Access to financing biggest challenge facing African aviation sector, says Nigerian minister

Access to affordable financing and the renewal of aircraft fleets are the most significant hurdles facing Africa's aviation industry, according to Nigeria's Minister of Aviation and Aerospace Development, Festus Keyamo. He emphasized that despite these challenges, the demand for air travel across the continent remains robust.

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

Speaking at the inaugural African Air Transport Conference in Lomé, Togo, Keyamo highlighted the disparity in financing costs. "The real problem of Africa is fleet renewal, access to financing. That’s the real problem of Africa," he stated. While airlines in other parts of the world can secure aircraft financing at interest rates between three and six percent, African operators often face borrowing costs as high as 30 percent.

"How do they get aircraft at competitive rates when other parts of the world are getting aircraft and financing their aircraft fleet at three percent, five percent or six percent? Our banks here are giving us 30 percent and we want to compete in the same market. It’s not possible," Keyamo explained. This financing gap directly contributes to the continued operation of older aircraft within the African fleet.

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

Keyamo pointed out that many aircraft deployed in Africa are second-hand, often transferred after serving airlines in more profitable markets where financing is cheaper. By the time these planes reach Africa, many have already exceeded 15 years of service. "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.

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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.

The minister welcomed initiatives by the African Development Bank and the African Export-Import Bank to support fleet renewal. However, he stressed the need for Africa to reduce its reliance on foreign lessors and develop its own financing solutions. "Africa has to help itself," he asserted, believing that stronger local financing mechanisms are essential for acquiring newer aircraft, expanding operations, and improving air connectivity across the continent.

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Africa has to help itself.