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Nigeria needs huge investment in tourism to benefit from SAATM

AFRICA has the smallest number of air passengers, accounting for roughly 2 percent of global passenger and freight traffic. That small number is predominantly driven by international tourism – which is the number one determinant of who leads the air travel business to/from in the continent.

However, with Africa’s rapid population growth and improving incomes, the continent is projected to lead the near doubling of global air travelers to 7.2 billion by 2035, according to IATA.

Taping into the growth requires huge investments in travels and tourism – that presently drive air travels in Africa, infrastructure development and general security improvements.

Four countries have a distant lead as tourist destinations in Africa and they also account for the largest shares of air passenger traffic in the continent.

The leading countries are Morocco, Egypt, South Africa and Tunisia. The same countries are the four with the highest passenger numbers, according to World Bank’s data for 2019.

South Africa is ahead with 25.6 million in air passengers carried in 2019. Egypt and Ethiopia follow with roughly 13 million and 12.6 million passengers in the same year respectively. Morocco ranks 4th in the continent with 9.4 million passengers.

The gap between the market leaders and the rest of the countries is quite significant. This reflects the extent countries are able to connect tourism to air travels.

The strengths of Africa’s leading airlines is built on a combination of air passenger and tourism numbers. Ethiopian Airline’s leading market share reflects the significant contribution of travel and tourism to GDP – at 9 percent in 2019. The country’s government’s policy places priority on tourism as its strategic tool to combat poverty and encourage economic growth.

Travel and tourism contributed 8.7 percent to South Africa’s GDP in 2019 or $33.3 billion in real terms, growing at an average annual rate of 1.2 percent. Tourism is reported to have outperformed other key industries in South Africa in terms of job creation in a five-year period to 2016. It created a higher number of jobs than key industries such as trade and utilities – electricity, gas and water.

In Morocco, tourism constitutes a fundamental pillar in the country’s economy in terms of income generation, job creation and positive impacts on the image of the country. Direct and indirect contribution of travel and tourism to GDP is estimated at 18.9 percent in 2019.

The industry employs more than 2.5 million people directly and indirectly, representing 25 percent of the total Moroccan workforce. Tourism is considered the country’s development accelerator and the critical factor for reducing income inequalities between regions.

The travel and tourism industry in Egypt is one of the country’s leading economic sectors, though struggling towards recovery from Covid-19 impact. The country aims to establish itself as a world leader in antiquities tourism alongside the development of traditional sun-and-sea offerings.

In 2019, the industry contributed $30.6 billion to GDP, representing 9.3 percent of total.

The country is trying to draw leisure tourists once again with the construction of Capital International Airport, the opening of new flight routes to connect resorts and archaeological sites.

Tunisia is one of the most visited countries in Africa and has retained the status of an attractive destination for tourists since the beginning of the 1960s. The country plans to rebuild its tourism industry in the post Coronavirus era to push its contribution to GDP from 8 percent in 2021 to 16 percent by 2025.

Nigeria is among the 23 African countries that adopted the Single African Air Transport Market (SAATM) in 2015. This effectively lifts restrictions to open skies and creates a unified air transport market in Africa, according to the Yamoussoukro decision.

Nigeria however needs to build the needed capacity to be able to benefit from the opportunities arising from SAATM. It has to find the $250 million earmarked by the aviation ministry to establish a national carrier.

The nation also needs to mobilize a lot in new money for development, upgrade and rehabilitation of aviation infrastructures and systems. The projected massive growth in air passengers worldwide isn’t going to happen with the present state of infrastructures neither will it depend on existing technology.

The 2018 Global Passenger Survey reveals that air passengers in the coming years will consist a different breed – craving for more control, information and improved efficiency when they travel.

Beyond the establishment of a national carrier, Nigeria needs to invest heavily in building new technology on which the air travels of the future is to run.

Nigeria’s tourism industry faces new challenges of security and safety concerns in addition to the lingering issues of poor infrastructures. Tourism has been duly recognized as a priority industry under the Economic Growth and Recovery Plan of the Federal Government but the environment for appropriate action continues to elude the nation.

By international tourist arrivals, Nigeria isn’t among top 10 leading destinations in Africa. For the nation to share in the projected boom in air travels over the next 10 to 15 years, it needs a strategic plan of action through robust infrastructure development and security problem resolutions to launch itself into top 5 international tourist destinations in Africa.

It has the potentials in terms of its diverse landscape, natural scenery and many historic places explored and yet to be explored.

 By Mike Uzor, Head, Finance & Strategy at Copterjet International

About NigerianFlightDeck

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Nigerianflightdeck is an online news and magazine platform reporting business stories with a bias for aviation and travel. It is borne out of the intention to inform, educate as well as alter perceptions with balanced reportage.

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