Analysis of the relationship between air transport and economic growth in sub-saharan africa

Abstract

The economic role of air transport progressed over the past decades, following factors such as increased globalisation. Despite the economic importance of air transport, Sub-Saharan Africa (SSA) lagged behind other regions concerning air passenger traffic and freight levels. This may inhibit the region’s economic growth. While literature shows that air transport can stimulate economic growth, this has been lacking in SSA and how the relationships differ in the short-run and long-run. The direction of causality between air transport and economic growth also remained questionable. This study investigated the short-run and long-run relationships between air transport (air passenger traffic and air freight) and economic growth in SSA using the autoregressive distributed lag model (ARDL) and Dumitrescu Hurlin Panel Causality approach. The findings show a bi-directional causality between air transport and economic growth. Air passenger traffic showed a positive long-run effect, whereas air freight suggested a negative long-run effect. Economic growth improves both air passengers and freight in the long-run. There was no evidence of short-run effects. A bi-directional causality implied that air transport and economic growth could be influenced simultaneously. These findings are paramount to the effective implementation of aviation and growth strategies.