By GEORGE MUMBO
Mr Mumbo, who consults on aviation, is the founder and chief executive of Aerospace Consortium
About two decades ago, one could not talk about Africa without painfully recounting numerous horrid challenges it faced, ranging from disease, hunger and poverty to civil wars.
Put candidly, Africa looked very unattractive to most risk-averse investors.
However, looking at the continent today, a lot seems to be changing in terms of its appeal to the outside world.
There is a growing global focus on Africa as the new frontier for economic growth. The continent’s promise in terms of business is increasingly becoming evident.
As testimony to this turn of fortunes, Africa has lately outpaced the developed world in key economic indicators.
Its GDP growth averaged 4.9 per cent between 2004-2009 due to strong commodity prices, rising foreign direct investment, and increased spending by governments.
The GDP growth is expected to reach 7 per cent this year against a global GDP projection of 4.5 per cent.
Earlier this year, the respected Economist magazine identified six African economies as among the fastest growing globally in the last 10 years.
These are Angola, Nigeria, Ethiopia, Chad, Mozambique and Rwanda.
As a result, and in the face of global economic turmoil, investors are now busy all over Africa looking for opportunities as the economies in Europe, Asia and the Americas recover at a much slower pace.
As the new frontier for doing business, Africa is well-endowed. It boasts rich mineral resources and a hard-working population which, combined, underpins economic growth.
But with all the renewed focus on Africa, the continent’s potential continues to be hampered by debilitating constraints such as under-developed infrastructure, political volatility and conflicts, not to mention regulatory barriers and a legacy of poor macroeconomic policies.
At the recent World Economic Forum for Africa held in South Africa, it was felt that while Africa had great potential, trade imbalances in favour of developed and emerging economies continue to stifle take-off.
The lack of infrastructure is compounded by the fact that many countries are landlocked, thus denying them efficient, fast and reliable means to access the international market.
However, every dark cloud has a silver lining. By its very nature, air transport is able to surmount many of the barriers that hold back economic development.
This is because freighting cargo is seen as the most secure and reliable mode of moving goods and commodities to markets.
Increased trade within the continent and between Africa and global economic players like the European Union and China signifies good prospects for the continent.
Africa will continue to reap benefits from rising global demand for resources like oil, natural gas, food especially grains, and even arable land.
For instance, between 1990 and 2008, Asia’s share of African trade doubled to 28 per cent.
Meanwhile, trade with Western Europe shrunk from 5 per cent to 28 per cent in the same period.
Countries like China have emerged as Africa’s key trading partners.
Others like Brazil and India are busy forging trade and investment partnerships with African countries.
And as trade picks up, so does human travel. Data from the International Air Travel Association shows that intra-Africa passenger growth is on the upswing.
Similarly, growth in travel between Africa and the Middle East and the Far East continues to be strong.
What this means is that Africa has become a key travel hub. This spells good prospects for airlines serving intra-African routes and those from Africa to other continents.
For instance, Kenya Airways is set to consolidate its presence on the continent.
Currently, it flies to 55 destinations globally, 46 of these in Africa with great prospects for opening up new routes.
However, a lot still needs to be done to open up African skies to key airlines that are keen to tap the emerging opportunities in Africa.
There is a need for African governments to be more flexible in opening up their air spaces and even adopting open sky policies.
This would result in a more competitive aviation sector and hence increase trade opportunities.
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