Appraising Buhari’s performance in aviation sector
Industry stakeholders had high hopes in the administration of President Muhammadu Buhari when he appointed an aviator as Minister of Aviation. The hope was further elevated when the government introduced the aviation road map, which aimed at marking a turning point in the sector. But such hope gradually dwindled as the years passed by.
The administration of President Muhammadu Buhari may have achieved so much in the aviation industry but he may not have satisfied the expectations of industry stakeholders who can now judge his achievements with the projects and programmes it enunciated in the aviation road map.
But beyond that grand plan, there are some accomplishments, which came with sequential progress enabled by continuous funding like the four new airport terminals at the four international airports in Abuja, Lagos, Port Harcourt and Kano, in addition to the new terminal facility in Enugu. So far, these terminals are on stream except that of Enugu, which is almost at 90 per cent completion.
The administration’s accomplishments will also include the rehabilitation of the Nnamdi Azikiwe International Airport, Abuja runway, which became a death trap but for the timely intervention of the Minister of Aviation, Senator Hadi Sirika, who finished work at the runway in record time before the projected date of completion.
Domestic airline operators cannot stop giving kudos to the Buhari’s administration, which installed airfield lighting at the domestic runway (18L) of the Murtala Muhammed International Airport, Lagos, which was literally in darkness for about 14 years. The lighting of the facility saves airlines over N1 billion a year on the fuel burnt taxing from the international runway (18R) to domestic terminals at the General Aviation Terminal (GAT) and MMA2. The languid movement of aircraft from the international runway to the terminals could gulp over eight gallons of fuel, according to industry insiders.
During this period also the federal government granted a seven per cent tax waiver on imported aircraft and spares into Nigeria for the airlines. Domestic operators remain grateful for the quick response of the President who made it possible.
Funding Airport Terminals
There are many achievements recorded by this administration, especially the completion of the terminals started by the previous administration, which it continued to fund until they were completed. It has to be noted that more money was expended on the new terminals than was initially projected because of the inherent technical errors on the projects.
Also under the current administration, Nigeria successfully hosted many international conferences, including the ICAO World Aviation Forum (IWAF) in 2017, the 7th Edition of Africa and Indian Ocean (AFI) Week in December last year and the full representation and significance presence of Nigeria in many strategic aviation events in the world.
The Aviation Road Map
In his maiden media meeting in Lagos as the then Minister of State for Aviation in 2016, the Minister of Aviation, Senator Hadi Sirika, unveiled his plan for the aviation industry under the Buhari administration. Sirika became substantive Minister in 2019, although he was fully in charge of the aviation sector when he was appointed Minister of State at the beginning of the Buhari’s administration in November 2015. He promised to revamp the industry by implementing some critical programmes and projects that would elevate the sector and make it globally competitive. He raised a lot of hopes because he came in with invaluable portfolio as an aviator.
Also in the same 2016, he met with industry stakeholders in Lagos and reiterated Buhari’s progamme, which the stakeholders welcomed with so much enthusiasm. Chief among Buhari’s programmes in aviation was the establishment of national carrier, the concession of four major airports in the country, the establishment of aircraft leasing company; the establishment of Aerospace University, the establishment of Maintenance, Repair and Overhaul (MRO) facility and the establishment of agro-cargo airport.
There have been visible efforts in the actualisation of some of the programmes but there are some that are not so discernible, which include the establishment of agro-cargo airport, establishment of MRO and establishment of a leasing company.
One of the programmes that was popular among Nigerians and which evokes so much nostalgia among those who witnessed the exploits of Nigeria Airways Limited (NAL), was the establishment of a national carrier. The federal government followed the process and when it was unveiled last year, the initial ownership structure was that the preferred bidder and technical partner, Ethiopian airlines would own 49 per cent, a consortium of three Nigerian investors: MRS, SAHCO and other institutional investors would own 46 per cent, while the federal government would have 5 per cent. Maybe this ownership structure may have been tinkered with since the unveiling last year, but the partners were expected to invest $350 million into the project.
Many Nigerians were interested in the project because the country needed a major carrier that could compete globally, and over the years no domestic airline has grown to become a major competitor on major international routes, a problem attributed to government and partly to the airlines, but Nigerians hoped that the planned national carrier would break that jinx.
However, on November 19, 2022, AON filed an originating summons against the federal government for the establishment of a new national carrier after the liquidation of Nigeria Airways. AON had prayed that the court look at the extant laws and interpret such to know if the processes to start a new national carrier were not in violation of the laws of the Federal Republic of Nigeria.
The AON had urged the court to stop the national carrier deal and withdraw the Air Transport Licence (ATL) already issued to Nigeria Air by the federal government through the Nigerian Civil Aviation Authority (NCAA).
One major grouse against the establishment of the airline was that government gave it waivers and concessions, including tax regime that gave it undue advantage over existing domestic carriers. Industry observers alleged that it was as if government was determined to use it to force existing airlines into extinction.
Marketing and PR strategist who is also aviation analyst, Sindy Forster, said the establishment of the national carrier would jeopardize the business of Nigerian airlines because the Ministry that is supposed to protect them has established an airline that would compete with them.
“You tell airlines all is well for them to operate in this environment. Then you enter the business (Nigeria Air) as a competitor and then adapt the landscape with policy changes, waivers and all sorts of advantages for your own business, which is now competing with the businesses (other domestic airlines) you were supposed to support. How does that make sense to any right thinking person,” she asked.
