If you’ve ever thought airlines had a smooth glide through the African skies, think again. Operating an airline on this continent is like flying through a perfect storm of taxes, exchange controls, and currency quirks. Fasten your seatbelts and brace for some unexpected (but entertaining) turbulence as we take a look at the not-so-friendly skies of African aviation. Before you even take off, do you have permission to operate the route (which will be easier if there is a Bilateral Air Service Agreement (BASA) with your home country), will you be able to buy fuel at the destination and how much will it cost, or does the destination government have “interesting” ideas such as complaining about the type of aircraft used or that “their” airline can’t get airport slots?
The Take-Off Tax Tango: Landing Fees and Levies Galore
You might think an airline’s biggest challenge is making sure passengers don’t lose their luggage, but in Africa, the real challenge begins before the wheels even touch the runway. Airports across the continent often greet airlines with a warm hug of landing fees, passenger levies, and fuel taxes that make the cost of each trip soar higher than the plane itself. From Nigeria’s “You Land, You Pay” policy to Kenya’s “Surprise Surcharge of the Month,” airlines need more than just a good pilot—they need a tax lawyer in the cockpit. Some of these are taxes on the airline, some are imposed on the passengers but must be collected by the airline, and others are called fees or charges but look and feel like taxes.
It’s no wonder ticket prices are sky-high. Some airlines joke that they need a separate spreadsheet just to keep track of all the taxes they’re paying… if only that spreadsheet didn’t get hit with a VAT charge, too.
Exchange Controls: The Sky Ain’t The Only Limit
Exchange controls in Africa can make you nostalgic for the simplicity of a Sudoku puzzle. Imagine trying to repatriate funds from ticket sales back to headquarters and hitting a wall of regulations taller than Mount Kilimanjaro. In Nigeria, Angola, or Zimbabwe, airlines face exchange control restrictions that can freeze revenues in local currency, making them the world’s most unlikely collectors of “exotic currency reserves.” Especially when a country discovers or decides it has no forex to give you. Airlines have been struggling to extract funds from Angola, Eritrea and Malawi among others. Nigeria was holding up an alarming USD 783 million in August 2023, but most of this has now been released, with a huge exchange loss for the airlines. This happened after Emirates suspended flights to Nigeria due to the level of funds blocked in the country.
One airline CEO famously quipped, “We’re in the aviation business, but I feel like I’m running a currency museum.” When you’re holding millions in Nigerian naira or Zimbabwean dollars that you can’t convert or repatriate, you start considering some extreme measures, like paying your international pilots in chickens or bartering spare parts for jet fuel.
Currency Roulette: Flying High in a Free-Falling Market
While fuel prices might fluctuate, nothing keeps airline CFOs up at night quite like the roulette wheel of African currencies. With every take-off, they’re betting on the exchange rate not crashing before the plane lands. Some days, the South African rand’s rollercoaster ride can make turbulence feel like a gentle breeze. In countries like Ghana or Zambia, currency devaluation can happen so fast that by the time passengers deplane, their airline ticket costs as much as a Big Mac. An internal memo from an airline finance team once joked, “At this rate, the best hedge against devaluation might be teaching our pilots to trade forex during long-haul flights.”
Double Taxation: When One Government Isn’t Enough
Let’s not forget double taxation treaties—or the lack thereof. Some African countries haven’t quite gotten around to signing agreements with each other, leading airlines to pay tax on the same income twice, like an unwelcome encore performance of that annoying safety video. It’s the kind of scenario that leaves tax advisors shaking their heads and reaching for their calculators, wine, or possibly both. Even when there is a double taxation agreement, it may not prevent the destination from imposing tax, if it allows a country to impose tax on “liftings” (that is the revenue for taking passengers or cargo out of a country). As examples, airlines from Cote d’Ivoire, Ghana and Togo should not suffer this liftings tax in Nigeria, due to the ECOWAS double taxation agreement, and Qatar Airways is exempt from tax on profits from operating international flights to and from Ghana, but it is taxable in Nigeria. When the Double Taxation Agreement between Qatar and Nigeria becomes effective, the Nigerian tax will be limited to 1% of “liftings”, because no Nigerian airline flies to Qatar. It seems that South African Airways is exempt from tax in Nigeria because a Nigerian airline operates on the route between Nigeria and South Africa.
Just imagine: you’re trying to explain to your board why you’re paying income tax in two jurisdictions, and all you can think of is, “Well, at least it’s not three.”
VAT on Everything: Because Why Not?
Value-added tax seems innocuous enough until it sneaks up on you at every turn. From catering services to maintenance costs, VAT is always there, lurking in the background like that chatty passenger who doesn’t understand the concept of noise-cancelling headphones. Sometimes it’s refundable, but more often, it’s just another cost of doing business in the skies above Africa. Some airlines joke that VAT stands for “Very Aggressive Tax,” and they’re not wrong. It’s relentless and doesn’t care if your business class seats are half-empty or if your in-flight meal is a dry sandwich that no one ordered.
Final Approach: The Mile-High Tax Club
So, what’s the solution for airlines navigating this financial storm? Innovative structuring, a crack team of tax advisors, and a lot of deep breaths. African aviation is not for the faint-hearted, but for those who can dance around the taxman, survive exchange controls, and juggle a dozen currencies, there’s always a way to keep flying.
Just remember: the next time you’re on a bumpy flight across Africa, it’s not just the weather causing turbulence—it’s probably the tax authorities, too. Safe travels, and may your taxes be low, your exchange rates steady, and your VAT refunds quick… though we can only dream.
English 
French