Regional Briefing - Africa & Middle East - January 2022

State of the Region:

Africa & Middle East

IATA Economics

January 2022

Contact: [e-mail]

1

Economics

GDP growth, exchange rates, oil & jet fuel price

• The trade-weighted US dollar (USD) index rose by 0.7% in December versus November on the back of recovering US economy and expectations about US Federal Reserve interest rate hikes in 2022.
• The ZAR was the weakest currency in the region in 2021, depreciating by nearly 10% against the USD, followed by the NGN (down 4.8%).
• Jet fuel and Brent crude oil prices fell sharply in early-December due to concerns about the impact of Omicron disruptions on global fuel demand. However, despite this year-end weakness, the average 2021 Brent crude oil and jet fuel price was 63% and 68% respectively higher than in 2020. Moreover, the prices started to rise again in recent weeks amid optimism that the Omicron impact will be short-lived.

GDP growth

% change on a yr ago	2020	Q1 2021	Q2 2021	Q3 2021
Saudi Arabia	-4.1	-2.6	1.9	6.8
Nigeria	-1.8	0.4	5.4	4.1
Egypt	0.0	1.6	7.2	9.3
South Africa	-6.4	-2.8	19.0	3.1
UAE	-5.9	--	--	--
Kenya	-0.3	2.0	11.6	10.3
Jordan	-1.6	0.3	3.2	2.6
World*		-3.5	2.9	11.6	4.7

Exchange rates

end of period, # per US$	% 2021 YTD	Oct-21	Nov-21Dec-21
US$ broad index	3.5%	114.1	115.0	115.8
Saudi Arabian riyal (SAR)	-0.1%	3.75	3.75	3.75
Nigerian naira (NGN)		-4.8%	413.8	413.8	413.8
Egyptian pound (EGP)		0.1%	15.7	15.7	15.7
Sth African rand (ZAR)		-9.5%	15.2	16.0	16.0
UAE dirham (AED)		0%	3.67	3.67	3.67
Kenyan shilling (KES)		-3.6%	111.3	112.6	113.2
Jordanian dinar (JOD)		0%	0.71	0.71	0.71

Oil and fuel price

US$/barrel (period ave.)	2021	Oct-21	Nov-21	Dec-21
Crude oil (Brent)	70.9	83.9	80.9	74.7
Jet fuel	77.7	95.6	91.8	87.1

2 Source: Refinitiv Eikon, S&P Platts

Purchasing Managers' Index

• Economy-widePMIs - a monthly indicator of economic activity - fell sharply in Saudi Arabia and South Africa amid concerns about the Omicron spread. However, while in the former the metric remained consistent with economic expansion (more positive responses in the PMI survey than negative), in the latter it indicated economic contraction in December. The PMI in the UAE remained at elevated levels thanks to positive impact of Expo 2020 and easing of COVID restrictions.

Purchasing Managers' Index - Economy-wide

50=no change, seasonally adjusted

65

60

55

50

45

40

35

30

2015	2016	2017	2018	2019	2020	2021	2022
		Saudi Arabia				South Africa			UAE

3 Source: Markit

Passenger market

• Air-travelrecovery continued in November ahead of the Omicron outbreak, but the traffic improvement was smaller than in the previous months. The industry-wide revenue passenger-kilometres (RPKs) fell by 47.0% versus November 2019, compared with a 48.9% contraction in October.
• African and Middle Eastern airlines reported similar rates of RPK decline, at 60.1% and 59.0% respectively versus November 2019. The recovery in both regions remained slow but gradual. The Omicron discovery led to a sharp fall in bookings from countries in southern
  Africa but the full impact on the Africa's traffic will be better understood in December data.

Revenue passenger-kilometres (RPKs)

% ch vs.the same period in 2019	2020	Sep-21	Oct-21	Nov-21
Region (registration basis)
Middle East	-72.1	-65.8	-59.2	-52.6
Africa	-68.2	-60.3	-56.8	-55.1
World	-65.8	-53.2	-48.9	-47.0
Routes (segment basis)
Middle East - Asia	-73.4	-74.6	-71.6	-66.9
Middle East - Europe	-72.8	-64.9	-54.8	-48.3
Africa - Europe	-68.5	-49.2	-40.7	-36.8
Middle East - Nth America	-70.6	-31.8	-24.1	-16.3
Africa - Middle East	-72.3	-48.7	-39.6	-39.1
Africa - Asia	-79.7	-91.5	-91.9	-92.2

Growth in passenger volumes (RPKs), by region

RPKs, % change vs. Nov 2019

Asia		Middle	Latin	North
Pacific	Africa	East	Europe America America Industry
			-27.5%	-18.8%
			-39.4%	-47.0%
	-55.1%	-52.6%
-69.8%

4 Source: IATA Monthly Statistics

Air cargo market

• Growth in industry-wide cargo tonne-kilometres (CTKs) slowed in November due to supply chain issues. CTKs were 3.7% above their November 2019 levels, after rising 8.2% in October versus October 2019.
• Cargo traffic flown by African airlines stabilized after a period of strong growth earlier in the year. African CTKs were 0.1% below 2019 levels compared with a 9.1% annual growth in October (downwardly revised).
• Middle Eastern airlines also faced a significant slowdown in their CTKs, with growth versus pre-crisis levels diminishing from 9.7% in October to 3.4% in November. The weakness was to some extent driven by the large Middle East-Asia trade routes.

Cargo tonne-kilometres (CTKs)

% ch vs.the same period in 2019	2020	Sep-21	Oct-21	Nov-21
Region (registration basis)
Middle East	-9.7	17.1	9.7	3.4
Africa	-13.8	13.3	9.1	-0.1
World	-9.9	7.6	8.2	3.7
Routes (segment basis)
Middle East - Asia	-6.3	21.3	14.7	8.0
		-17.3	1.1	0.2	-1.5
Middle East - Europe
Africa - Europe	-20.3	-11.0	-9.6	-6.8
Middle East - Nth America	-5.1	55.9	40.6	33.7
Africa - Middle East	-31.3	-8.3	-20.9	-22.0
Africa - Asia	9.0	36.8	25.5	12.5

Growth in cargo volumes (CTKs), by region

CTKs, % change vs. Nov 2019

					13.3%
		0.3%	1.1%	3.4%		3.7%
	-0.1%
-12.8%
Latin	Africa	Europe	Asia	Middle	North	Industry
America			Pacific	East	America

5 Source: IATA Monthly Statistics

*July data for African carriers not available at the time of publishing