Africans want to travel to other parts of Africa, and African businesses want to do business with other African businesses, but the reality is that this is not as simple as it sounds.
Time and time again at African hotel-investment conferences, audiences hear that intra-African flight corridors are not what they could be and that travel often requires a change of planes — and even airlines — to go from one country to another.
In some cases, it is even easier to fly to Europe from Africa to go to another African country.
Published last week in a draft state was the Pan-African Private Sector Trade & Investment Committee’s 2026 PAFTRAC Africa CEO Trade Survey, which showed that 81.3% of senior executives expected their cross-border activity to expand over the next 12 months.
That is the desire, at least.
Hoteliers follow such trends in deciding where to put their flags above the door.
Follow the money, in other words.
News publication African Business states that “at the centre of [Africa’s] structural gap sits a financing barrier that goes beyond access to capital. African sovereign and institutional borrowers consistently attract risk ratings from Western credit agencies that, according to [International Finance Corp.] analysis, impose an estimated excess premium of $31 billion annually.”
That is a huge hurdle to jump across, according to the publication.
Patrick Utomi, PAFTRAC’s chair, is blunt in his commentary.
"The core issue is risk perception, or what many of us call a prejudice premium," he said. “When capital is priced so that an economy actively at war receives more competitive financing than a stable, peaceful African sovereign, the system is misreading reality. Outdated global rules and subjective rating methodologies are imposing a direct tax on African trade.”
The IFC estimates that Africa’s small- and medium-size enterprise financing gap — the difference between what business needs in terms of capital and what it receives — stands at more than $331 billion.
In a recent episode of CoStar News Hotels' podcast "The Upgrade: EMEA Hospitality News," David Damiba, managing partner and co-CEO of Johannesburg-based Kasada Capital Management, said one trick is to develop scale.
“When you have scale, you can have really interesting conversations, not only with local lenders — meaning the larger banks in those individual countries — but also regional lenders and pan-African lenders. We have these three layers already, and above that layer you also have the development-finance institutions ... who are interested in participating in funding that sector due to its impact on tourism," he said in July.
To his point, domestic and pan-African banks and credit facilitators are stepping up to redress the issue, but it is a task requiring patience.
For hotels, these numbers often mean that initial pipeline — the desire — translates into much-reduced supply — the reality.
The numbers must make it harder for pipeline hotels to reach ribbon-cutting ceremonies.
This business environment might produce opportunities for domestic branded-hotel firms but also international ones.
Conversions and mixed-use developments might offset risk.
This is not a new story, but it bodes well to be reminded of it.
The full report is due later this month.
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