Keyamo Calls For New Aviation Financing Solutions Across Africa

By Olumide Johnson

Speaking on the sidelines of the inaugural African Air Transport Conference in Lomé, Togo, Festus Keyamo, Minister of Aviation and Aerospace Development, identified access to affordable financing and fleet renewal as the most significant challenge facing Africa’s aviation industry. Addressing policymakers and industry stakeholders, he argued that African airlines remain disadvantaged by borrowing costs that can reach about 30 percent, compared with financing rates of three to six percent available to operators in more developed aviation markets. He called for stronger continent-led financing solutions and welcomed ongoing intervention efforts by the African Development Bank and African Export-Import Bank.

DECISION HIGHLIGHT

Keyamo’s intervention reframes Africa’s aviation challenge from a demand problem to a capital access problem, suggesting that financing structures, rather than passenger traffic, are the principal constraint on sector growth.

DECISION MEMO

The significance of Keyamo’s assessment lies in its focus on the economics of fleet acquisition rather than operational inefficiencies.

For decades, discussions around African aviation have centred on connectivity gaps, regulatory barriers and infrastructure deficits. His argument shifts attention to the financing architecture underpinning airline competitiveness. Without access to affordable capital, airlines struggle to acquire modern aircraft, lower operating costs and compete effectively on international routes.

As Keyamo stated: “The real problem of Africa is fleet renewal, access to financing. That’s the real problem of Africa.”

His comparison of financing costs highlights the scale of the disadvantage. “Other parts of the world are getting aircraft and financing their aircraft fleet at three percent, five percent or six percent. Our banks here are giving us 30 percent and we want to compete in the same market. It’s not possible.”

The consequence is a persistent dependence on ageing aircraft transferred from more profitable markets after their prime operating years. According to Keyamo, “Most of the aircraft that come to Africa are old aircraft. We all complain about them, but the issues are deeper than a minister simply saying don’t bring this aircraft.”

The broader implication is that aviation competitiveness in Africa may depend less on regulation and more on creating specialised financing mechanisms capable of reducing capital costs. His support for intervention by the African Development Bank and African Export-Import Bank suggests that multilateral finance may become increasingly important in addressing this structural gap.

DATA BOX

• Event: African Air Transport Conference
• Location: Lomé, Togo
• Key challenge identified: Fleet renewal and access to financing
• Aircraft financing rates in developed markets: 3 percent to 6 percent
• Typical borrowing costs cited for African operators: About 30 percent
• Supporting institutions highlighted: African Development Bank and African Export-Import Bank
• Sector condition: Strong travel demand but constrained fleet modernisation

WHO WINS / WHO LOSES

Winners

• Airlines that secure access to lower-cost financing.
• Aircraft leasing and aviation finance institutions.
• Passengers benefiting from improved fleet quality and connectivity.
• Development finance institutions supporting aviation modernisation.

Losers

• Airlines dependent on high-cost commercial borrowing.
• Operators unable to renew ageing fleets.
• Markets with limited aviation financing infrastructure.

POLICY SIGNALS

• Aviation financing is emerging as a strategic policy priority.
• Governments may increasingly seek multilateral solutions to fleet modernisation challenges.
• Aviation development discussions are shifting towards capital market solutions.
• Regional institutions are expected to play a larger role in sector financing.

INVESTOR SIGNAL

The financing gap creates opportunities for aircraft leasing companies, aviation-focused funds, export credit agencies and development finance institutions. Any successful mechanism that lowers capital costs could unlock fleet renewal, route expansion and stronger profitability across African aviation markets.

RISK RADAR

• High domestic interest rates continue to undermine fleet acquisition economics.
• Currency volatility may increase repayment burdens on foreign-denominated aircraft financing.
• Delayed fleet renewal could weaken operational efficiency and competitiveness.
• Dependence on external lessors may limit strategic flexibility for African carriers.
• Demand growth may outpace fleet modernisation, creating capacity constraints.