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Heavy taxation on Africa’s aviation sector is stifling economic growth, undermining job creation, and fueling youth unrest across the continent, according to Esayas Woldemariam Hailu, CEO of ASKY Airlines. Speaking at a World Bank summit this week, Hailu issued a direct appeal to African governments to slash excessive levies on airline tickets and jet fuel—charges he said are deterring investment, discouraging travel, and limiting economic opportunity for millions of young Africans.
“When you buy a ticket in Africa, one-third of the cost goes to taxes and fees. Only two-thirds goes to the airline to cover all operational expenses,” Hailu told a panel titled Powering Job Creation in Africa. He pointed out that aviation fuel costs roughly 30% more in Africa than in Europe, while taxes per passenger ticket are double European levels. These disproportionately high costs, he argued, are effectively sabotaging the aviation industry—a sector with immense potential to connect markets, enable trade, and drive employment across a continent of 1.4 billion people.
Hailu’s remarks came amid growing concern over youth-driven protests and rising unemployment. Across Africa, young people—especially members of Generation Z—are increasingly vocal in their demands for better jobs and public services. In countries like Morocco, protests have centered not just on employment but also on access to quality healthcare, education, and infrastructure.
“When people are employed and earning, there’s more peace, less migration, and fewer youth protests,” Hailu said. “People who have stable incomes settle down, raise families, and contribute to their communities.” His conclusion was blunt: “If you want peace, invest in aviation.”
Hailu criticized the current tax regime as irrational and counterproductive. “Africa is an exotic place where aviation is taxed more than tobacco or alcohol,” he said. “Yet aviation is not a luxury—it’s a critical enabler of development.” He called on governments to view aviation not as a revenue extraction point, but as a strategic economic tool that facilitates movement, connects entrepreneurs, and stimulates growth.
The situation is compounded by unfulfilled regional integration promises. Hailu pointed specifically to the Yamoussoukro Declaration, a 1999 African Union agreement meant to liberalize air transport across the continent. He lamented the lack of political will to implement it. “After AU summits, leaders go home and revert to protectionism,” he said. “We need real liberalization—both in the spirit of the Yamoussoukro Declaration and the African Continental Free Trade Agreement (AfCFTA).”
Aviation’s Ripple Effect: Jobs, SMEs, and Trade
According to Hailu, liberalizing airspace and reducing taxation would create economies of scale, improve logistics for small and medium enterprises (SMEs), and make it easier for informal cross-border traders—such as “suitcase merchants”—to grow their businesses. These micro-entrepreneurs represent a large portion of Africa’s informal economy and are often blocked from expansion by high travel costs and bureaucratic hurdles.
He also highlighted the paradox of the global aviation industry: despite generating over $1 trillion in annual revenue, the sector operates on razor-thin margins (just 3% profit), while ancillary industries—like hotels, catering services, and airport operators—enjoy far higher profitability. “Airlines are subsidizing entire ecosystems,” Hailu said. “We need tax relief to keep the aviation sector alive so the broader economy can thrive.”
World Bank Emphasizes Healthcare and Infrastructure for Job Growth
Anna Bjerde, the World Bank’s Managing Director of Operations, echoed the urgency of addressing Africa’s employment crisis. She laid out a five-sector strategy for sustainable job creation: healthcare, infrastructure (including energy), agriculture, tourism, and value-added manufacturing. “We see care jobs not only as a way to improve public health but also as a major employment engine,” Bjerde said, highlighting healthcare as both an enabler of productivity and a job market in its own right.
She added that the success of these sectors relies on three foundational pillars: strong infrastructure, a business-friendly environment, and the mobilization of private capital.
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Africa is poised to account for over half of global population growth by 2050. This demographic surge presents both an extraordinary opportunity and a looming crisis. If governments fail to harness the potential of their growing youth populations through employment and economic inclusion, the continent risks further instability.
For Hailu, aviation holds the key. “Lowering taxes on aviation is not about giving airlines a break—it’s about fertilizing the economy. Once the economy grows, governments can collect more revenue through other means.” The choice, he argued, is clear: “Reform aviation now, or face worsening unrest and missed opportunities.”
Whether African leaders will act on these warnings remains to be seen. But as Hailu and other industry leaders made clear at the summit, the clock is ticking—and the skies may yet hold the answer to Africa’s future.
