CONSCIOUS of the various funding challenges hindering the improvement of infrastructure capacity in Africa, President of the International Civil Aviation Organisation (ICAO), Dr. Olumuyiwa Bernard Aliu has said that the global aviation body is working with ACI and other stakeholders to assist States in securing resources and capacities to develop and modernize their aviation infrastructure.The ICAO President also said that the global aviation body is working hard to ensure there are “no constraints of infastructure capacity, technology and financial resources for aviation development. ”
Aliu who is keynote speaker at the 59th Airport Council International (ACI-Africa) Board and Regional Committee Meetings, Conference and Exhibition open Monday at the Oriental Hotel Lagos, however said there was difficulty hindering states and airport managers to mobilise adequate funding.
He said,”Our related goal is to ensure there are “no constraints of infastructure capacity, technology and financial resources for aviation development. ”
“It has become increasingly difficult however, for many States and airport operators to mobilize the significant and dependable funding and investments required for high quality aviation infrastructure.”
“The very limited volume of official development assistance (ODA) and South-South cooperation funding currently available for our sector’s infrastructure projects is a big part of this challenge, as are the constraints being faced with respect to public financing more generally.”
He also identified lack of legal and regulatory framework which makes it difficult for financial institutions to invest in airport projects in the continent.
“Another key concern is the risk associated with a lack of sufficient institutional, legal and regulatory enabling frameworks in many African States, something which makes it very difficult for financial institutions to invest in airport projects.”
According to him, there are five critical things that states and airport authorities must do to get financial investments in airports
He sad, “No investor wants to project out their proposed returns based on one eventuality, only to see those goal posts being moved by a government half
way through a project after they have made their financial commitment.”
“For States with limited access to investment finances, it is therefore critical to include major airport infrastructure needs in the priority list of
international public finance and assistance for development projects. ”
“The third priority in this list is for airport operators, in coordination with States, to clearly demonstrate where financing is required. This can be accomplished through gap-analyses of forecast demand, future capacity need and current infrastructure deficiencies.”
“A fourth important development objective for airports is in relation to how States and airport operators should design their associated operation
and projections in respect of ICAO policies on airport charges and taxation.”
“Revenues raised via passenger charges and taxes are often Significantly outweighed by what a State will lose out on in terms of more broad-based economic growth, largely as a result of the dampened demand for air travel and air cargo shipments which these charges lead to. It is therefore important to seek to complement aeronautical charges with a variety of non- aeronautical revenues.”
“The fifth and final priority in this area is that due focus must also be placed on investment in so-called ‘soft infrastructure’ such as human capacity development.
Financial investment and enhancements in human capacity are directly linked and completely dependent on each other over the longer term.”