China's Influence In African Aviation

Airports & Airlines
Nick Cummins
min read
March 5, 2021

Chinese President Xi Jinping and foreign leaders attending the Beijing Summit of the Forum on China-Africa Cooperation (FOCAC) head for the venue of the summit's opening ceremony at the Great Hall of the People in Beijing, capital of China, Sept. 3, 2018. (Xinhua/Pang Xinglei)

If you are involved in aviation in Africa, or any other major international industry for that matter, then you know about the rise of Chinese investment. The powerful Asian nation has been flexing its diplomatic muscle, not through military might but rather economically through its Belt and Road Initiative. China sees Africa, the oldest continent on earth, as key to becoming the leader of the world for the next century. When it comes to aviation. China has been prolific with investment across the African region to the point, in some cases, of single-handly financing huge projects. Where has China invested in African aviation and what does it mean? Let's explore

Why is China Interested in Africa?

First, we will discuss why China is interested in Africa, and then why Africa, as a whole, needs support from the dragon of the East. As this is rather a political issue, this article will remain as neutral as possible.

China is growing, and this growth needs raw resources and materials to maintain the quality of life of its 700 million middle-class citizens. Africa is the most resource-rich region in the world and despite being 'harvested' by other colonial powers for hundreds of years, is still untapped. Thus if China can secure mutually beneficial trade routes with resource-rich nations, it can essentially secure its future. And if China can do so as part of its political game with the West and get an upper hand, then more credit to them.

Does Africa Need Investment?

There are two major reasons why Africa aviation needs investment, either from China or from somewhere else.

First, Africa is heavily divided between countries with radical ideologies, cultures, and languages. This has prevented a single unified aviation space like North America or Europe from coming to fruition (although many have tried). China has stepped in to offer its expertise with policing large aviation spaces and provide the necessary technology to do so.

Second, African aviation has very high fixed costs. Unlike Europe with its close cities and existing infrastructure where it is easy for a small nation to operate its own fleet of modern aircraft, or a private airline to get started, African ventures need to bring everything from other continents. In fact, even engine MRO needs to be performed as far away as Britain for some carriers, resulting in costly empty maintenance flights with multiple stops. China has thus begun a "China-Africa regional aviation cooperation plan" to encourage as many joint-ventures as possible to fix these problems.

"Study supportive measures, provide necessary policy and capital support and build better conditions and platforms for business cooperation"

 Ministry of Commerce for the Peoples Republic of China.

For local shareholders, the introduction of a country like China with its vast wealth is welcomed, as it has greatly reduced the risk they face with solo investing in the local aviation market. Speaking of investments...

Where Have They Invested?

There are several major types of investments that China has made in Africa's aviation space, but not all of them are equal. China has primarily been involved in the construction of airports throughout the continent, as well as airline operations (through Chinese flag carriers) and some joint ventures (although this last category is growing).

Between US$27 billion and US$38 billion are currently being spent on or earmarked for spending on 77 construction and associated hardware projects at airports in Africa. China was named concerning Angola, Ethiopia, Kenya, Nigeria, Rwanda, Senegal, and Zambia. The average price for all projects was US$440 million. - The Conversation report on investments in Airports in Africa

Of the total US$38 billion spent, China is estimated to be involved with around one-third of all these airport projects. Some include:

  • Luanda (Angola) - $3.8 billion
  • Maputo - $615 million
  • Zambia airport projects - $360 million
  • Addis Ababa International Airport - $345 million
  • Mauritius - $260 million
  • Sierra Leone - $190 million
  • Mauritania - $136 million

These figures don't include Chinese bank loans for a new airport in Ethiopia for US$3 billion, or Sudan for US$1.4 billion. And many other investments too small to count.

Ethiopia has benefited hugely by having an early and positive relationship with China. Currently, Ethiopia operates nearly 50 cargo flights between China and its hub in Addis Ababa, and formed one of the essential links to bring medical supplies to Africa during the coronavirus crisis.

"We have been in China since 1973, so close to half a century. We're among the very senior operators in China. We have also gained a position ourselves in the right strategic position when China started to invest in Africa heavily, especially in infrastructure. So that has created a very significant passenger air cargo traffic between China and Africa"

Ethiopian Airlines, Group CEO, Tewolde GebreMariam to CAPA

Other Ways of Investing in Africa

Away from direct project involvement, there are several other ways China has shown its influence. For one, any partnered country can count on the goodwill of the Civil Aviation Administration of China (equivalent to the USA FAA) to quickly approve any lucrative revenue routes for its flag carrier to China - well before a rival airline from a competitive state. A unique advantage few airlines would give up, and something that could make or break an airline's attempt to operate to Asia.

