The on-going reforms in the aviation sector and adoption of innovative ways to attract private capital will make it the next growth pole, capable of stimulating economic development in allied businesses such as the tourism, transport and hospitality sub-sectors, Aviation Minister, Joseph Kofi Adda, has said.
This, he noted, will lead to the creation of hundreds of jobs and position the country as the sub-region’s aviation hub.
“ …We have set out key priority areas and initiated interventions to ensure the realisation of these through various activities: including Construction, Renovation and Modernising of our airports; decoupling Air Navigation Services from the regulator to improve safety and security; improving training and development; collaboration with sector ministries; making our airports user-friendly, safe and secure for all passengers using our terminals in line with international standards; and creating the platform for participation of interested investors in the sector,” Mr. Adda said.
He added that “the outlook for Ghana’s aviation remains very bright with many exciting benefits. In this regard; the private sector’s role in driving the sector’s agenda is paramount. With the limited government revenue being shared for all sectors of the economy, it is only prudent that we, as a sector, become very innovative in our way of doing government business – to attract the needed capital for growth of the aviation industry, and to create the needed jobs for Ghanaians”.
He was speaking at the Mid-Year Review of the Aviation Ministry held in Accra to take stock of the ministry’s activities over the past six months, and to further deliberate on matters of strategy to grow the sector.
A study by the International Air Transport Association (IATA) shows that the economic benefits of aviation investment are still large, and provide a strong justification for investment in the aviation industry.
The study found that for developing economies, the annual economic rates of return range from 16% to 28%. “Developing countries face capital costs, especially for new aircraft, that are similar to those faced by developed countries. As such, though the boost to GDP is higher in proportional terms for developing economies, the capital costs are still high. Nevertheless, the available economic return is still large and provides a strong justification for investment in the aviation industry.
“There are significant and positive benefits generated by investment in aviation infrastructure and services, particularly in developing economies. By increasing a country’s connections to the global air transport network, investment in aviation can boost its long-term productivity and economic growth.
“Greater aviation connectivity – and the improvements in productivity and GDP growth it can provide – can also help to boost a country’s competitiveness. By way of illustration, the World Economic Forum (WEF) has developed a Global Competitiveness Index for the travel and tourism sector. The WEF’s index incorporates many of the factors necessary to develop connectivity and create wider economic benefits in terms of productivity and economic growth. There is a clear positive relationship between a country’s connectivity and its performance in the WEF index,” the report noted.
Given the enormous benefits of investment in Aviation, Mr. Adda noted that: “The role of the private sector is paramount. It is incumbent upon us to search up-field to see how we can secure funds. Public-Private-Partnerships (PPP) in the aviation sector hold the prospect of unlocking private capital.