30 November 2020. The African SOEs Network secretariat convened its 2nd webinar on the “Role of State-Owned Enterprises in the Economic Recovery of African Countries Post Covid-19”, which had a special focus on National Airlines and State-owned banks. The webinar was aimed at exploring the impact of COVID-19 on the aviation industry as well as the financial institutions and to discuss on how to turn the COVID-19 crisis into a window of opportunity to better position the financial system and airline industries to support the economic recovery on the continent.
“Banks and Airlines are strategically positioned to support the economic recovery process. It is therefore crucial to explore the possible scenario state owned banks and airlines could play in fostering economic growth, job creation, and overall contribution to the development of the continent”, said Ms. Tumi Dlamini, the APRM advisor to the CEO on SOEs.
The first panel that was facilitated by Mr. Nick Fadugba, Chairman, African Business Aviation Association, discussed the impact of shutdown of air traffic due to the COVID19 pandemic on the African aviation industry. Speakers at the panel namely, Mr. Allan Kilavuka, CEO, Kenya Airways; Mr. Busera Awel, Group Vice President Strategic Planning and Alliances of Ethiopian Airlines Group; Ms. Yvonne Manzi Makolo, CEO, RwandAir Ltd; deliberated on the COVID-19 coping mechanisms that were adopted by their respective airline. These include, expansion of cargo facilities, re-negotiating aircraft leases, capital injection, establishing new partnerships with the other domestic and international airlines.
Conclusions drawn from the aviation panelists summarised that, although there is huge opportunity for the sector to grow, lack of cooperation among African aviation service providers is hindering the potential. The Panelist urged the lack of cooperation and trust between African Airlines should be looked at by the African Union and advised the implementation of the Single African Air Transport Market (SAATM). Meanwhile, the airline executives welcomed the proposal to join forces to ship COVID-19 vaccine once become available.
The second panel on the role of the State-Owned Banks to the Post Covid-19 economic recovery discussed how the pandemic impacted the banking industry. More specifically looking at the restructuring of loans, making new loans, lower interest rates, dropping minimum capital requirements and reducing the amount of funds banks need to park with them as reserves, loan guarantee schemes, how digitalization of transactions assisted, and downgrading of banks by the major global credit rating agencies,
It was concluded that the banking sector in general and the state-owned banks in particular play a critical role in ensuring financial stability and economic recovery of the continent. The second panel was composed of Mr. Pietro Toigo, Country Manager for the African Development Bank in Mozambique; Mr. Henda Ingles, Chief Executive Officer of Development Bank of Angola; Ms. Boitumelo Mosako, Chief Financial Officer of Development Bank of Southern Africa; and Dr. Diane Karusisi, Chief Executive Officer of Bank of Kigali.