African airlines pay 30% interest on aircraft loans while rivals get 3% — Keyamo

Access to affordable financing is the single biggest problem holding back Africa's aviation sector — not a lack of passengers or airlines. That's the blunt assessment from Nigeria's Minister of Aviation and Aerospace Development, Festus Keyamo.

Speaking Tuesday at the inaugural African Air Transport Conference in Lomé, Togo, Keyamo didn't mince words. "The real problem of Africa is fleet renewal, access to financing," he said.

His math tells the story. Airlines in Europe, America, and Asia can borrow to buy aircraft at interest rates between 3% and 6%. African operators? They face rates around 30% from local banks.

"How do they get aircraft at competitive rates when other parts of the world are getting aircraft and financing their aircraft fleet at three per cent, five per cent or six per cent?" Keyamo asked. "Our banks here are giving us 30 per cent and we want to compete in the same market. It's not possible."

That gap has a direct consequence for passengers who complain about old planes. Keyamo explained that aircraft typically spend their first years — when they are most profitable — flying in rich markets with cheap financing. By the time they reach Africa, many have already passed 15 years of service.

"Most of the aircraft that come to Africa are old aircraft," he said. "We all complain about them, but the issues are deeper than a minister simply saying don't bring this aircraft. If you don't bring it, where will we get the newer ones from?"

"The traffic is there, the desire to travel is there, the private airlines are also coming up now."

The demand exists, Keyamo insisted. What's missing is the financial infrastructure to turn that demand into modern fleets.

He welcomed efforts by the African Development Bank and the African Export-Import Bank to create financing solutions for fleet renewal. But he argued that Africa must go further — reducing its dependence on foreign aircraft lessors and building its own lending capacity tailored to the continent's realities.

Without that, he warned, African airlines will keep flying older, less efficient aircraft while paying far more to acquire them. That makes it nearly impossible to compete on price, reliability, or safety perception with carriers from other regions.

The minister also noted that stronger financing would allow African airlines to expand routes and improve connectivity across the continent — a goal that's remained elusive despite growing passenger demand.

Keyamo, a lawyer and former labour minister appointed by President Bola Tinubu in 2023, has made aviation sector reform a priority. His comments in Lomé reflect a frustration shared by many African aviation executives who've watched the continent's carriers struggle while airlines elsewhere recover and grow.