EVALUATION OF THE IMPLEMENTATION OF THE YAMOUSSOUKRO DECISION IN THE CEMAC ZONE
THE EXPERIENCE OF FOUR COUNTRIES:
CAMEROON, CENTRAL AFRICAN REPUBLIC, CONGO AND GABON
EXECUTIVE SUMMARY
ECONOMIC COMMISSION FOR AFRICA APRIL 2004
I. Introduction
1. In the context of the great upheaval that the international air transport industry witnessed in the 1990s, the adoption of the “Decision Relating to the Implementation of the
Yamoussoukro Declaration Concerning the Liberalisation of Access to Air Transport Markets in Africa” by African ministers in charge of air transport in November 1999 laid the
foundations of a policy of intra-African aviation liberalization. The decision represents one of the most significant political acts that Africa has witnessed in the area of aviation since the adoption of the Yamoussoukro Declaration in 1988. The objectives of the Declaration are still
valid but implementation has proved to be slow and cautious, with a lack of appropriate legal framework.
2. In 2000, Organization of African Unity (OAU) and African Union (AU) heads of State and Government adopted the Decision and it became mandatory in August 2002 for all member States that ratified the Abuja Treaty, establishing African Union.
3. At the subregional level, two legal instruments have been adopted as an expression of the political will of States, in order to combine their efforts to respond to the challenge posed by global liberalization and to establish subregional air transport with a durable, ordered, efficient and reliable foundation. They are as follows:
a) The adoption of the Air Transport Agreement between member States of the Central African Economic and Monetary Community (CEMAC) by CEMAC Council of Ministers in August 1999; and
b) The signing of a Memorandum of Agreement between 23 countries of West and Central Africa, reaffirming their commitment to fully apply the Yamoussoukro Decision.
4. In taking into account these factors and in collaboration with its partners, the Economic Commission for Africa (ECA) has considered it necessary to carry out subregional
evaluations and to place the conclusions of these evaluations at the disposal of ministers so that corrective measures may be taken.
5. This study aims to identify the level that States of the CEMAC zone have reached in their efforts to implement the Decision. The evaluation has been undertaken with ECA financing in four CEMAC member States, namely Cameroon, Congo, Gabon and the Central African Republic. These four countries represent 56.56% of the air space of the CEMAC zone and 73.55% of the population. However, it will be extended to two other CEMAC countries, namely Chad and Equatorial Guinea, as well as Sao Tome and Principe as soon as the question replies are available.
II. Objectives
6. The specific objectives of the study are as follows:
a) To report on the implementation of the Yamoussoukro Decision;
b) To evaluate the impact of the Decision on the development of air transport;
c) To note the related difficulties and constraints;
d) To propose measures to eliminate the constraints identified; and e) To inform policies.
III. General overview
Importance of air transport
7. The four countries surveyed are members of two economic communities that coexist in Central Africa: (i) the Central African Economic and Monetary Community (CEMAC); and (ii) the Economic Community of Central African States (ECCAS).
8. The main aim of these two communities is to reinforce the economic integration process and to coordinate national polices by taking joint actions and adopting common policy in different areas, including the physical and operational integration of air transport, as well as the progressive harmonization of laws and regulations governing transport and
communications.
Politico-economic organization
9. The physical and geographic environment (characterized by dense vegetation, heavy rainfall and several flood areas) makes the movement of persons and goods difficult. This physical environment very much restricts the construction and maintenance of land transport infrastructures (roads and railways).
10. In view of the total area of the four countries and the physical and geographic facts, road transport is insufficient and precarious and this is why air transport is important and plays a
fundamental role in economic development and in the physical integration and movement of persons and goods.
The air transport market
11. The air transport market of the four countries dealt with a relatively large volume of traffic in 2002, as sustained growth in traffic indicators (passenger and cargo aircraft movements) was recorded in 2002.
12. For the whole market of the four countries, aircraft traffic movement increased by 6.8%
in 2002 in relation to 2001, rising from 124,000 to 133,000 movements.
13. Passenger traffic followed the same tendency, with an increase in aircraft movements in all four countries. With 2.7 million passengers in 2002 against 2.1 million passengers in 2001, passenger traffic rose by 26.9%.
