Access to financing biggest challenge facing African aviation sector

The Minister of Aviation and Aerospace Development, Festus Keyamo, has identified access to affordable financing and fleet renewal as the biggest challenges facing Africa’s aviation industry, saying demand for air travel across the continent remains strong.

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Mr Keyamo spoke on Tuesday at the sidelines of the inaugural African Air Transport Conference in Lomé, Togo, where aviation stakeholders discussed ways to improve air connectivity and strengthen the sector across Africa.

“The real problem of Africa is fleet renewal, access to financing. That’s the real problem of Africa,” the minister said.

According to him, the continent’s airlines are struggling to compete because they lack access to the low-cost financing available to operators in other parts of the world.

“The traffic is there, the desire to travel is there, the private airlines are also coming up now,” he added.

Mr Keyamo noted that while airlines in other regions can finance aircraft acquisitions at interest rates ranging from three to six per cent, African operators often face borrowing costs of about 30 per cent.

“How do they get aircraft at competitive rates when other parts of the world are getting aircraft and financing their aircraft fleet at three per cent, five per cent or six per cent? Our banks here are giving us 30 per cent and we want to compete in the same market. It’s not possible,” he said.

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He linked the financing gap to the continued use of older aircraft by many African airlines.

According to him, aircraft are often deployed in more profitable markets during the first years of their operational life before being transferred to Africa much later.

“Most of the aircraft that come to Africa are old aircraft. We all complain about them, but the issues are deeper than a minister simply saying don’t bring this aircraft,” he said.

“If you don’t bring it, where will we get the newer ones from?”

The minister explained that many aircraft operating on the continent have already spent years serving airlines in markets where financing costs are lower and profits are higher.

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By the time such aircraft arrive in Africa, he said, many have already exceeded 15 years in service.

Mr Keyamo welcomed ongoing efforts by the African Development Bank and the African Export-Import Bank to support fleet renewal across the continent.

He argued that Africa must reduce its dependence on foreign aircraft lessors and develop financing solutions tailored to its realities.

“Africa has to help itself,” he noted.

The minister added that stronger financing mechanisms would help airlines acquire newer aircraft, expand operations and improve connectivity across the continent.