Connect with us
Advertisement

$80 Billion African Aviation Market in the Spotlight


First-ever Aviation Africa to bring together world’s leading airlines, ministers and authorities including IATA, Rwandair, CAA Ghana, to discuss untapped market’s significant opportunities

Aviation Africa 2015 which opens on 10th May at Le Meridien Hotel, Dubai will underscore the immense potential of the African aviation market. The two-day event, held under the patronage of HH Sheikh Ahmed bin Saeed al Maktoum, President of Dubai’s Department of Civil Aviation and Chairman of Emirates Airline, has been established to forge a crucial dialogue among the aviation industry’s leading stakeholders on the social, economic and political benefits to be gained from wide-ranging improvements to the infrastructure in Africa.

Aviation in Africa currently supports more than 6.9 million jobs and over $800 billion in GDP across African nations. But this is nothing compared with what it can become. Annually, a further 155,000 jobs and $1.3 billion in GDP can be added through the effective liberalisation of just 12 key markets, including Ghana, Kenya and South Africa among others, according to an independent report published by the International Air Transport Association (IATA).

“If you look at the sheer potential of just a handful of African airlines, routes and airports, you realise just how enormous an impact Africa can have on the future of aviation, and moreover you can clearly see just how beneficial a progressive aviation industry can be for the socio-economic future of the continent,” says Alan Peaford MBE, event organiser and summit Chairman.

“Geographically, it’s ideally located right next to well-established hubs in the Gulf, and is able to capitalise on the passenger and cargo traffic already streaming through the region.

“Aviation Africa 2015 will fill a void in the aviation calendar and give Africa a real chance to progress quickly, effectively and safely,” he adds.

Africa’s prospective growth, as well as the potentially vital role the Middle East’s aviation industry can play in the creation of a burgeoning African market will be the focal point of the various case studies and panels at Aviation Africa 2015.

Hon. Dzifa Aku Attivor, Minister of Transport for Ghana, will present the Keynote Address. The Ghanian transport minister is one in a long list of top-level industry speakers, delegates and experts who will share ideas and experiences with their Middle Eastern counterparts to bring Africa’s inevitably pivotal role in the future of aviation front and centre.

“There are many striking similarities between the Middle Eastern aviation market of 20 years ago and the African market of today,” says Alan Peaford

“The many experiences Gulf carriers, airports and regulators underwent as they grew to become the centre-ground of the global aviation space are bound to be similar to the issues that will arise in Africa as the continent’s nations begin to put their efforts and resources behind their aviation industry. Africa would do well to discuss, listen and learn from their Middle Eastern counterparts,” Peaford adds.

Discussing the role of the regulators at Aviation Africa 2015 will be Laila Ali Hareb Al Muhairi, Assistant Director General for Strategy and International Affairs, of the UAE’s civil aviation authority (the GCAA), Dr Hamdi Chaouk, former director general for aviation in Lebanon; Abdulai Alhassan, director general, Ghana Civil Aviation Authority and Mohamed Rahma, Undersecretary for international affairs, Egypt.

Speakers confirmed from African and Middle East airlines already include Girma Wake, chairman, RwandAir (formerly CEO, Ethiopian Airlines); Yves Naninque, CCO ECAir; Many other CEOs and COOs are attending including Africa’s leading cargo operator Astral Aviation, South African Airlines and Daallo Airlines. 

One session of particular note will see Ed Winter, CEO of Fastjet – Tanzania’s low cost carrier which has been enjoying great success since its launch in 2011 – he is on a panel with Air Arabia’s group chief executive, Adel Ali, exploring the impact LCCs have had on the aviation industry in the region.

Alan Peaford, said: “We are really pleased with the support we are getting from the industry across all levels of government, as well as airlines of all shapes and sizes.

“This is going to be a great networking event and an intriguing summit. Of course there is a frisson between many African carriers and the local airlines in the Middle East but it wasn’t that long ago that the likes of Emirates and Qatar Airways were in the same position as the African carriers are now and they have found many different ways around global and regional challenges,” Peaford says.

“It’s really exciting to see some of the new and smaller carriers represented at the event. There is a great hunger for the knowledge that will get this growth challenge right.”

Dr Nicklas Dahlstrom, human factors manager, Emirates Airline, will be discussing the challenges of multi-cultural workforces and the threat to safety of human performance.

There are also senior figures from aviation authorities and associations, who include Hussein Dabbas, VP Africa & Middle East, IATA; Tawanda Gusha, Director Airports, Civil Aviation Authority, Zimbabwe and Paul Murphy, vice president, Africa, SITA.