IV. Implementation of the Yamoussoukro Decision
14. Assessment of the status of implementation of the Yamoussoukro Decision, its
development and chronology has been set out from the perspective of the key provisions of the Decision, which are the “pillars” of liberalization. These include:
a) The precedence and binding force of the Decision;
b) Access to markets and granting of traffic rights, the recognized freedom for operators to fix frequencies and capacity offered;
c) Right of establishment (designation and eligibility criteria);
d) Liberalization of tariffs; and e) Other measures.
The precedence and binding force of the Decision
15. An important aspect of appreciating the level of implementation of the Decision in the four countries surveyed is directly linked to the recognition of the Decision, in law or in
practice, as a legally binding instrument, creating laws and obligations in relation to all State parties to the Decision.
16. Individually and collectively, the four States recognize the precedence of the Decision over national laws and regulations, bilateral and multilateral agreements. In the framework of CEMAC as well as in the national context, they have taken concrete measures to transpose the text and principles of the Decision into Community and national laws and/or into their administrative practices and general policy. The case of Gabon, which has adopted a presidential decree, is illustrative and should serve as a model for all African countries because Gabon has made the political will expressed at the level of fora into a reality. In addition, Gabon has shown evidence of good governance by conveying its commitment through an act that is in accordance with the civil aviation authority.
17. At the national level, in addition to Gabon, Cameroon has taken legislative measures that transpose the Decision into its national legislature. The Congo and the Central African Republic have not taken similar measures. However, from the perspective of general policy, these two countries recognize in practice the precedence of the Decision over bilateral agreements.
18. At the level of CEMAC, the adoption of the Civil Aviation Code and the CEMAC Agreement reflect a commitment to respect the precedence of the Decision.
19. In this respect, it is absolutely clear that national aviation administrations consider bilateral agreements to be obsolete. These agreements have been tacitly amended by
provisions of the Decision, especially with regard to traffic rights, the number of companies that can be designated, flight frequency, aircraft capacity, eligibility of airlines and tariffs.
Access to markets and granting of traffic rights
20. Since August 1999, the CEMAC Agreement and the Community Civil Aviation Code have liberalized access to intra-Community markets, thus expanding air space and the air
transport market and this has allowed national airlines to operate air services where the market demands them.
21. At the level of aviation relations with African countries, the four countries show greater flexibility in the granting of traffic rights and a relaxation of the fifth freedom traffic right in accordance with the provisions of article 3 of the Decision governing the granting of traffic rights.
22. Several countries and airlines have benefited from the fifth freedom traffic right, including:
1. Angola 2. South Africa 3. Benin
4. Côte d’Ivoire 5. Guinea 6. Kenya 7. Mali 8. Nigeria
9. Sao Tome and Principe 10. Sudan
11. Ethiopia 12. Togo etc.
Practically every African State that requested the fifth freedom traffic right was granted it.
23. In practice, the four States have not refused any frequency and capacity increase requested by an African airline. The only reasons that justify a bid for additional frequency and capacity to be turned down result from technical reasons, i.e. airport capacity,
installations and equipment or compliance with national and international safety and security
regulations. However, it should be noted that the four countries do not receive the same treatment from some countries of West and Southern Africa. This question will be brought to the attention of African Union through ECA, which is the secretariat of the follow-up
committee, so that a solution may be found.
Right of establishment
24. An important condition for the right of an airline to operate without bureaucratic hindrance or delay is the right of establishment to operate authorized services in its three components: designation, eligibility criteria and authorization procedure.
25. In fact, the CEMAC Agreement specifies that each member State has the right to designate a maximum of two airlines to exploit intra-Community air services.
26. In relation to African States, the four States surveyed recognize the right of multiple designation to operate intra-Community air transport services in accordance with the Decision.
27. In addition, the CEMAC Agreement establishes as an eligibility criterion the designated company’s establishment of headquarters and its main operational activities in the country that designated it.
28. Several African countries have benefited from multiple designation, including:
1. South Africa 2. Benin 3. Mali 4. Togo etc.
Tariff liberalization
29. In relation to conditions required for tariffs, the CEMAC Agreement specifies that Community airlines should be free to set their tariffs, which should be reasonable in comparison to international tariffs. They are obliged to notify aviation authorities of their
tariffs 60 days before their application. They are also obliged to respect Community regulations regarding competition.
30. Similarly, for the other African countries, the four States follow the principal of tariff liberalization decreed by the Decision (article 4). In practice, States have abolished all approval and control of air tariffs, and airlines are free to set tariffs.
