skycargo.com
Ram C Menen
Divisional Senior Vice President Cargo
22ND February 2011
Nairobi
Air Cargo In Emerging Africa
Africa TradeRepresentation of extremes –dominated by diverse natural resources
•Agricultural products (flowers, fruits & vegetables) &seafood (fresh fish) are the trade mainstay for mostdeveloping countries
•Majority of African countries are underdeveloped andrely heavily on foreign aids to survive
•Trade varies from one country to another
(Countries such as South Africa represent the higher side of the spectrumwhereas regions such as Burundi have the least trade volumes)
4.1
5.0
5.2
4.9
3.3
5.3
3.5
5.2
2.0
6.8
4.7
5.2
5.2
2.8
10.5
5.8
4.0
6.4
5.9
7.0
8.3
3.0
3.1
4.1
4.1
6.5
5.0
6.0
6.0
Africa GDP
Source;of data: Wikipedia
East Africa
Main Countries
•Kenya, Ethiopia, Tanzania & Uganda are the countries withtremendous 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 ofagriculture and telecom , is providing a good growth environment
Challenges
•Poor RFS Infrastructure.
•Goods (perishables) are trucked from rural areas in open trucksexposing 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 miningprojects along with oil & gas exploration/excavation has led tobooming trade & air cargo opportunities.
Challenges
•Port inefficiency & congestion at West African ports areopportunities 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 Egyptremains 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 likeLibya and Algiers.
•Air trade often competes with slower but price competitive surfacetransport modes.
•Political unrest & regulatory issues are a constraint/barrier to aircargo growth.
Southern Africa
Main Countries
•Angola, South Africa, Namibia, Botswana and Zambia.
•South Africa functions as a manufacturing & trading hub for theentire African continent.
•Southern African trade is dominated by Botswana and SouthAfrica, 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 offood, textiles, petroleum products, machinery, electricalequipment, motor vehicles, chemicals & pharmaceuticals via air.
Positives
•Increasing demand for consumer goods and household items
Challenges
•Important constraints to economic development include theCAR's landlocked position, a poor transportation system, alargely unskilled work force & a legacy of misdirectedmacroeconomic policies.
•Factional fighting between the government and its opponentsremains a drag on economic revitalization.
The Forecast Is Bright
Source; Boeing WACF 2010-11
Intra-Africa
•Poor road infrastructure coupled with safety andsecurity of cargo mean that it is probablyfaster/cheaper to use air to inland destinations
•Air cargo is often the most secure and reliable mode indomestic Africa especially to land-locked countries.
•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
Challenges
Africa Economic Outlook
•Fertile ground for new investment andbusiness development
•GDP Growth averaged 4.9% (2004-2009)due to:
–Strong commodity prices
–Higher Asian interest (in terms of tradeand investment)
–FDI - rising external inflows, both in termsof 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
And This, Ladies and Gentlemen
Is Where The Opportunities Are!!
Thank You
………Is Where The Opportunities Are!!
And This, Ladies and Gentlemen
Is Where The Opportunities Are!!
