The United Nations Economic Commission for Africa (UNECA or ECA) has listed the benefits of Single African Air Transport Market (SAATM), or air service liberalisation.
SAATM is a flagship project of the African Union’s Agenda 2063, to create a single unified air transport market in Africa, liberalize civil aviation and drive the continent’s economic integration agenda.
The Declaration on the establishment of a Single Africa Air Transport Market was adopted by the African Union (AU) Assembly in 2015. SAATM was formally established and launched on January 29, 2018 by African Heads of States and Government.
In his presentation at a recent webinar organised by ECA, Robert Lisinge, chief of the energy, infrastructure and services section at ECA, said the air service liberalisation would lead to 27.4 percent average fare reduction across Africa; providing over US$ 1.5 billion saving per annum.
Similarly, it would result to US$ 2.9 billion total increase in consumer surplus across AU countries, and 145 additional country-pairs will receive direct service.
Other benefits as he highlighted included a 27 percent increase in frequencies on existing routes US$ 1.7 billion additional tourism spending, 597,460 additional jobs and US$ 4.2 billion additional GDP across Africa (0.17% of total GDP of AU countries).
According to ECA’s latest estimates, intra-African trade in transport services has the potential to increase by nearly 50 percent.
In absolute terms, over 25 percent of intra-African trade gains in services would go to transport alone; and nearly 40 percent of the increase in Africa’s services production would be in transport.
“African Continental Free Trade Area (AfCFTA) therefore expected to significantly increase traffic flows on all transport modes: Road, Rail, Maritime, and Air,” he said.
AfCFTA is said to boost intra-African trade by around 40 percent, with substantial benefits to the transport sectors.
Lisinge noted that transport constraints compounded by COVID-19: African airlines severely hit by the pandemic.
Consequently, full year revenue loss for African airlines in 2021 is estimated at US$8.2 billion, approximately 47.2 percent of the full year 2019 airlines revenue.
He said re-start of operations on intercontinental routes by African airlines reached 77.8 percent in August 2021 compared to 2019: Egyptair, Ethiopian Airlines, Royal air Maroc and Rwandair now operate to about 90 percent of their pre-COVID intercontinental destinations.
The ECA chief was concerned that perception of transportation as a major constraint may repel investors from African countries.
Transport contributes significantly to Africa’s economies; he said adding that it contributes more than 5 percent of value addition in over 20 countries.
He recommended that Africa mobilise resources for the transport sector given its importance to national economies. Also, the continent should stabilise transport services and construction prices.
More so, it needs to implement the Priority Programme for Infrastructure Development in Africa (PIDA) projects to optimize the benefits of AfCFTA.
Other recommendations included to implement the Inter-Governmental Agreement on the Trans-African Highways, finance road safety, sign the solemn commitment to the Single African Air Transport Market; and fully implement the Yamoussoukro decision on the liberalization of air transport.
There is also the need to sign and ratify the Luxembourg rail protocol to attract private sector investment in rolling stock, and support the civil aviation industry.