Transcript Ram C Menen, (Divisional Senior Vice President Cargo)

Air Cargo In Emerging Africa
Ram C Menen
Divisional Senior Vice President Cargo
skycargo.com
Nairobi
22ND February 2011
Africa Trade
Representation of extremes –
dominated by diverse natural resources
• Agricultural products (flowers, fruits & vegetables) &
seafood (fresh fish) are the trade mainstay for most
developing countries
• Majority of African countries are underdeveloped and
rely heavily on foreign aids to survive
• Trade varies from one country to another
(Countries such as South Africa represent the higher side of the spectrum
whereas regions such as Burundi have the least trade volumes)
Africa GDP
4.9
4.1
5.0
5.0
5.2
5.2
5.2
4.7
5.3
3.3
3.5
5.2
2.0
6.8
6.0
5.8
2.8
4.0
6.0
10.5
6.4
5.9
4.1
4.1
3.1
3.0
Source;of data: Wikipedia
6.5
7.0
8.3
East Africa
Main Countries
• Kenya, Ethiopia, Tanzania & Uganda are the countries with
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tremendous air cargo potential.
Main Products
Exports of horticultural products dominate in this region.
Kenya (meat, fish, flowers, fruits), Ethiopia (flowers)
Uganda (fish, fruits & flowers).
Imports tend to be more of infrastructure development equipment
Positives
Continued infrastructure development, especially in the field of
agriculture and telecom , is providing a good growth environment
Challenges
Poor RFS Infrastructure.
Goods (perishables) are trucked from rural areas in open trucks
exposing items to spoilage & adding delivery timing risks.
West Africa
Main Countries
• Nigeria, Ghana, Guinea, Senegal, Mauritania and Mali
predominantly all have high imports.
Main Products
• Imports - Nigeria (oil & drilling equipment), Ivory Coast (mining).
• Exports - Ghana (fruits), Senegal & Mauritania (fish).
Positives
• Investment in African resources sector covering varied mining
projects along with oil & gas exploration/excavation has led to
booming trade & air cargo opportunities.
Challenges
• Port inefficiency & congestion at West African ports are
opportunities for air cargo.
• Poor RFS infrastructure mainly in land locked Mauritania & Mali.
• Volatile nature of West African politics/unrest in Cote d’Ivoire.
• Insecurity & pilferage at West African airports.
North Africa
Main Countries
• Egypt, Libya, Morocco, Tunisia & Algeria
predominantly all have high imports.
Main Products
• Morocco / Egypt/ Tunisia have fresh produce exports and Egypt
remains the biggest exporter of fruits/vegetables.
Positives
• Northern African countries, Europe’s principal trading partners,
maintain strong economic ties with EU, fueling trade demand.
• Good RFS infrastructure & development.
Challenges
• Security and embargo have adversely affected countries like
Libya and Algiers.
• Air trade often competes with slower but price competitive surface
transport modes.
• Political unrest & regulatory issues are a constraint/barrier to air
cargo growth.
Southern Africa
Main Countries
• Angola, South Africa, Namibia, Botswana and Zambia.
• South Africa functions as a manufacturing & trading hub for the
entire African continent.
• Southern African trade is dominated by Botswana and South
Africa, who are the two biggest exporting countries in Africa.
Main Products
• South Africa is the world’s biggest producer of gold/diamonds &
has a healthy product cargo mix from machinery to perishables.
• Namibia (Fish), Mozambique & Madagascar (Fruits).
Positives
• Most of Southern Africa have a large pool of skilled labour,
advanced infrastructure and developed financial resources.
• Good RFS infrastructure & development.
Challenges
• Security although improved is still an area of concern.
Central Africa
Main Countries
• Chad, Cameroon, Central African Republic (CAR).
Main Products
• Limited export opportunities… imports include large volumes of
food, textiles, petroleum products, machinery, electrical
equipment, motor vehicles, chemicals & pharmaceuticals via air.
Positives
• Increasing demand for consumer goods and household items
Challenges
• Important constraints to economic development include the
CAR's landlocked position, a poor transportation system, a
largely unskilled work force & a legacy of misdirected
macroeconomic policies.
• Factional fighting between the government and its opponents
remains a drag on economic revitalization.
The Forecast Is Bright
Source; Boeing WACF 2010-11
Intra-Africa
• Poor road infrastructure coupled with safety and
security of cargo mean that it is probably
faster/cheaper to use air to inland destinations
• Air cargo is often the most secure and reliable mode in
domestic Africa especially to land-locked countries.
Challenges
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Physical infrastructure
Reduction of FDI due to political instability
Inadequate transportation networks
Lack of government transparency
Administrative & regulatory constraints
Lack of security
Lack of skilled labour & business knowledge
Out-dated technology
Africa Economic Outlook
•Fertile ground for new investment and
business development
•GDP Growth averaged 4.9% (2004-2009)
due to:
– Strong commodity prices
– Higher Asian interest (in terms of trade
and investment)
– FDI - rising external inflows, both in terms
of capital and investment.
– Rising fiscal spending
• These challenges can all be positives
• The legacy is going to be replaced with
everything new and modern
• Africa is able to leapfrog technology
Political Situation