Africa’s aviation sector remains constrained by capital access, despite rising demand. The trade finance gap continues to limit fleet expansion and connectivity. However, a widening leasing disparity is now forcing fresh thinking. Industry leaders argue that trade finance structures could unlock fleet modernisation and reposition aviation as a key enabler of trade across the continent.
Speaking at an industry forum, Project Finance Desk, Ayo Mobarak of Afreximbank said aviation’s role in trade remains underutilised. He stressed that airlines are unable to efficiently support movement of goods and people, which continues to drive up the cost of trade.
“The role of aviation to support trade and industrial growth remains significantly untapped,” Mobarak said. “Regional and local airlines… continue to operate under significant constraints and particularly high cost of trade.”
At the centre of the issue lies a stark leasing imbalance. A 2022 Afreximbank study shows global airlines operate with about 81% leased fleets, compared to just 38% in Africa. This gap reflects deeper trade finance constraints tied to funding access, risk perception, and weak capital markets.
Mobarak explained that African carriers struggle with “access to long-term financing, competitively priced aircraft financing… and limited fleet growth and renewal.” Consequently, airlines rely heavily on short-term, high-cost arrangements that weaken operational sustainability and delay modernisation.
However, the problem extends beyond financing availability. African airlines face “systematic barriers to accessing aircraft financing,” driven by perceived sovereign and airline credit risks. These risks increase capital costs and restrict access to long-term dollar funding, export credit support, and global leasing markets.
“These constraints translate into materially inferior terms for the African airline industry,” he said. Airlines are therefore pushed into “short-term, high-cost operating basis, high maintenance reserve requirements,” limiting competitiveness.
Meanwhile, the impact is visible across the sector. Poor leasing penetration has slowed fleet renewal and widened the gap with Asia and Western markets. Without stronger trade finance frameworks, Africa risks falling further behind in aviation efficiency and trade facilitation.
Trade Finance Pooling as Leasing Gap Solution
Mobarak identified trade finance pooling as a viable solution to bridge the leasing gap. This structured approach aggregates multiple exposures into a single diversified pool, reducing risk and improving access to capital.
“For those who may not be familiar… trade finance pooling is a structured finance approach where multiple trade finance exposures… are combined into one single diversified pool,” he said.
Applied to aviation, pooling allows airlines to access financing collectively rather than individually. This reduces fragmentation and improves credit strength. As a result, capital becomes cheaper, more predictable, and scalable across multiple markets.
“This simple principle can be applied to aviation,” Mobarak added, noting benefits such as “diversification, standardisation, [and] credit enhancements.”
Afreximbank is already advancing this model through a proposed aircraft leasing platform. Under the structure, aircraft serve as revenue-generating assets within a Special Purpose Vehicle. The platform blends equity and debt while using guarantees to attract institutional investors.
“We are providing both equity into the leasing platform and putting the necessary guarantees… to encourage investors,” Mobarak said. This approach positions trade finance as a bridge between aviation risk and global capital.
Importantly, the bank’s development arm will provide equity, while guarantees reduce investor exposure. This blended model is expected to draw pension funds and sovereign wealth investors into aviation—an area they have largely avoided.
“Investors can participate in both debt and equity with well-defined risk parameters,” he noted. This creates a structured pathway for long-term capital inflows into African aviation.
Beyond aircraft acquisition, the platform could stimulate industrial growth. Predictable fleet planning supports maintenance facilities, training centres, cargo operations, and logistics hubs. These elements are essential for strengthening trade ecosystems across Africa.
Mobarak emphasised that aviation should be viewed as trade infrastructure. Expanding cargo fleets and ground handling capacity would directly enhance trade flows and regional integration.
However, scaling this model requires regulatory alignment. Strong governance frameworks remain critical to unlocking institutional capital. These include repossession rights, harmonised regulations, and transparent financial structures.
“Strong governance, independent investment committees, [and] fair cash flow waterfalls” are essential, he said. Without these, trade finance solutions may struggle to achieve full impact.
In addition, banks must evolve beyond traditional lending. Structured finance tools such as guarantees, letters of credit, and pre-delivery payment financing will play a central role. These instruments are critical for supporting aircraft acquisition and leasing expansion.
Currency risks also remain a challenge. Developing local currency solutions and liquidity facilities could reduce reliance on dollar funding. This would stabilise airline finances and improve long-term planning.
According to International Air Transport Association, sustainable aviation growth depends on improved financing access and cost efficiency. This aligns with Afreximbank’s strategy to integrate trade finance into aviation development..
Ultimately, Mobarak stressed that Africa’s aviation sector holds strong potential but lacks coordinated investment. Fragmentation, weak balance sheets, and institutional gaps continue to limit progress.
“Africa’s aviation sector has enormous potential, but historically it has not attracted large, coordinated investment,” he said.
Therefore, Afreximbank is pushing an Afrocentric model that combines local partnerships with global financial structures. If successful, trade finance pooling could transform African aviation into a scalable and investable sector.
In the long term, closing the leasing gap will not only modernise fleets but also strengthen trade connectivity. This would position aviation as a critical driver of Africa’s economic growth and integration.