Other measures
31. In the framework of CEMAC, the four States have prepared other provisions that govern the following:
a) The competition applicable to airlines in order to eliminate unfair trade
practices (collusion, abuse of dominant position etc.). These provisions go beyond the Decision;
b) A regulatory mechanism for disputes between States and/or designated businesses, with the arbitration of the Council of Ministers in charge of civil aviation. In cases where the decision of the Council might not be accepted by one or both of the parties, the dispute will then be brought before the Community Court of Justice, which rules in the last resort.
c) The institutional arrangements for management, follow-up and monitoring that are provided by the Council of Ministers in charge of civil aviation, with the assistance of a Follow-up and Monitoring Committee; and
d) The restrictive measures relating to offences and sanctions – an innovation by CEMAC in relation to the Decision. Designated businesses that contravene their obligations as specified by the Agreement will be liable to sanctions. Offences are noted by civil aviation authorities, airlines and members of the Follow-up and Monitoring Committee. Sanctions are pronounced by the Council of Ministers in charge of civil aviation, following the recommendations of the Follow-up and
Monitoring Committee. The sanctions consist of financial sanctions, temporary suspension, reduction in capacity, withdrawal of traffic right, traffic ban on some routes etc.
32. The four countries have therefore gone beyond the Decision by instituting a structured regulatory mechanism for disputes and a structured management, follow-up and monitoring mechanism under the supervision of CEMAC organs, which Community organs have the acknowledged right to inspect.
33. To summarize, it follows that the four countries, individually and collectively with other CEMAC members, apply the provisions of the Decision and sometimes go beyond the minimum required by the Decision.
34. However, it is important to emphasize that the CEMAC Agreement, in its current form, contains elements that should be brought into line with the Yamoussoukro Decision but these elements do not affect the fundamental principles of the Decision. They relate to the
following: in the field of application, the Agreement is limited in comparison with the Decision and is not applicable to non-scheduled passenger air transport; the obligation to coordinate and harmonize flight programmes; the requirement for commercial agreement in case of disparity between the capacity offered and the type of aircraft used; the obligation to notify aviation authorities of all tariffs 60 days before their application.
V. Impact of the implementation of the Decision – “Results and prospects”
35. The other side of the implementation of the Decision and the corresponding subregional liberalization measures is an improvement in supply, internal and external connectivity, a reduction in tariffs and in general an improvement in the quality and quantity of air services offered by airlines. The impact of the implementation of the Decision has been examined based on the following parameters:
a) Private sector participation;
b) Access to the market: traffic rights, capacity, frequency, designation etc.
c) Traffic volume;
d) Tariffs;
e) National companies’ operations: technical and commercial cooperation and competition.
Private sector participation
36. With reference to private sector participation, the number of registered private airlines in all four countries increased by 29 in 2002 in relation to 1988. In fact, in 1988 there were a total of 12 national airlines serving all four countries. Among these national airlines, three companies operated regional and long-haul routes (Air Afrique, Cameroon Airlines and Air Gabon) and nine private companies operated internal and short-haul routes.
Table No.1
Domestic and regional national airlines
1988 2002
1. International airlines based in the CEMAC zone
3 02
2. Domestic and regional national airlines (CEMAC zone)
9 29
Total 12 31
37. In 2002, there were 31 airlines in all four countries, of which two were international companies (Air Gabon and Cameroon Airlines) and 29 were domestic, regional and charter private companies.
Effects on traffic
38. The statistical data available for all four countries highlights sustained traffic growth between 1988 and 2002. Liberalization has allowed for an increase in traffic that has undergone a spectacular progression, rising from 1.6 million passengers in 1998 to 2.7 million in 2002. The traffic in (national and international) aircraft movements in all four countries increased by 14.1% in 2002 in relation to 1998, rising from 116,772 to 133,200 movements.
39. The dominant traffic trend is national traffic, with 1.7 million passengers, representing 50% more than international passenger traffic of the four countries in 2002.
Effects on national airline operations
40. With the launching of the liberalization policy, national airlines have evolved in a climate of competition. In 1998, seven foreign companies that were based outside the CEMAC zone were present in all four countries. In 2002, 15 foreign airlines served all four countries, of which three were European companies and 12 were African airlines.
41. Some Central African national airlines encounter difficulties in using the fifth freedom right, including in areas of West and Southern Africa. This question merits an in-depth consideration and will be brought to the attention of coordinating institutions such as African Union, ECA, African Civil Aviation Commission (AFCAC) and African Airlines Association (AFRAA), especially as airlines enjoy all rights in Central Africa.