On the level of the actualization of the Aviation Road Map, she said: “Aviation cannot be neatly packaged into four year or even eight year cycles. A strategically driven industry is often planned 10 to 30 years in advance. That way you can coordinate the projects in a way, which makes sense consecutively and logically. Trying to do all at once without the wherewithal and experience of delivering consecutive projects was a mistake. They tried to do too many things, in the wrong order, and without the right inputs. It would have been more of a surprise had they succeeded in all being delivered during this time.”
Concession of Airport Facilities
In October last year the federal government unveiled the Request for Proposals (RFP) phase of the Nigeria Airports Concession Programme (NACP), which came to a close on September 19, 2022 and saw the emergence of preferred and reserve bidders for three out of four airports and cargo terminals as approved for concession under the programme.
According to Sirika, the outcomes of the RFP evaluation phase were as follows: “The preferred bidder for the Nnamdi Azikiwe Internationa! Airport (NAIA), Abuja, is Corporacion America Airports Consortium. ENL Consortium has also been selected as the reserve bidder for NAIA. The preferred bidder for Murtala Mohammed International Airport (MMIA), Lagos, is TAV/NAHCO/Project Planet Limited (PPL) consortium. Sifax/Changi Consortium has also been selected as the reserve bidder for MMIA.
“The preferred bidder for Mallam Aminu Kano International Airport (MAKIA), Kano, is Corporacion America Airports Consortium. There are no reserve bidders for MAKIA as at the time of this announcement.”
The Port Harcourt International Airport (PHIA), Port Harcourt, did not receive any proposal as of the RFP deadline.
“The Federal Ministry of Aviation reminds all stakeholders that this is a multistage process and as such this is not the final outcome of the NACP programme. The next stage of the programme is the negotiations and due diligence stage, during which the federal government will invite preferred bidders to enter detailed negotiations with its representatives, with a view to developing a Full Business Case (FBC) before onward transmission to ICRC for review and approval.”
Commenting, the Managing Director of Flight Logistics Solutions Limited, Amos Akpan, said the Buhari’s administration had excellent ideas and that if they were well implemented, they would have put the aviation industry in enviable pedestal.
“The projects outlined in the beginning of this administration by the Honourable Minister of Aviation were appropriate to give growth direction for the aviation industry in Nigeria. My observation at this time is that there were no thought-through agenda to enable the realisation of these projects within eight years. Also, we need to realise that to grow out of where we are, we need to be clear what projects to undertake, clear on the outcomes, and engage transparent and accountable processes through the implementation phases,” Akpan said.
Akpan further said as the Minister would be winding down, “I cannot clearly explain the ownership structure and equity shareholding of the Nigeria Air to young adult Nigerians who themselves are midway into their careers. I cannot clearly explain the concession of the airports. Are the private participants going to also manage and operate the aviation security, the aeronautical services, and the airside facilities of the airports? What will be the expected status of MMIA (Lagos, NAIA (Abuja), MAKIA (Kano), 10 to 15 years from the date of takeover by the concessionaires?”
On Aerospace University, he said NCAT had been producing certified skilled manpower for the aviation industry in Nigeria and the ECOWAS sub region, but needed the resources to fund infrastructure and manpower training for the institution.
“What happens to NCAT now that we are starting aeronautical university? My evaluation is that this administration had good intentions, but they could not think through from the concept, the planning, the implementation up to turning dream into reality. For the next government, they will evaluate status of each project/program and focus on bringing it to reality within a budget. They must realise that the country is growing from developing nation to developed nation and should not tolerate non-clarity of mission, lack of transparent and accountable processes. Here, I am supposing that government is a continuum,” he said.
Pandemic and New Realities
Aviation development strategist and former Vice President, Business Development and International Affairs, Arik Air, Lanre Bamgboshe, told THISDAY that it was painful that not much was achieved in the aviation industry since 2015, despite so much promises. He said the Minister had fantastic ideas but after the pandemic (Covid-19), some of those ideas have become incompatible with current realities because the pandemic has changed the trajectory and has redefined aviation industry and other sectors of the global economy.
“Take for example, the situation where Nigeria no longer needs too many personnel, as it used to be before 2020 and even now you may not need to physically move to different locations for different meetings because you can organise a meeting on zoom. On the Aerospace University, which the Minister said he would establish, my thinking is that it would be better if the Nigerian College of Aviation Technology (NCAT), Zaria is upgraded. The school enjoys global recognisition and goodwill. That is better than building a new institution. We should stop the idea of duplicating institutions.
“Also a leasing company would have been a fantastic project. It would have been backed by sovereign capacity and it is better than the establishment of a national carrier. We had worked on that in the past. Just choose the aircraft type for passenger service and cargo operations and meet with Original Equipment Manufacturers (OEM) and this should have been driven by the private sector, but it doesn’t appear to be so.
“On the national carrier, this should also be private sector driven and the Managing Director, Captain Dapo Olumide, should have been the Chief Marketer; not the Minister. What we are doing to the local carriers is creating competition, while giving their competitor concessions and sovereign guarantees and over time they will be forced out of the market. Why not give Air Peace, Ibom Air and others the same opportunities you are giving the new airline? Ethiopian Airlines is protected by its government and given strategic rights by its government. Our government should do the same for our own airlines,” Bambgoshe said.