Ghana Drops VAT on Domestic Flights as 10 Investors Seek License

The Ghana Ministry of Aviation has received proposals from 10 foreign and local investors to operate in the country’s domestic airline industry.

The country’s Minister of Aviation, Ms Cecilia Abena Dapaah, made this known at the opening of this year’s International Air Transport Association (IATA) Day in Accra, according to an online publication, graphic.com.gh.

It is being organised by IATA, which is the trade association for the world’s airlines.

Participants include key stakeholders in the air travel industry from Africa.

The conference has the theme: ‘Aviation: catalyst for socio-economic development in Ghana’ and will discuss the impact of aviation on the economy, infrastructure development and safety in the industry.

Although Dapaah did not give details of the proposals received, she said the ministry was studying them and would announce the final decision in due course.
She stated that the government considered the development of the aviation sector a priority, for which reason a lot of investment had been made in infrastructural development at the various airports, aerodromes and airstrips across the country.

She added that all facilities at the airports were being modernised to meet international standards and to improve safety and the comfort of travelers.

To promote domestic air transport, Dapaah said the government had abolished the 17.5 per cent VAT on domestic airfares to encourage more patronage by the travelling public and also reduce the cost of operation of airlines.

Dapaah said as part of plans to establish a national airline, which would fly initially in the West African region, a transactional advisor had been working on finding a strategic investor to partner the government.

To improve the regulation and provision of air navigation services, she said a new entity was being established to take care of air navigation, while the Ghana Civil Aviation Authority concentrated on its core mandate of regulating the sector.

“This is intended to improve safety standards and also properly regulate the operations of the various actors in the industry,” she explained.

An IATA Regional Head in charge of membership and external relations in Africa and Middle East, Ms Adefunke Ademeyi, commended Ghana for transforming its aviation industry in recent years.

She named Ghana and Rwanda as one of the countries in Africa which were using aviation to promote their socio-economic transformation.

“The transformations in the airports in Ghana are visible and positive,” she stressed.
She urged African governments to open up their aviation markets in order to promote connectivity and facilitate easy travel on the continent.

For his part, the President of IATA, Mr. Raphael Kuuchi, said globally, the aviation industry contributed $2.7 trillion, which represents 3.5 per cent of the world’s GDP, and directly employed 9.9 million people.

Demand for air connectivity in the next 20 years, Mr Kuuchi said, was projected to double and that would take a tremendous amount of planning and coordination between airlines and other stakeholders in the aviation industry to achieve.