The event also features an exhibition with over 40 companies including Boeing, Jeppesen, African Open Sky, Ethiopian Airlines and Astral Aviation.  The event is supported by AFRAA – African Airlines Association, AfBAA – African Business Aviation Association and the Gold Sponsors are UAE International Trip Support and DAE – Dubai Aerospace Enterprise. 

Distributed by APO (African Press Organization) on behalf of Aviation Africa 2015.

Continue Reading

Business

New study reveals why youth entrepreneurs are failing

21st July 2022
Youth

The recent study on youth entrepreneurship in Botswana has identified difficult access to funding, land, machinery, lack of entrepreneurial mindset and proper training as serious challenges that continue to hamper youth entrepreneurship development in this country.

The study conducted by Alliance for African Partnership (AAP) in collaboration with University of Botswana has confirmed that despite the government and private sector multi-billion pula entrepreneurship development initiatives, many young people in Botswana continue to fail to grow their businesses into sustainable and successful companies that can help reduce unemployment.

University of Botswana researchers Gaofetege Ganamotse and Rudolph Boy who compiled findings in the 2022 study report for Botswana stated that as part of the study interviews were conducted with successful youth entrepreneurs to understand their critical success factors.

According to the researchers other participants were community leaders, business mentors, Ministry of Trade and Industry, Ministry of Youth, Gender, Sport and Culture, financial institutions, higher education institutions, non-governmental institutions, policymakers, private organizations, and support structures such as legal and technical experts and accountants who were interviewed to understand how they facilitate successful youth entrepreneurship.

The researchers said they found that although Botswana government is perceived as the most supportive to businesses when compared to other governments in sub-Saharan Africa, youth entrepreneurs still face challenges when accessing government funding. “Several finance-related challenges were identified by youth entrepreneurs. Some respondents lamented the lack of access to start-up finance, whereas others mentioned lack of access to infrastructure.”

The researchers stated that in Botswana entrepreneurship is not yet perceived as a field or career of choice by many youth “Participants in the study emphasized that the many youth are more of necessity entrepreneurs, seeing business venturing as a “fall back. Other facilitators mentioned that some youth do not display creativity, mind-blowing innovative solutions, and business management skills. Some youth entrepreneurs like to take shortcuts like selling sweets or muffins.”

According to the researchers, some of the youth do not display perseverance when they are faced with adversity in business. “Young people lack of an entrepreneurial mindset is a common challenge among youth in business. Some have a mindset focused on free services, handouts, and rapid gains. They want overnight success. As such, they give up easily when faced with challenges. On the other hand, some participants argue that they may opt for quick wins because they do not have access to any land, machinery, offices, and vehicles.”

The researchers stated that most youth involved in business ventures do not have the necessary training or skills to maintain a business. “Poor financial management has also been cited as one of the challenges for youth entrepreneurs, such as using profit for personal reasons rather than investing in the business. Also some are not being able to separate their livelihood from their businesses.

Lastly, youth entrepreneurs reported a lack of experience as one of the challenges. For example, the experience of running a business with projections, sticking to the projections, having an accounting system, maintaining a clean and clear billing system, and sound administration system.”

According to the researchers, the participants in the study emphasized that there is fragmentation within the entrepreneurial ecosystem, whereby there is replication of business activities without any differentiation. “There is no integration of the ecosystem players. As such, they end up with duplicate programs targeting the same objectives. The financial sector recommended that there is a need for an intermediary body that will bring all the ecosystem actors together and serve as a “one-stop shop” for entrepreneurs and build mentorship programs that accommodate the business lifecycle from inception to growth.”

Continue Reading

Business

BHC yearend financial results impressive

18th July 2022
BHC

Botswana Housing Corporation (BHC) is said to have recorded an operating surplus of P61 Million, an improvement compared to the previous year. The housing, office and other building needs giant met with stakeholders recently to share how the business has been.

The P61 million is a significant increase against the P6 million operating loss realized in the prior year. Profit before income tax also increased significantly from P2 million in the prior year to P72 million which resulted in an overall increase in surplus after tax from P1 million prior year to P64 million for the year under review.

Chief of Finance Officer, Diratsagae Kgamanyane disclosed; “This growth in surplus was driven mainly by rental revenue that increased by 15% from P209 million to P240 million and reduction in expenditure from P272 million to P214 million on the back of cost containment.”
He further stated that sales of high margin investment properties also contributed significantly to the growth in surplus as well as impairment reversals on receivables amounting to P25 million.

