Across East Africa, countries are engaged in a new race – building modern airports. One of the most ambitious projects is in Ethiopia, where the country is building the Bishoftu International Airport (BIA) at a whopping $12.5 billion.
Located around 40 kilometres from the capital, Addis Ababa, BIA’s groundbreaking ceremony was held in January 2026, with completion expected by 2030.
BIA is an ambitious project due to its scale and expected passenger numbers, which dwarf those of existing airports across the continent, including Africa’s busiest, Cairo International Airport. It is also backed by Africa’s strongest airline, Ethiopian Airlines.
The airport will be built in phases, with the first phase featuring two runways capable of handling 60 million passengers annually.
In comparison, Kenya’s Jomo Kenyatta International Airport (JKIA), currently the biggest and busiest in the region, has one runway. According to Kenya’s Ministry of Roads and Transport, JKIA handled around 8.93 million passengers annually.
When complete, BIA will have four runways, handling 110 million passengers annually.
The airport is primarily funded through Ethiopian Airlines’ equity and international debt. The airline is funding 30 per cent of the project, while the African Development Bank is coordinating the remaining funds from financiers.
BIA stands out due to its sheer scale and the fact that it is backed by Africa’s strongest airline.
Nairobi’s upgrade path
Approximately 1,166 km south-south-west of Addis Ababa, Nairobi is taking a different approach by upgrading the existing JKIA.
According to the Ministry of Roads and Transport, the airport faces significant congestion during peak operating hours across its runway, passenger terminals and apron areas.
The planned works include upgrading the existing runway, building a parallel runway with new rapid-exit taxiways, expanding the existing passenger terminal, and constructing a new terminal capable of handling 10 million passengers annually.
The Kenya Airports Authority will also modernise passenger processing systems, upgrade aprons and support infrastructure, improve access roads and parking, and develop an airport city and special economic zone.
The upgrades at JKIA will be primarily funded through a state-led funding model, partly using proceeds from the privatisation of government-owned enterprises, airport user fees and the National Infrastructure Fund Framework. The project is expected to cost around $1.2 billion.
Kenya Airways remains the main driver of demand at JKIA, and the hope is that better facilities will help Nairobi maintain its position as the region’s business gateway even as Addis Ababa pulls ahead on capacity.
Uganda’s terminal push
Across the border, the Uganda Civil Aviation Authority is set to commission a new passenger terminal at Entebbe International Airport.
The new international passenger terminal aims to ease congestion and increase passenger handling capacity to 3.5 million travellers annually.
The authority’s Deputy Director General, Olive Birungi Lumonya, said Entebbe’s upgrades are part of Uganda’s broader efforts to modernise the country’s aviation infrastructure.
Just recently, Uganda Airlines purchased eight Boeing jets.
Funding is provided through national budget allocations, supplementary borrowing and multilateral development bank funding.
Rwanda and Tanzania join in
Rwanda and Tanzania show the same push for better airports.
In 2019, Rwanda teamed up with Qatar Airways on Bugesera International Airport, about 40 kilometres south of Kigali. The whole scheme is tagged at around $2 billion and runs mostly as a public-private partnership. Qatar Airways takes the big slice at 60 per cent. Phase one should move seven million passengers a year; phase two is meant to double that.
Tanzania has been busy too. The government upgraded Julius Nyerere International Airport in Dar es Salaam and Kilimanjaro International Airport up north, while Air Tanzania took on new Boeing 787s and Q400s to stretch its network.
A study in the African Development Finance Journal looked at data from 1990 to 2024 with straightforward regression analysis. It found that passenger numbers, cargo volumes and money spent on airport infrastructure all add a clear lift to Tanzania’s GDP.
Better air links also feed tourism to places like Kilimanjaro, Zanzibar and the Serengeti, and they help move high-value exports such as flowers, fruit and medicines.
These publicly paid-for upgrades cut the usual bottlenecks and spread benefits through tourism and logistics. Still, the gains only really stick if the policies stay joined up.
From these projects, East African governments appear convinced that whoever controls the skies will also control a significant share of the region’s future economic growth.
Airlines power the push
National carriers are the engines behind these expansion plans.
Ethiopian Airlines has established itself as Africa’s largest and most successful airline, with a strong reputation for its extensive route network, modern fleet and consistent performance. Recent industry rankings also place it among the continent’s leading carriers for service quality, operational scale and global connectivity.
Kenya Airways is fighting to remain relevant as a regional hub carrier.
Uganda Airlines, Air Tanzania and RwandAir are all expanding their fleets because without those additional flights, the new terminals and runways risk being left underused.
What bigger airports deliver
Airports in Africa do more than move planes. They shape how the continent connects to global markets. Better air links bring tourists and foreign currency. East African Community data put tourism’s average contribution to member states’ GDP at roughly 10%.
Upgraded terminals cut travel times and improve access. Air transport already handles a large share of international arrivals. More visitors fill hotels, keep restaurants busy and create jobs well beyond the airport fence.
In places like the Kenyan coast or the Serengeti, that extra traffic means lodges stay booked longer, and local guides pick up more work during the high season. Farmers selling fruit and vegetables to airport caterers also see steady orders instead of the usual stop-start demand.
Improved connectivity also draws foreign investment. The Air Transport Action Group notes that a 10 per cent rise in airport connectivity can lift foreign direct investment FDI by about 4.7 per cent in emerging markets and nudge regional GDP up half a point.
Companies looking to set up regional offices or assembly plants often check flight options first. A reliable hub makes it easier for managers to fly in for short visits and for spare parts to arrive on time.
