Trade and investment links between China and Africa are growing, and airlines that transport cargo between the two markets are reaping the benefits.

“Based on Seabury data, air trade from January to June in 2016 was 24% higher than the same period last year, at a total of 62,990 tonnes,” says Ulrich Ogiermann, chief officer of cargo at Qatar Airways. “Import and export activities from China to East Africa have increased tremendously by 70%, and the region has now accounted for half of the total air trade in Africa. Ethiopia is by far the main destination in East Africa, taking up almost two thirds of the trade, followed by Kenya.”

The airline flies to seven destinations in China and 28 in Africa, the latest addition being the Namibian capital Windhoek, which it serves four times a week with a Boeing 787-8. According to Ogiermann, Qatar Airways now brings approximately 2,000 tonnes of bellyhold and freighter cargo capacity into and out of Africa.

Ethiopian Airlines, which has the largest freighter fleet in Africa consisting of two 757-200Fs and six 777Fs, has been experiencing the effects of the increased trade first hand.

“Compared to a similar period last year, this year ET cargo has grown by an average of 40% throughout China,” says Berhanu Kassa, director of global cargo sales at Ethiopian Airlines.

The carrier signed a memorandum of understanding with the Guangdong Airport Authority in September 2016, under which one of the main aims is the promotion and development of cargo between southern China and Africa for an increase in freighter frequencies to Guangzhou.

“Guangzhou is the centre for African business in China, especially commodities,” says Kassa. “The city is known for populating the largest number of African communities compared to any other Chinese city. Ethiopian is the largest African airline with the largest network. Moreover, it is the most golden time for trade between Africa and China because of China’s Belt and Road initiative. Therefore, Guangzhou is a key point for the development of ET cargo at the moment.”

The nature of the links between China and Africa was highlighted by the Chinese president at the sixth triennial Forum on China-Africa Cooperation held in Johannesburg in December 2015.

“By the end of 2014, the total stock of Chinese investment in Africa had reached US$101 billion, resulting in more than 3,100 Africa-based enterprises,” said president Xi Jinping. “Two-way trade reached US$221.9 billion in 2014. China has become Africa’s principal cooperation partner in such areas as trade, investment, infrastructural development and economic cooperation parks.”

According to Ogiermann, Africa now imports a wide variety of consumer and capital goods from China such as clothing and accessories, telecommunications equipment, consumer products and household goods.

“Africa’s export is inversely much smaller at only 15%, comparing to the total exports out of China,” he says. “Thus, it is evident that most of the air freight traffic comes from China into African destinations. The commodities out of African countries are mainly perishables such as seafood produce and flowers. Today, Morocco is one of the main exporters, contributing 46% of total African exports.”

Ogiermann adds that Qatar’s top five African destinations with promising import growth are Cairo, Johannesburg, Lagos, Algiers and Entebbe, which account for 77% of the carrier’s total air freight tonnage from China to Africa, transiting via Doha.

Given Ethiopian’s large African network, perhaps it’s not too surprising that a large proportion of the air freight transported by the Addis Ababa-based carrier is ultimately headed elsewhere on the continent.

“In the current year, about 25% of cargo was destined for Ethiopia and the other 75% was in transhipment,” says Kassa. “Major destinations for transhipment include Nigeria, South Africa, Ghana, the Democratic Republic of Congo, Angola, Zambia, Cameron and Zimbabwe.”

As part of an effort to become the leading aviation group in the African market under the company’s Vision 2025 initiative, Ethiopian Airlines is in the process of building a new cargo terminal over two phases, bringing with it a significant boost of the carrier’s handling capabilities.

“Once completed, the €107 million (US$111 million) cargo terminal expansion project will have a capacity of 1.2 million tonnes per annum and it will be the largest transhipment terminal in Africa,” says Kassa. “Now, 80% of the first phase has already been completed.”

Going forward, Ogiermann has high hopes for Lagos, Nairobi and Johannesburg in Africa.

“These are the major cities that remain robust and investors are prospering in the retail, financial services, technology and construction sectors,” he says. “To date, Nigeria’s export has increased by 50% and Hong Kong tops its trade partner chart. South Africa and Kenya continue to be strong exporters of machinery parts, automotive products and perishables. Our QR Fresh solution designed for climate-controlled cargo has been prevalent in these markets.”

Ogiermann adds that, although trade in the intra-Asia market is expected to grow faster than any other region, Qatar Airways’ African network is equally important and will complement the carrier’s expansion in mainland China and Southeast Asia.

“Rapid urbanization has made Africa a market of global scale as its population is expected to double over the next 25 years, the fastest growth rate of any continent,” he says. “With vast enhancements in its infrastructure and communication as well as further promotions on intra-Africa and international trade, we believe Qatar Airways Cargo will continue to invest and expand as a prominent international air cargo player in the region.”

By Jeffrey Lee

Asia Cargo News | Hong Kong