Air travel necessary for continued sub-Saharan growth

Air travel necessary for continued sub-Saharan growth

While the prospects of massive economic growth throughout Africa have been heavily touted by the international press, the physical interconnectivity of sub-Saharan states and their links to potential investors in Asia and the West remain problematic.

According to the International Monetary Fund (IMF), ten of the twenty fastest-growing economies in the next five years will be in sub-Saharan Africa. Investors from the U.S., France, Malaysia, China and India continue to pour money into the continent, helping to diversify African economies away from resource extraction and toward manufacturing, light industry and modern telecommunications. While these trends point to a bright future for African economies, they overlook one key component to Africa’s economic future: widespread transportation infrastructure.

Development of cost-effective transportation networks is a well-established indicator of future economic success and political development. There is perhaps no greater example of this phenomenon than the U.S.’ construction of the Transcontinental Railroad, which opened the ‘Great American Desert’ for settlement and promoted new economic development throughout the western U.S. The Eisenhower Interstate Highway System and the German Autobahn provided similar leaps in economic growth and consolidation.

Unfortunately Africa’s geography does not lend itself well to freeways and railroads. The sheer scope of Africa’s landmass would overwhelm a civil engineer; the stalled British attempt to build a railroad from Cape Town to Cairo, abandoned since the Second World War, is indicative of the difficulties inherent in developing any land-based infrastructure designed for inter-African commerce. Most reporting on Africa’s development overlooks the correlation between the continent’s greatest success stories – including Ghana, Nigeria, Kenya, and South Africa – and their geographic locations. The countries with the greatest prospects for both economic development and political stability are coastal states, with easy access to ports and the trade opportunities they offer. On the other hand, many of Africa’s most historically violent states are virtually inaccessible and appear to remain in perpetual conflict. The Democratic Republic of the Congo is perhaps the most worrying example.

Fortunately this trend may change as new low-cost airlines spring up throughout the continent. While significantly more expensive than travel by rail or bus, inter-African flights could mitigate many of the physical constraints on transportation throughout the continent. The Economist reports that Fly540, a bare-bones airline operating in Kenya, has cut the price of domestic air travel by 55 percent in many cases, allowing the country’s burgeoning middle class to fly between Nairobi and other cities in a fraction of the time needed to travel the same distances overland. As of June 14th, FastJet – Fly540’s parent company – has been granted permission to launch international flights from its hub in Dar es Salaam to Rwanda, South Africa and Zambia. This news is perhaps most beneficial to Rwanda, which is home to well-developed tourism and services industries but lacks the agricultural or mineral resources that might more readily attract investors.

Domestic and inter-African flights, however, only address part of the problem. While links between remote cities in a single country will prove critically important for political and economic consolidation in sub-Saharan countries, it will be far more important to establish links between Africa and potential investors. Carriers in the U.S., for example, have been unable to establish a direct flight to Nairobi due to security concerns held by the Federal Aviation Administration, primarily as a result of an attempt by a militant group to shoot down an Israeli flight leaving Nairobi in 2002. These fears are unlikely to dissipate anytime soon, especially given renewed concerns over missing SA-7 surface-to-air missiles that are likely to have fallen in the hands of Islamic extremists after the fall of the Gaddafi regime in Libya. While other countries are likely to begin air service to Africa in the near future—Air India, for example, has promised to resume flights to East Africa soon—these are only small steps toward robust air service between the continent and the world’s economic giants.

As always, corruption and high costs have discouraged many investors from putting serious resources toward comprehensive air service in Africa. Insurance premiums are astronomical given African airlines’ poor safety records, and ticket taxes imposed by rent-seeking government officials will continue to dog investors. At the same time, increased competition among carriers will continue to drive down ticket prices, a boon for consumers hoping to travel cheaply but a serious concern for operators worried about their bottom line.

Africa’s political and economic leaders should work together to reduce the costs of operating airlines in the continent. By establishing strict safety standards—and the oversight bodies required to enforce them – and working to cut down on taxes and other rents, stakeholders in African development should be able to promote the services offered by FastJet and its competitors. Other costs, such as the price of fuel and aircraft leases, will likely remain high, but the benefits should outweigh the price of entry. As Africa’s middle class grows, and along with it, the continent’s services industry, air travel should be a profitable investment for airline operators, and a harbinger of continued economic success and political consolidation throughout the continent.

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