East Africa Rising Like A Phoenix

While global economies had a tough time in 2016, Africa comparatively fared well. Much of the continent’s growth was however, driven by East Africa. Riding on this positive growth rate, the regional as well as foreign air cargo industry players have intensified their competition, as each positions itself to dominate the most lucrative routes from the region.

- Shreya Bhattacharya

Africa has proven on more than one occasion that it can rise from the ashes. The continent’s ability to rebound its growth rate, while other regions struggled to pull out of the economic slowdown last year has restored its reputation as the land of opportunities for business and investment.

According to Ernst & Young’s Attractiveness Programme Africa May 2017, Africa’s growth will improve off 2016 – the worst year for the continent in nearly 20 years. The report mentions that the low growth was largely driven by external factors, particularly oil prices as well as domestic insurgency in some regions. The report also acknowledged the criticality of commodity prices and political upheavals that affected many economies in the continent. However, it points out, “East Africa remains the most buoyant of all, with the four key economies (Kenya, Ethiopia, Tanzania, and Uganda) all poised for growth of above 6 percent for the rest of the decade.” This, according to many experts, can be attributed to favourable fiscal policies in the region, infrastructure projects, robust private sector consumption and oil import by East African countries such as Kenya, Rwanda, and Tanzania.

While the sub-region is on a growth trajectory, a well-developed aviation industry would only pace up the development by boosting international and intra-Africa trade. The correlation between infrastructure development and economic growth is well documented. Riding on the positive growth rate, the regional airlines have also intensified their competition, as each positions itself to dominate the most lucrative routes.