EABC URGES EAC TO LIBERALIZE AIR TRANSPORT SERVICES TO REDUCE COST OF DOING BUSINESS IN THE REGION
Wednesday, 4th August 2021, Arusha, Tanzania: The East African Business Council (EABC) is urging the East African Partner States to fast-track the finalization and implementation of EAC Regulations on Liberalization of Air Transport Services, in a move set to lower flight costs and in turn reduce the cost of doing business in the region.
According to findings from the latest policy paper by EABC, Costs and Benefits of ‘Open Skies’ in the East African Community, air-transport liberalization is set to lower flight costs by 9% and see a 41% increase in flight frequencies.
The paper outlines that, despite the commitments of the EAC Partner States at the international level specifically on the Yamoussoukro Decision (YD) on liberalization of access to air transport markets in Africa and EAC integration efforts through the Common Market, the domestic air transport sector remains protected, reducing accessibility and increasing air transport cost at the expense of potential users.
“Liberalization of air services in the region is set to increase traffic volumes, improve connectivity and lower air transport fares. This will in turn increase trade and tourism, inward investment and productivity growth,” said EABC CEO, Mr. John Bosco Kalisa.
Mr. Kalisa is urging the EAC Partner States to waive landing fees, excise duty on aviation fuel, navigation, landing, parking and COVID-19 related fees to see a reduction in operating costs.
“To encourage imports by air, EAC Partner States should waive all import duties and Value Added Tax (VAT) by air during the COVID crisis.
The policy paper also recommends for the EAC Partner States to provide subsidies for the aviation industry in the form of direct financial support; loan guarantees, corporate bonds and tax reliefs.
EABC is also urging EAC Partner States to grant each other the free exercise of the rights of the first, second, third, fourth and fifth freedoms of the air on scheduled passenger, and non-scheduled passenger, cargo and/or mail flights performed by an Eligible Airline to/from their respective territories.
“By removing foreign restrictions, EAC Partner States will be able to attract private sector investment. This will open up access to capital and avail investment in infrastructure upgrades and capacity expansion for regional airports,” Mr. Kalisa added.
Covid-19 has seen a drop in the tourism sector. In 2020, EAC received about 2.16 million international tourists compared to about 7.05 million in 2019. International tourist receipts dropped from USD 6.1 billion in 2019 to about USD 1.9 billion in 2020.
Mr. John Bosco Kalisa Executive Director /Chief Executive Officer
East African Business Council (EABC)
9th Floor Mafao House | Old Moshi Road | Arusha | Tanzania
P. O. Box 2617 | Tel: +255 27 2520162
EABC – The Voice of the Private Sector in East Africa
About East African Business Council: The East African Business Council (EABC) is the regional apex body of private sector associations and Corporates from the 6 East African countries. It was established in 1997 to foster the interests of the private sector in the integration process of the East African Community. EABC vision is a borderless East Africa for business and investment. The primary mission is to promote sustainable private sector-driven growth in the EAC.