The configuration of Africa’s aviation sector is headed for a significant shake-up, following the announcement by Ethiopia of plans to build the largest airport on the continent.
Superambitious Ethiopia, which has caused ripples on the continent with megaprojects in the infrastructure arena, has revealed plans to invest a staggering $4-billion in a new mega- airport in the capital city, Addis Ababa.
The new airport, which will have a capacity of 120-million passengers a year, will be the biggest in Africa and will make the Horn of Africa nation the aviation hub of Africa.
The planned airport will be one of Ethiopia’s most ambitious projects, surpassed only by the $4,8-billion Grand Renaissance dam, and demonstrates Ethiopia’s commitment to ‘State-led’ development through investments in huge infrastructure projects.
“The new megahub will move the aviation industry in Ethiopia to a higher level. It will make Addis Ababa the aviation hub of Africa,” says Ethiopian Transport Minister Workneh Gebeyehu.
He adds that a feasibility study conducted by French consultancy ADPI has given the Ethiopian government the confidence to invest in the facility, as it will substantially boost the tourism and manufacturing sectors, besides making the country an aviation hub.
ADPI has proposed three sites for the new airport, which will have four runways and several passenger terminals, and will be built in phases over a ten-year period. The three sites are located 60 km to 100 km from the capital.
The new airport, which will be known as Addis Ababa International Airport, will greatly enhance Ethiopia’s competitive advantage in Africa’s aviation sector.
Already, Ethiopia is investing $350-million in an expansion programme at Bole International Airport to increase its capacity from six-million to 22-million passengers a year by 2018.
The country’s national carrier, Ethiopian Airlines, is also engaged in an ambitious expansion drive aimed at doubling its size by 2025. The airline, which was the first on the continent to acquire a Boeing 787 Dreamliner, also made history recently when it became the first airline in Africa to place an order for Airbus’s A350-900 aircraft. This year, the airline reported record a profit of $175-million, at a time when other airlines in Africa, such as Kenya Airways and South African Airways, are struggling to remain afloat.
Although Ethiopia is determined to start construction of the new airport in 2016, a new report by consulting firm PGI Intelligence contends the projects face the risk of delays due to potential challenges in securing finance, while the huge costs could exacerbate foreign exchange shortages.
“Without an immediate demand for the new airport, Ethiopian officials may struggle to secure finance from foreign lenders at concessionary rates,” states the report.
It adds that, owing to a heavy reliance on domestic resources to finance huge projects, Ethiopia has over the past five years been experiencing huge liquidity problems, which have led to delays in imports and made it difficult for the private sector to access finance.
Despite the concerns, Ethiopia is determined to implement the project to boost the tourism and manufacturing sectors and sustain its fast- growing economy, which is expanding at an average of 7% a year, according to the International Monetary Fund.