Cargo matters just as much. Flowers, vaccines and electronics cannot wait for slow roads. Modern facilities cut delays and spoilage by helping help exporters move high-value goods more smoothly. Cold-chain sheds and faster customs clearances mean Kenyan roses reach European markets fresher and Ugandan pharma products keep their shelf life. That reliability turns occasional orders into regular contracts.
Reliable air links connect African markets to the world, lower trade barriers and support diversification beyond commodities.
AfCFTA and SAATM raise demand
The African Continental Free Trade Area (AfCFTA) and the Single African Air Transport Market (SAATM) are two key projects under the African Union’s Agenda 2063 that raise the pressure for modern aviation infrastructure in East Africa.
They work together to link Africa’s economies more tightly. AfCFTA removes tariffs and opens markets for goods and services. SAATM opens the skies so planes can fly freely and connect those markets in practice.
The United Nations Economic Commission projects AfCFTA could lift intra-African freight demand 28 per cent by 2030. Air freight tonnage may roughly double. High-value goods will need more capacity, cold storage and faster turnarounds.
SAATM strips away old bilateral limits. Studies show possible traffic jumps of 51 per cent or more across the continent, with higher frequencies and new city pairs.
Nairobi, Addis Ababa, Kigali and Entebbe would need longer runways, larger terminals and better cargo sheds. The two schemes reinforce each other. More flights make freer trade practical.
What are the risks of airport upgrades?
Large infrastructure projects carry clear risks of debt, under-use and weak returns. Governments often borrow in dollars or euros while revenues arrive in local currency. Traffic forecasts frequently prove too optimistic.
Rwanda’s Bugesera airport, for instance, has drawn IMF warnings that it could push public debt to 86.3 per cent of GDP by 2026 and raise debt-service costs. Extra budget cash only tightens the squeeze.
Roughly 70 per cent of Ethiopia’s BIA project is expected as debt. Analysts flag the danger if passenger numbers grow slower than planned.
Uganda’s earlier Entebbe upgrade used a Chinese Exim Bank loan that locked airport revenues into priority repayment for two decades and required escrow collateral the lender could seize. The same pattern appears outside aviation.
Kenya’s Standard Gauge Railway, built largely with Chinese loans of several billion dollars, has run below capacity for years. Cargo volumes stayed well under design levels, operating losses mounted, and debt servicing still costs the country heavily each year, sometimes more than $1 billion annually.
Ethiopia’s Addis Ababa-Djibouti railway faced similar trouble. Chinese financing covered most of the roughly $5 billion cost. Traffic fell short of forecasts, currency mismatches hurt, and repayments had to be stretched from 10-15 years to 30 years after early shortfalls.
Zambia borrowed heavily for roads, power plants and other infrastructure. The resulting debt load helped push the country into default in 2020. China was among the largest creditors; interest payments squeezed spending on health and other services.
Ghana’s power sector offers another caution. Take-or-pay contracts with independent producers and resource-backed loans for dams, gas plants and roads left the government paying for electricity that went unused. The burden contributed to the wider debt crisis and forced multi-billion-dollar rescues of the energy sector.
If the extra traffic from AfCFTA and SAATM arrives as projected, East Africa’s new airport capacity can generate returns. If volumes stay lighter, currency gaps widen or costs overrun, the region risks the familiar outcome: expensive facilities that under-perform while the debt clocks keep running.
Who stands to benefit from the airport expansions?
As Martha Kwamboka, flight pursuer, put it to OAT-East:
“If the investments succeed, airlines will benefit from expanded networks, businesses will gain more efficient logistics, and travellers could enjoy lower fares, more direct flights and improved airport services.”
The biggest winners start with the airlines themselves. Ethiopian Airlines stands to gain the most from the massive BIA project, which is built around its already strong network and aims to turn Addis into a true global hub.
Kenya Airways and other carriers at JKIA would get relief from congestion and room to add routes. At Bugesera, Qatar Airways holds a large stake and will use the new airport as a base for more East African connections, while RwandAir could finally expand without the limits of the current Kigali facilities.
Businesses come next. Exporters of flowers, coffee, tea, pharmaceuticals and fresh produce need fast, reliable air cargo. Better terminals with cold storage and quicker turnarounds cut losses and open more markets under AfCFTA. Logistics firms, freight forwarders and manufacturers that rely on just-in-time deliveries also stand to save money and reach customers faster across the continent and beyond.
Travellers benefit through more choice. More city pairs and higher frequencies under SAATM should bring lower fares, shorter journeys and fewer forced stopovers. Business travellers get easier access for meetings and site visits. Tourists heading to safari destinations or beach resorts gain direct flights and smoother arrivals.
Local people near the construction sites and airports see direct jobs first. Building these terminals employs thousands of workers for years. Once open, ground handling, security, retail, cleaning and maintenance create steady employment. Tourism operators including hotels, tour companies, restaurants and transport services gain from higher visitor numbers. Farmers and small traders who supply the airports and surrounding areas also pick up extra demand.
Governments and national economies sit at the centre of the strategy. More traffic means higher landing fees, passenger taxes and concession revenue. Stronger connectivity draws foreign investment, supports trade growth and lifts tourism’s contribution to GDP.
Even secondary cities and remote areas can gain if smaller airports improve and new routes open. Better air links make it easier to move people and goods to places that roads still struggle to serve.
East African governments are pouring money into these projects because they view aviation as a clear driver of tourism, trade and economic competitiveness. Whether the expansions deliver lasting benefits or turn into white elephants will depend on actual traffic growth, how well the airlines perform, and whether AfCFTA and SAATM reforms are fully put into practice.
