Addis Ababa — FAAN calls for new financing model to unlock Africa’s aviation growth

At the Ethiopian Aviation Forum held in Addis Ababa, the Federal Airports Authority of Nigeria (FAAN) highlighted the need for a fundamental shift in how airport infrastructure is financed across Africa.

According to FAAN’s Managing Director/Chief Executive, Mrs. Olubunmi Kuku, Africa’s aviation development challenge is not simply limited access to capital, but the structure of financing models currently in use.

She noted that sovereign risk profiles and low credit ratings across many African economies—often in the BB to B-minus range—continue to constrain borrowing capacity. In addition, she said short-term private equity expectations, typically structured around 5–7 year investment horizons and high return demands, are misaligned with the long-term nature of airport infrastructure development.

To address these constraints, she advocated for blended finance models involving development finance institutions and private investors, alongside instruments such as debt convertibles, green bonds, and infrastructure bonds. She also emphasized modular, phased project development and stronger alignment between investors and long-term infrastructure needs.

“Rather than a straitjacket approach,” she was quoted as saying, flexibility in structuring deals is essential.

The FAAN chief also underscored the broader growth outlook for African aviation, describing the continent as a fast-expanding frontier for air transport. Passenger demand is estimated to be growing by over 6% annually, while cargo volumes have surged significantly in key hubs such as Lagos.

Despite this growth trajectory, Africa accounts for only about 2–3% of global air traffic, compared with roughly 18% of the world’s population—an imbalance she described as a major opportunity rather than a limitation.

She called for investments in airport capacity expansion, smart airport technologies such as biometrics and data analytics, development of aerotropolis hubs linking aviation with logistics and trade, improved intra-African connectivity, and more sustainable infrastructure systems.

FAAN said it is working to align Nigerian airports with these emerging global standards, while emphasizing that continental collaboration will be necessary to fully realize Africa’s aviation potential.

The message from the forum centered on a shared view among industry leaders: Africa’s aviation growth is inevitable, but the key question is whether infrastructure development will keep pace with demand.