By Kaleyesus Bekele
The economic impacts of the COVID-19 pandemic in Ethiopia – in regards to the airline industry and allied businesses – could cost the country some USD 1.2 billion in GDP and affect more than 323,000 jobs, a global airline body disclosed.
In a statement issued on Thursday, the International Air Transport Association (IATA) highlighted the impacts of the COVID-19 pandemic on Africa and Middle East. IATA strengthened its call for urgent action from governments in Africa and the Middle East to provide financial relief to airlines as the association’s latest scenario for potential revenue loss by carriers in Africa and the Middle East reached USD 23 billion (19 billion in the Middle East and four billion in Africa). This translates into a drop of industry revenues of 32 percent for Africa and 39 percent for the Middle East for 2020 as compared to 2019.
IATA revealed that Ethiopia will have 1.6 million fewer passengers resulting in a USD 0.3 billion revenue loss, risking 327,062 jobs and USD 1.2 billion in contribution to Ethiopia’s economy. In 2017 the country’s passenger journey was 7.3 million.
IATA’s economic report identified Ethiopia’s air transport and tourism as significant economic enablers. Air transport and foreign tourists arriving by air currently support 5.7 percent of the nation’s GDP valued at USD 4.2 billion and about 1.1 million jobs.
The airline association portrays the impacts of the pandemic on African and Middle Eastern countries. South Africa will have 10.7 million fewer passengers resulting in a USD 2.29 billion revenue loss, risking 186,850 jobs and USD 3.8 billion in contribution to South Africa’s economy. Nigeria – 3.5 million fewer passengers resulting in a USD 0.76 billion revenue loss, risking 91,380 jobs and USD 0.65 billion in contribution to Nigeria’s economy. Kenya – 2.5 million fewer passengers resulting in a USD 0.54 billion revenue loss, risking 137,965 jobs and USD 1.1 billion in contribution to Kenya’s economy.
In Africa air transport employs 6.2 million people and contributes USD 55.28 billion to the continent’s GDP.
IATA stated that to minimize the broad damage that these losses would have across the African and Middle East economies, it is vital that governments step up their efforts to aid the industry. “Many governments in the region have committed to provide relief from the effect of COVID-19. And some have already taken direct action to support aviation. But more help is needed,” the association said. IATA called for direct financial support, loans, loan guarantees and support for the corporate bond market and tax relief.
In a video conference held on Thursday, Muhammad Al Bakri, IATA’s Regional Vice President for Africa and the Middle East, said that several governments in the region are providing some financial and tax reliefs.
According to IATA, every job created in the aviation industry supports another 24 jobs in the wider economy. “Governments must recognize the vital importance of the air transport industry, and that support is urgently needed. Airlines are fighting for survival in every corner of the world. Travel restrictions and evaporating demand mean that, aside from cargo, there is almost no passenger business,” said Muhammad Al Bakri.
“Failure by Governments to act now will make this crisis longer and more painful. Airlines have demonstrated their value in economic and social development in Africa and the Middle East and governments need to prioritize them in rescue packages,” he added.