Aviation

Aviation stakeholders have called for a review of the compulsory contribution of 40 per cent of aviation agencies’ revenue to the federation account.

This was contained in a communiqué issued at the end of the second edition of the Federal Airports Authority of Nigeria Conference held in Abuja.

The Managing Director of the FAAN, Capt Rabiu Yadudu in his presentation on “Sustainability of the aviation industry in Nigeria: The Airport Operators’ Perspective”, stated that the agency contributed about N44bn of its revenue to the federation account in 2022.

Yadudu said, “Talking about government policy, right now, we have 40 of our revenue being deducted at source. Finance is about 99 per cent of the challenges we are facing in the industry. Last year, about N44bn of our revenue went to the federation account. The price of diesel has increased to N1,150 per litre from N400 we were buying it about a year ago.

“Now, we have our own Act. With this, FAAN should not be sending any percentage of its revenue to the federation account.”

Recall that in October 2022, the Federal Government increased the compulsory contribution to the federation account by its revenue-generating agencies to 40 per cent from 25 per cent.

However, the participants at the conference identified debt, financing, and the environment, among others, as fundamental issues affecting sustainable development in the aviation industry.

According to the conference’s communiqué, after extensive discussions, the conference resolved that government policies should be designed to be a major economic enabler and catalyst to sustainability in the aviation industry.

 “Government policies should be designed to be a major economic enabler and catalyst to sustainability in the aviation industry.

“One policy identified as a major clog to sustainable development is the 40 per cent TSA deduction policy by the Federal Government, which needs to be reviewed as it is against international standards and practices, and provisions of the FAAN Act,2022,” the communiqué disclosed.

The communiqué further stated that FAAN as an airport operator needed to diversify its sources of income from aeronautical to non-aeronautical streams of revenue and as an assets’ manager, while ensuring that its assets yield maximum return as the majority of its land mass across all the airports are currently suboptimally utilised.

“FAAN should show exceptional leadership in the airport management model and lead all other stakeholders in the operational process, negotiations, and coordination of related activities that will advance the sustainable aviation development process.

“Stakeholders’ engagement is crucial to airport planning. FAAN should, therefore, ensure that stakeholders’ requirements are factored into the airport master plan,” it averred.

It also urged aviation stakeholders to identify, understand and support each other for sustainability to be achieved in the industry.

The Infrastructure Concession Regulatory Commission (ICRC), says the Federal Executive Council (FEC) has approved the establishment of an Aviation Leasing Company (ALC) under a Public Private Partnership (PPP).

This is contained in a statement issued by Ifeanyi Nwoko, Acting Head, Media and Publicity, ICRC on Wednesday in Abuja.

Nwoko said the approval was in a bid to inject private sector funds into infrastructure development and boost the nation’s economic growth.

He said FEC also approved the development of an Electronic Civil Registration and Vital Statistics System (eCRVS), a platform that would effectively keep electronic records of births and deaths registrations.

Nwoko said both approvals were given following the issuance of Full Business Case (FBC) compliance certificates by ICRC, the agency statutorily established to regulate PPPs.

He said the ALC, which would be executed by Messrs AJW Consortium as concessionaires, seeks to provide an opportunity for local leases of aircraft to both domestic and international carriers.

“It will also alleviate the problems of aircraft/engine leasing, costly lease rates, and high insurance premium charges to Nigerian airlines.

“It will facilitate the ease of doing business for foreign lessors with Nigerian domestic airlines being a one-stop-shop thereby limiting capital flight and the strong demand on forex,” he said.

Nwoko said the ALC would provide leasing opportunities for Nigerian and African Airlines to boost their fleet size and alleviate the problems of aircraft leasing and high insurance premium charges.

He said it would also provide an alternative to foreign lessors and introduce competition which would relax the terms and conditions currently obtainable, thereby facilitating growth and development.

Nwoko said the project would also create employment opportunities for Nigerians which would have a multiplier effect on the economy.

” The ALC will commence with leasing eight aircraft in its first year of operation.

” The portfolio will increase as it grows to 50 leased aircraft after the seventh year and remain constant at 70 leased aircraft by 2034.

“The ALC then starts to purchase aircraft outright (instead of lease) after approximately seven years, once the portfolio exceeds 50 leased aircraft,” he said.

He said the project was approved with the Federal Ministry of Aviation as grantor.

Nwoko said for the eCRVS N5.3 billion private sector fund would be injected by the concessionaire, Messrs Barnksforte Technologies while the National Population Commission would be the project grantor.

Nwoko said the project seeks to capture and verify births and deaths in Nigeria and provide attestation and verification of certificates to end users on the platform.

“Prior to this, these registrations have been carried out manually, a process that has been characterised by low coverage and inadequate data.

“The private party will Design, Finance, Build, Operate, and Transfer the Project to the government at the end of the concession period of 15 years.”

President Muhammadu Buhari says Nigeria will continue to make significant investments in the provision of aviation infrastructure for safe, secure, environmentally friendly and sustainable economic development of international civil aviation.

The president made the commitment on Tuesday in Abuja when he received in audience the President of the International Civil Aviation Organisation (ICAO), Salvatore Sciacchitano, on Wednesday in Abuja.

