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1. Air Cargo In Emerging Africa Ram C Menen Divisional Senior Vice President Cargo Nairobi 22ND February 2011 skycargo.com

2. Africa TradeRepresentation of extremes – dominated by diverse natural resources • Agricultural products (flowers, fruits & vegetables) & seafood (fresh fish) are the trade mainstay for most developing countries • Majority of African countries are underdeveloped and rely heavily on foreign aids to survive • Trade varies from one country to another (Countries such as South Africa represent the higher side of the spectrum whereas regions such as Burundi have the least trade volumes)

3. Africa GDP 4.9 4.1 3.3 5.3 5.0 5.2 3.5 5.2 2.0 5.0 5.2 6.8 4.7 5.2 6.0 5.8 4.0 10.5 2.8 6.0 6.4 6.5 5.9 7.0 4.1 8.3 4.1 3.1 3.0 Source;of data: Wikipedia

4. East Africa Main Countries • Kenya, Ethiopia, Tanzania & Uganda are the countries with tremendous air cargo potential. Main Products • Exports of horticultural products dominate in this region. • Kenya (meat, fish, flowers, fruits), Ethiopia (flowers) Uganda (fish, fruits & flowers). • Imports tend to be more of infrastructure development equipment Positives • Continued infrastructure development, especially in the field of agriculture and telecom , is providing a good growth environment Challenges • Poor RFS Infrastructure. • Goods (perishables) are trucked from rural areas in open trucks exposing items to spoilage & adding delivery timing risks.

5. West Africa Main Countries • Nigeria, Ghana, Guinea, Senegal, Mauritania and Mali predominantly all have high imports. Main Products • Imports - Nigeria (oil & drilling equipment), Ivory Coast (mining). • Exports - Ghana (fruits), Senegal & Mauritania (fish). Positives • Investment in African resources sector covering varied mining projects along with oil & gas exploration/excavation has led to booming trade & air cargo opportunities. Challenges • Port inefficiency & congestion at West African ports are opportunities for air cargo. • Poor RFS infrastructure mainly in land locked Mauritania & Mali. • Volatile nature of West African politics/unrest in Cote d’Ivoire. • Insecurity & pilferage at West African airports.

6. North Africa Main Countries • Egypt, Libya, Morocco, Tunisia & Algeria predominantly all have high imports. Main Products • Morocco / Egypt/ Tunisia have fresh produce exports and Egypt remains the biggest exporter of fruits/vegetables. Positives • Northern African countries, Europe’s principal trading partners, maintain strong economic ties with EU, fueling trade demand. • Good RFS infrastructure & development. Challenges • Security and embargo have adversely affected countries like Libya and Algiers. • Air trade often competes with slower but price competitive surface transport modes. • Political unrest & regulatory issues are a constraint/barrier to air cargo growth.

7. Southern Africa Main Countries •Angola, South Africa, Namibia, Botswana and Zambia. • South Africa functions as a manufacturing & trading hub for the entire African continent. • Southern African trade is dominated by Botswana and South Africa, who are the two biggest exporting countries in Africa. Main Products • South Africa is the world’s biggest producer of gold/diamonds & has a healthy product cargo mix from machinery to perishables. • Namibia (Fish), Mozambique & Madagascar (Fruits). Positives • Most of Southern Africa have a large pool of skilled labour, advanced infrastructure and developed financial resources. • Good RFS infrastructure & development. Challenges • Security although improved is still an area of concern.

8. Central Africa Main Countries •Chad, Cameroon, Central African Republic (CAR). Main Products • Limited export opportunities… imports include large volumes of food, textiles, petroleum products, machinery, electrical equipment, motor vehicles, chemicals & pharmaceuticals via air. Positives • Increasing demand for consumer goods and household items Challenges • Important constraints to economic development include the CAR's landlocked position, a poor transportation system, a largely unskilled work force & a legacy of misdirected macroeconomic policies. • Factional fighting between the government and its opponents remains a drag on economic revitalization.

9. The Forecast Is Bright Source; Boeing WACF 2010-11

10. Intra-Africa • Poor road infrastructure coupled with safety and security of cargo mean that it is probably faster/cheaper to use air to inland destinations • Air cargo is often the most secure and reliable mode in domestic Africa especially to land-locked countries.

11. Challenges Physical infrastructure Reduction of FDI due to political instability Inadequate transportation networks Lack of government transparency Administrative & regulatory constraints Lack of security Lack of skilled labour & business knowledge Out-dated technology

12. Africa Economic Outlook Fertile ground for new investment and business development GDP Growth averaged 4.9% (2004-2009) due to: Strong commodity prices Higher Asian interest (in terms of trade and investment) FDI - rising external inflows, both in terms of capital and investment.  Rising fiscal spending

13. These challenges can all be positives • The legacy is going to be replaced with • everything new and modern • Africa is able to leapfrog technology

14. Political Situation And This, Ladies and Gentlemen Is Where The Opportunities Are!! Thank You

15. And This, Ladies and Gentlemen Is Where The Opportunities Are!! ………Is Where The Opportunities Are!!