42. The network of national airlines is generally characterized by a shortage of connections and availability of adequate and reliable air services in the Central African subregion.
However, an improvement in the intra-African network has been observed, particularly in East and Southern Africa as a result of the operations of four companies offering air services:
Ethiopian Airlines, Kenya Airways, Inter Air and Soudan Airways.
43. However, the quality of air services is poor and is characterized in particular by unreliable flight programming, frequent and even systematic delays, unexpected cancellations of flights etc.
Effects on tariffs
44. The absence of reliable data does not allow conclusions to be drawn about the effect of liberalization on tariffs. However, for the moment, the launching of liberalization has not yet been accompanied by a significant reduction in tariffs due to the monopolistic situation on the majority of long-haul and continental routes. In fact, limited competition increases tariffs and places passengers at the mercy of the few active companies, or even the only companies, on certain routes (for example, the Bangui desert).
Summary
45. In summary, in spite of the short transitional period since the introduction of liberalization measures by the four countries, the positive results of the implementation of the Decision by means of corresponding subregional measures allow certain conclusions to be drawn:
a) Firstly, liberalization and implementation of the Decision are today accepted facts. All four States have shown their commitment through measures taken at the national and
subregional levels and by eliminating regulatory barriers and State control of access to the air transport market and other airline practices.
b) The setting up of an arsenal of regulations and Community institutions to manage the process are the gains of liberalization both at the national and subregional levels.
c) The disappearance of the obstacle of restrictions has allowed for the development of a number of companies, the development of competition in some sectors and for an increase in traffic.
d) The integrationist movement within CEMAC and the establishment of a Community airline such as Air CEMAC (whose concept and organization are under review) will
strengthen the foundations of air transport and lead to a vast movement of persons and goods in the subregion. In this respect, there are many preconditions and questions that need to be considered for the possible harmonization and establishment of a self-operating entity.
VI. Constraints and difficulties
46. In the light of the analysis above, the major problems and constraints that arise in the liberalization process initiated by the four countries can be summarized as follows:
(a) Complexity of the liberalization programme;
(b) Handicaps and difficulties of national airlines;
(c) Administrative and regulatory constraints; and (d) Institutional constraints.
Complexity of the liberalization programme
47. In general terms, the liberalization process in the four countries encounters difficulties due to the complexity of the reform programme, which comprises of several components: (i) the need to overcome the bureaucratic and monopolistic habits of national airlines; (ii) the ability of national companies to adapt to the situation; (iii) the need to implement regulations at both the national and regional levels; (iv) the lack of a financing mechanism for regional activities and for the coordinated and harmonized follow-up to reform components; (v) the ever present pressure and resistance to change by influential national and regional airlines in particular; and (vi) the privatization process of airlines.
Handicaps of national airlines
48. The effects of liberalization are complicated above all by the inherent difficulties of modestly-sized and fragile airlines, as they adapt with difficulty to the new liberalized environment. The constraints and difficulties of national companies are multifaceted and are linked to several factors:
(a) The limitations of the national private sector to mobilize necessary resources to finance air transport activities. The considerable volume of investment and expertise required limit the possibilities of the African private sector;
(b) Size and competitive position, lack of cooperation and partnership, their inability to adapt rapidly to the rate of transformation required by liberalization;
(c) Management instability and political interference have made situations worse. Important files change hands when they are not simply abandoned.
(d) Cooperation and partnership among subregional airlines are little developed; and (e) The difficulties of Central African airlines in obtaining fifth freedom rights, particularly in West and Southern Africa.
Administrative and legal constraints
49. Administrative and regulatory constraints must be added to the handicaps of subregional airlines. Despite the provisions of the Community Civil Aviation Code, in many countries national regulations have not been revised, harmonized or adapted to the liberalized market, particularly with regard to safety oversight and national regulations relating to authorization of airlines.
50. The diversity of national aviation laws and regulations does not take into account the necessity for harmonization and coordination at the Community level. In this context, the sharing of Community projects of air transport economic regulation and safety oversight with a collaborative approach acquires an even greater importance to CEMAC. However, there is a Co-operative Development of Operational Safety and Continuing Airworthiness
Programme (COSCAP) project for CEMAC countries in the framework of the World Bank aid for the liberalization programme in West and Central Africa.
Institutional constraints
51. The implementation of liberalization measures is confronted by institutional constraints that are essentially linked to the lack of financial and human resources to give Community organs and national administrations the necessary means to allow them to carry out their duties.