While recalling the long history between Nigeria and ICAO, the president declared:

“Nigeria has been a member of the International Civil Aviation Organisation (ICAO) since 1962, and has continued to make valuable contributions to the ICAO Council’s work and it’s activities.

“This country has been playing key role in supporting the implementation of ICAO Policies and Programmes internationally, and particularly in the African region.

“To this end, Nigeria has ratified all international air law instruments like the Montreal Protocol and amendments to some articles of the Chicago Convention.”

Buhari told his guest that Nigeria was championing the cause of Aviation safety, security and facilitation in Africa.

“I have recently signed into law Civil Aviation Act 2022. This is to reposition the industry to ensure continuous compliance with ICAO standards and to meet the challenges of a dynamic and rapidly growing air transport sector,” he said.

The president assured the ICAO President that “aviation industry in Nigeria is increasing by leaps and bounds.”

“I have approved also the establishment of Aviation and Aerospace University in Abuja to cater for research and development in the sector as well as the managerial challenges.

”In this regard, Nigeria has already started receiving the support of ICAO members like Qatar under the No Country Left Behind Initiative,” he noted.

The president expressed confidence that the aviation sector in Nigeria would continue to grow.

Buhari affirmed “the roadmap of the Ministry of Aviation superintended by Sen. Hadi Sirika, is on course and together with other reforms of this administration will be sustained.”

While congratulating Mr Sciacchitano on his re-election as President of the ICAO Council for the second term, Buhari also appreciated the support Nigeria had enjoyed under his leadership.

This, according to him, culminated in Nigeria’s re-election during the 41st Session of the ICAO Assembly.

The Nigerian leader informed the ICAO President that the aviation sector under this administration had more than doubled, noting that “It became the fastest growing of our  pre-COVID economy, according to the National Bureau of Statistics (NBS).”

Buhari also said that passenger numbers were raised from 8 – 30 million.

He said: ”The five new airport terminals Heave added 50 million passengers to our capacity. All these within the time we are in government, namely seven and half years.”

In a brief remark, the Minister of Aviation, Sen. Hadi Sirika had informed the President that the ICAO Air Services Negotiation (ICAN) event was being hosted by the Nigerian Civil Aviation Authority.

According to him, the event “will provide states, either on-site or participating remotely, with a central meeting place to conduct bilateral, regional or plurilateral air services negotiations and consultations.

”Similarly, there will be networking opportunities for policy makers, regulators, air operators, service providers and other stakeholders.”

Buhari expressed delight at the post-COVID recovery of the country’s aviation sector, describing it as the second best in the world.

The ICAO President, told Buhari that the meeting offered an opportunity of interaction between the participants from about 160 countries and the Civil Aviation Authorities in the country.

According to him, more than 4,000 agreements are being signed by way of bilateral agreements.

The Minister of Aviation, Hadi, Sirika, has stressed the need for private investment in the aviation sector to ensure efficiency and growth in the sector.

Sirika said this on Tuesday in Abuja, at a two-day Africa Public Private Partnership Network (AP3N) Investment programme, with the theme, “Financing Africa’s Infrastructure through PPP.

The programme was organised by the Infrastructure Concession Regulatory Commission.

The minister, represented by Mr Akin Olateru, Commissioner and Chief Executive Officer, Accident Investigation Bureau, said the ministry had commenced the implementation of an Aviation Roadmap to attract private capital and expertise.

He said the private capital and expertise would help to establish, operate and maintain aviation-related business and infrastructure needed for the actualisation of the potential of the Nigerian aviation industry.

Sirika said that as part of the ministry’s proposed pipeline, the following projects that had been rolled out included the concession of airports, establishment of a national carrier, and creating Gross Domestic Product (GDP )growth and jobs.

He said others were the establishment of an aviation leasing company, the establishment of a maintenance, repair and overhaul centre, the development of airport cities (Aerotropolis) and the development of cargo/agro-allied airport terminals.

Sirika said other additional projects being developed by the ministry included airport upgrade, safety and security and commercialization, improvement of CNS systems and capacity building, and enhancing training capability.

Other he said were the designation of the airports as free zones, establishment of an aerospace and Aviation University, and upgrade of aviation search and rescue unit.

According to him, upon implementation of the roadmap, it is estimated that 72,300 jobs will be created, that is 9,100 direct jobs and 63,200 indirect jobs within three years and with twenty aircraft.

“In implementing this road map with private sector participation, the potentials and opportunities abound especially in job creation and infrastructural development which in turn attracts foreign investment and ease of doing business in Nigeria.”

The minister said the government must make the process simple for private investors to nurture and grow.

He however, said that the government needed to get the process right so that the benefits of the partnership could be harnessed.

“If we do not get the process right, we lose the value. It is a huge task but we must do it.”

The News Agency of Nigeria(NAN) reports that the AP3N is a network of Public Private Partnership (PPP) units and practitioners across the African Continent.

It was established out of a greater realisation and consensus of the need for collaboration between African PPP units for the achievement of Africa’s infrastructure development.

The network is designed to serve as a knowledge and experience-sharing forum to upscale the learning curve of PPP public officers at the continental level of government.