It is said that the Corporation recorded a total revenue of P702 million, an 8% decrease when compared to the P760 million recorded in the prior year. “Sales revenue which is one of the major revenue streams returned impressive margins, contributing to the overall growth in the gross margin,” added Kgamanyane.

He further stated professional fees revenue line declined significantly by 64% to P5 million from P14 million in the prior year which attributed to suspension of planned projects by their clients due to Covid-19 pandemic. “Facilities Management revenue decreased by P 24 million from P69 million recorded in prior year to P45 million due to reduction in projects,” Kgamanyane said.

The Corporation’s strength is on its investment properties portfolio that stood at P1.4 billion at the end of the reporting period. “The Corporation continues its strategy to diversify revenue streams despite both facilities management income and professional fees being challenged by the prevailing economic conditions that have seen its major clients curtailing spending,” added the CEO.

On the one hand, the Corporation’s Strategic Performance which intended to build 12 300 houses by 2023 has so far managed to build 4 830 houses under their SHHA funding scheme, 1 240 houses for commercial or external use which includes use by government and 1 970 houses to rent to individuals.

BHC Acting CEO Pascaline Sefawe noted that; BHC’s planned projects are said to include building 336 flat units in Gaborone Block 7 at approximately P224 million, 100 units in Maun at approximately P78 million, 13 units in Phakalane at approximately P26 million, 212 units in Kazungula at approximately P160 million, 96 units at approximately P42 million in Francistown and 84 units at approximately P61 million in Letlhakane. Emphasing; “People tend to accuse us of only building houses in Gaborone, so here we are, including other areas in our planned projects.”

Continue Reading

Business

Commercial banks to cash big on high interest rates on loans

18th July 2022
Commercial-banks

Researchers from some government owned regulatory institutions in the financial sector have projected that the banking sector’s profitability could increase, following Bank of Botswana Monetary Policy Committee recent decision to increase monetary policy rate.

In its bid to manage inflation, Bank of Botswana Monetary Policy Committee last month increased monetary policy rate by 0.50 percent from 1.65 percent to 2.15 percent, a development which resulted with commercial banking sector increasing interest rate in lending to household and companies. As a result of BoB adjustment of Monetary Policy Rate, from 1.65 percent to 2.15 percent commercial banks increased prime lending rate from 5.76 percent to 6.26 percent.

Researchers from Bank of Botswana, the Non-Bank Financial Institutions Regulatory Authority, the Financial Intelligence Agency and the Botswana Stock Exchange indicated that due to prospects of high inflation during the second half of 2022, there is a possibility that the Monetary Policy Committee could further increase monetary policy rate in the next meeting in August 25 2022.

Inflation rose from 9.6 percent in April 2022 to 11.9 percent in May 2022, remaining above the Bank of Botswana medium-term objective range of 3 – 6 percent. According to the researchers inflation could increase further and remain high due to factors that include: the potential increase in international commodity prices beyond current forecasts, logistical constraints due to lags in production, the economic and price effects of the ongoing Russia- Ukraine conflict, uncertain COVID-19 profile, domestic risk factors relating to possible regular annual administered price adjustments, short-term unintended consequences of import restrictions resulting with shortages in supplies leading to price increases, as well as second-round effects of the recent increases in administered prices “Furthermore, the likelihood of further increases in domestic fuel prices in response to persistent high international oil prices could add upward pressure to inflation,” said the researchers.

The researchers indicated that Bank of Botswana could be forced to further increase monetary policy rate from the current 2.15 percent if inflation rises persistently. “Should inflation rise persistently this could necessitate an upward adjustment in the policy rate. It is against this background that the interest rate scenario assumes a 1.5 percentage points (moderate scenario) and 2.25 percentage points (severe scenario) upward adjustment in the policy rate,” said the researchers.

The researchers indicated that while any upward adjustment on BoB monetary policy rate and commercial banks prime lending rate result with increase in the cost of borrowing for household and compnies, it increase profitability for the banking sector. “Increases in the policy rate are associated with an overall increase in bank profitability, with resultant increases in the capital adequacy ratio of 0.1 percentage points and 0.2 percentage points for the moderate and severe scenarios, respectively,” said the researchers who added that upward adjustment in monetary policy rate would raise extra capital for the banking sector.

“The increase in profit generally reflects the banking industry’s positive interest rate gap, where interest earning assets exceed interest earning liabilities maturing in the next twelve months. Therefore, an increase of 1.5 percentage points in the policy rate would result in industry gains of P71.7 million (4.1 percent increase), while a 2.25 percentage points increase would lead to a gain of P173.9 million (6.1 percent increase), dominated by large banks,” said the researchers.

Continue Reading
Weekend Post