52. Even if Community structures exist within CEMAC to manage, follow-up and monitor the liberalization process, the institutions that have been established are not fully operational at present. This situation can be partly explained by the lack of financial means and necessary expertise.
53. The Executive Secretariat of CEMAC, for example, does not currently have adequate financial and human resources to effectively face up to its responsibilities resulting from implementation of Community legislation.
54. The lack of human and financial resources does not allow for an efficient and timely undertaking of actions as required by management of the liberalization programme. As a consequence, political commitments reflected in Community regulations and the Agreement are not adequately followed by Community organs.
55. The framework of reform cooperation and harmonization is not yet operational. The structure of sustained follow-up and monitoring is therefore not yet in place.
56. At the national level, the problems are identical: the aviation authorities have financing problems. This situation has an impact on air transport safety. Aviation authorities continue to use outdated legislative texts to regulate air services. In addition, they do not have the power and the necessary financial and human resources to manage their own activities and control those of airlines.
57. Consumer protection is lacking. In general, African passengers do not know their rights and are not informed; aviation legislation that protects the rights of passengers does not exist.
Complaints made by passengers are multiple. They relate to customs hindrances, flight delays, poor service at airports, cancellation of flights without warning, refusal to board confirmed passengers, inadequacy of service etc.
58. However, a general framework to protect consumers has been set up by the Community Civil Aviation Code and establishes as follows, without dealing with cases of refusal to board confirmed passengers or quality of service:
a. A common system governing the liability of carriers, based on the provisions of the Warsaw Convention or any other convention or protocol that modifies or replaces it;
b. Common liability limits for the carrier, relating to each passenger and set at DTS100,000;
c. Common provisions relating to advance payments. In case of aviation accident leading to the death or injury of passengers, the carrier will pay advances without delay to physical persons who have the right to compensation to allow them to meet their immediate economic needs; and
d. Common provisions governing the types of insurance required by all air carriers, including civil liability insurance, aircraft insurance, passenger insurance, luggage, mail and freight insurance and insurance for damages to third parties on the ground.
V. Prospects and recommendations
Prospects
59. Despite operational constraints and difficulties, air transport in the CEMAC subregion has important assets and plays a leading role in the movement of persons and goods.
60. This role is all the more important as other means of transport (road, rail) do not provide organized and reliable services in the interior as well as the exterior of the CEMAC zone. In addition, air transport has adapted so as to transport high-value goods, as well as to transport fresh goods, including flowers that the subregion has at its disposal.
61. Potential for tourism – the subregion attracts very few tourists at the present time. The great variety of fauna and flora, the socio-cultural richness, the relief etc. constitute the essence of tourist potential. This potential can lead to an important flux of tourists that would be liable to increase air transport traffic.
62. Economic recovery – the standard of living in the subregion is improving, as indicated in the “Report on economic and social conditions in the West African subregion” by the
subregional ECA Office in West Africa. An upturn in national economies is noticeable as a result of oil production in six CEMAC countries. If the economic tendencies initiated are confirmed, the potential for development of the aviation industry is very high because airlines will have an important role.
Recommendations
63. In view of the importance of air transport in Central Africa, Governments should give priority to taking measures to reduce constraints and difficulties as follows:
a. Setting up Community institutions and reducing constraints that are essentially linked to the lack of financial and human resources, so as to give Community organs and national administrations the necessary means to allow them to carry out their duties;
b. Safety oversight: accelerating the setting up of regulations implementing the Civil Aviation Code and popularization of the code, as well as setting up the COSCAP project in the framework of the World Bank aid programme;
c. Modernizing and harmonizing national regulations and adapting Community implementation regulations to the liberalized market, with particular regard to safety oversight and national regulations relating to authorization of airlines etc;
d. Encouraging countries that have not taken national legislative measures to take
supporting measures, incorporating the text of the Decision at the national level, and to do so as soon as possible.
e. Harmonizing the CEMAC Agreement and the Community Civil Aviation Code and reviewing elements that are incompatible with the Decision, and popularizing the code;
f. Bringing to the attention of institutions responsible for following up the Decision, such as African Union, ECA, AFCAC, AFRAA and Regional Economic Communities (RECs), the problems encountered in order to find solutions.
g. Resolving preconditions to favour the establishment of a subregional airline, either by means of a merger, a joint operation or an alliance etc.
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