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China's diversified investment in African airports

China's diversified investment in African airports

Image from impleflying.com


In order to increase China-Africa aviation relations, China has invested heavily in airport infrastructure in Africa.

On one hand, the mere investment in infrastructures such as roads, telecommunications and, of course, airports can provide a short-term boost to employment in numerous economic sectors. Likewise, sound infrastructure provision can decrease transport costs for both imports and exports. In turn, domestic consumers benefit from lower prices while exports become more competitive in global markets.

Like much of the infrastructure across the continent, airports tend to be deficient in terms of costs, quality and capacity. According to a 2010 World Bank report, most African airports are at least in part state owned and work with varying levels of independence.

Though state ownership may lead to non-profit-maximizing business models, African airports tend to levy fees that are higher than industry averages. Presumably, this is due to a lack of non-flight revenues meaning airports must rely on landing fees and facilitation charges to attain modest financial stability.

In terms of quality, air traffic control, radar, and aircraft surveillance are "wanting".  While some airports technically have the physical capacity, they lack certified staff. Many smaller airports, on the other hand, lack critical infrastructure such as civilian radar and instrument landing systems.

Faced with the economic necessity of efficient infrastructure and deficient aerodromes, many African states have turned to China for assistance. As reported by a 2009 World Bank publication, China committed $488m to airport projects between 2001 and 2007. More than a decade later, this number is said to be in the tens-of-billions. Indeed, our research found upwards 24 Chinese investment projects or commitments which have a projected value of $4.45bn.

The nature of these Chinese projects are, however, extremely varied.

In the smaller sub-$50m category, airports such as Kilimanjaro in Tanzania or Ondangwa in Namibia have benefited from Chinese construction or financial assistance.

On the opposite end, projects such the proposed Khartoum New International Airport, reported to be financed through a $700m loan by China's Exim Bank, or Rwanda's projected $1bn Bugesera Airport, top the scales.

In between these two extremities, dozens of projects such as those by Anhui Foreign Economic Construction Group in Mozambique or the China Road and Bridge Cooperation in Uganda or Congo-Brazzaville, serve as examples of Chinese investments.

Firms such as the Anhui Foreign Economic Construction Group or China's Exim Bank presumably profit from construction contracts and finance agreements. Other entities benefit from increased trade ease and the transportation of commodities.

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