in Africa will see passenger traffic up by 81% to about 11 million, generating 155,000 jobs and adding US $1.3 billion to the continent’s GDP. The expectation is that this will lead to additional 17,400 jobs in Nigeria and add US$128 million to country’s GDP.

This will not only drive trade in goods and services, but also in tourism. This especially follows the recognition that the next wave of aviation growth in the coming decades will come from Africa. to leverage on this growth, Africa airports, including Nigeria, cannot afford to look at the airport development, nor the transformation of the business environment in isolation of the trade between the economies, both within and outside the continent. That is why the trade relations within the continent is important, and the calls for protectionism and isolation must be resisted.

Opponents of AfCTA base their arguments on the non-competitive nature of our manufacturing sector, our import substitution policy, orientation infrastructure, and that the AfCTA will only encourage industrialised countries to use other African nations to push their products to the Nigerian market. But the AfCTA was not conceived in 2018, but at the 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union held in Addis Ababa, Ethiopia in January 2012.

Therefore, the pat on the back that the non-signing of the deal as a marked departure from past experiences when critical sections of the policy were ignored is slightly inaccurate. To improve trade relations, we cannot be caught off guard and unprepared. It is also inaccurate to say our trade within the Economic Community of West African States as a losing trade case, when data shows that we have a very positive balance of trade with our West African neighbours..Therefore, rather than opting out of such agreements, for fear that the measures contained in such agreements will be detrimental to our economy, we must always do one critical thing: don’t take the back seat, engage other countries in Africa to expand trade and increase productivity. We are demonstrating this is in aviation.

The conference in Lagos thus provides an important opportunity for Saleh Dunoma, Managing Director Federal Airports Authority of Nigeria (FAAN) and the current President of ACI Africa Executive Board, a first for Nigeria to lead our re engagement with Africa.

If AfCTA is not ideal for Africa, and Nigeria in particular, it must be reworked but not jettisoned. It is in past five years that discussion started that the points against it should have been made, and not a day to the signature. The next best time is now because the declaration is only a start in principle. The real discussion starts now, and we must be part of it. Otherwise, in a few years’ time, we will be affected by the decisions, without the ability to shape it.

Since the AfCTA document is not yet in force there is an opportunity to mend what was clearly a broken process. There are still over 20 declarations yet to be signed. It contains measures on trade in services and intellectual property and this should favour the Nollywood and Nigeria’s broader entertainment industry. Visa on point of entry will be facilitated and continental protocols and immigration issues. And a favourable conclusion can only mean growth for Nigeria’s aviation industry and transform its business landscape. FAAN, since the presidential mandate on ease of doing business, has streamlined processes at the international airports to reduce the time passengers spend with official.

In conclusion, until now, we have failed as a nation to engage within and without on trade. That cannot continue if we are to make progress in aviation and the broader economy. So, this gathering of airport managers from across Africa further makes a vigorous case for integration of Africa, from the perspective of trade and broader economic linkages.

Ogho Okiti

Dr. Ogho Okiti is an economist and CEO of Time Economics, an economics consulting firm, based in Abuja. You can follow him on Twitter @Dr_Okiti.