Plus, it is not just cargo and trade that benefits from a close relationship with China, but tourism too. China has roughly 135 million international tourists that spread over the globe each year, and in 2019 China added upwards of 19 African states to its list of approved tourist destinations. A lucrative source of revenue.

China can also help airlines with poor credit secure new aircraft - be it western made (Airbus and Boeing) or from China itself (it's own COMAC series of aircraft) at very attractive lease rates. Speaking of its own aircraft, China has also suggested that it will offer free training and spare parts for new aircraft, to save face if anything were to go wrong with its exported designs (and hence avoiding the problems with Interjet and its Russian-made Superjet 100s). Overall, this means that a state carrier with a few handshakes can find itself operating the same aircraft as a European carrier or using Chinese-made planes with no risk to its bottom line.

In 2021, China sent its top diplomat, State Councilor, and Foreign Minister Wang Yi, on a five-nation tour of Africa, taking in Nigeria, the Democratic Republic of Congo, Botswana, Tanzania, and Seychelles. On this diplomatic mission, he signed several trade agreements to open up new African markets to China and recommit to several infrastructure projects - particularly in Nigeria (one of the largest aviation markets in the world) and Tanzania.

In addition, it was to garner support for the upcoming Forum of China-African Cooperation. This year, the summit with a focus on “three priority areas of vaccine cooperation, economic recovery, and transformative development." It is the latter that is of the most interest to the aviation industry, which judging by the previous action plan (listed below) will greatly benefit regional areas and help new African airlines.

"[China will] provide regional aircraft for civilian use, train aviation professionals for Africa, provide capacity building to enable compliance with ICAO standards and recommended practices and support Chinese companies in setting up joint ventures with African airlines and African businesses and participating in the building of airports and other auxiliary infrastructure to advance Africa's regional aviation"  

China-Africa Cooperation Beijing Action Plan (2019-2021)

Strings Attached?

One of the problems with this Chinese investment is that it's not equal across the continent. China is cherry-picking projects that it sees will benefit its country and its growth the most, leaving some areas (especially those high in population and low in raw elements) without recourse. This is leading to a continent with several strong aviation hubs centered around trade with China, with other nations missing out.

"Many of these investments are offered as loans to these nation-states. Loans that some might struggle to pay and could generate a loss of control on their own infrastructures. However, China insists that this isn't a risk and seems to have made moves to squash this rumor. In 2021, Foreign Minister Wang Yi on his diplomatic mission to the region signed "debt service suspension agreements with twelve African countries and provided waivers of matured interest-free loan for another fifteen on his trip"

Plus, China has become deeply integrated with some African nations, offering a lifeline of support, financing, and business through its routes. If the government wanted to read adjust the board, China could delay approvals or pull support from one to another country to get the best deal possible. An unthinkable scenario, but something to be aware of nonetheless. Some African countries in negotiation have been courting investment from other sources such as the World Bank in order to leverage a better deal.

The rise of China

A new age is coming for nations in Africa, and it may seem that China is approaching them with no-strings partnerships that will make Africa become the greatest aviation market in the world.

But those who do partner up with the nation need to keep in mind that what China does, it does for China. No matter how great a shiny new airport is or a lucrative route to Asia, it could be a risky proposition. African nations will need to negotiate a fair agreement, one that takes into account the general public best interest. For many, however, the offer of interest-free loans and expert support is something too good to pass up - especially at the price China is offering.

"If you want to do large-scale construction you either turn to a western firm or to a Chinese firm, but the Chinese firm is always able to undercut [the price]" says Daan Roggeveen, the founder of MORE Architecture and author of many works on urbanization in China and Africa to Forbes.

Nick Cummins
Copywriter - Aviation Journalist
Journalist - Working in news media for over a decade with outlets including 9News and the Discovery Channel, Nick is an airline marketing specialist with a Masters level education. Working closely with AirAsia, Virgin Australia, Turkish Airlines and others, Nick provides unique insight and analysis on a variety of aviation topics. Based in Sydney, Australia.

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