Transport experts have sounded an early warning that Zambia needs to urgently intervene and save the country’s air cargo sector to ensure that this sector remains viable and offers viable alternatives to attracting high end companies that specialize in products that need air cargo deliveries and movements.
According to statistics made available to the Zambian Business Times (ZBT) by Zambia Airports Corporation Limited ZACL Communications and Brand Manager Mweembe Sikaulu, cargo movement decreased by 7% in the third quarter of 2018 due to increased competition from the road sector that is less costly.
Sikaulu stated that the recent local currency (Kwacha movements) resulted in reduction on exports via air transport by about 15%. This in effect means a reduced cargo planes business from Lusaka. Roses are the most common export via cargo planes with the fruit and vegetables sector not well developed to deliver to international markets.
Zambia has aggressively invested in its road infrastructure and further announced plans to expand its rail network via pubic private partnerships for the North Western Railway to connect Zambia to Angola as well as develop the Zambia, Malawi, Mozambique and Tanzania railway interconnection railways, which are expected to further drive intra-regional cargo and trade.
Air cargo has one vulnerability that will have to be sorted out, the cost of Jet fuel in Zambia will need to be recalibrate to ensure that the final prices are regionally competitive. As Zambia imports all its crude and jet fuels, there is need that the country secures oil deals that can support the transport sector in times of international oil price instability.
A review of air cargo performance around frontier African countries show that Kenya for instance has expanded its cargo handling capacity at Jomo Kenyatta International airport owing to its expansive horticultural and fresh produce exporting base, which was estimated as close to USD1 billion in export values per annum in 2017.
For South Africa, the air cargo business is massive with the country having a strong export base of its wines, fresh fruit and vegetables as well as other perishables. The need for development of a perishables export base remains cardinal to the development and expansion of the air cargo industry. The same applies to other countries which have a growing air cargo sector such as Ghana and Nigeria, there is need for an export base and linkage into these global value chains.
According to IATA’s Director General and CEO Alexandre de Juniac in the 2017 annual report, air cargo had its strongest performance in Africa since the rebound from the global financial crisis in 2010. Demand across Africa grew by 9.0%. There has been an improvements in load factors, yields and revenues. Air cargo is still a very tough and competitive business, but the developments in 2017 were the most positive that we have seen in a very long time,
Zambia needs to critically review the performance of this sector as its continued decrease may indicate the need for the government to review the performance of related sectors and value chains. This review can be used to come up with policies and actions to stem the decline and develop an important export route that would contribute to economic diversification and generation of the much needed forex.
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