BusinessDay

FNAC: Stakeholders chart path for Nigeria’s aviation development

As airports and airlines across the world commence the process of rebound following the Covid-19 impact on the global socio-economic space that slowed down global travels, aeronautical operations and revenue generation, conversations have become necessary to kick-start development in the aviation sector.

Part of the conversations would be to identify and analyse the positives from the COVID-19 challenges, with a view to consolidating on them and fostering sustainable development in the aviation industry.

In addition, trade and investment sessions, where opportunities for investments at Nigeria’s various airports will be showcased is also key to reviving the sector.

Stakeholders which include the airlines, handling companies, aviation agencies, concessionaires and security agencies discussed steps to advance the country’s aviation sector at the maiden edition of Federal Airports Authority of Nigeria (FAAN) National Aviation Conference (FNAC) with the theme: ‘Advancing the Frontiers of Possibilities for Safe, Secure and Profitable Air Transport’, in Abuja.

At the event, investors also had first-hand information on how to partner FAAN in mutually beneficial business arrangements.

Rabiu Yadudu, the managing director of FAAN said the authority aims to come up with a working document that would be transmitted to all the stakeholders for immediate and sustained action and conference an annual event, where we keep working on ideas aimed at building and implementing the resolutions reached at past conferences.

Yadudu stated that Nigeria’s potentials and capacity in the global air transport industry is grossly underutilized, adding that if Nigeria is desirous of attaining the status of a major player in the global aviation sphere, this is the time to reposition and move the industry forward.

He said the focus is on Nigeria because Nigeria has the largest fleet of aircraft within the sub region.

He disclosed that as at 2021, it was reported that Nigeria lost $2.5 billion (about N1.25 trillion) in MRO investments to neighbouring countries, hinting that having such investments here would have created more employment opportunities for Nigerians, revenue generation and training of technical personnel for maintenance of aircraft.

“The inter link and value chain between the air transport, tourism and hospitality industry for economic growth cannot be over emphasized. Today, the Eiffel Tower in Paris, London bridge, Dubai Mall, Burj Khalifa, the British museum in the United Kingdom, among others have all been consciously developed into major tourist attractions that drive passenger traffic to those destinations and by implication,” he explained.

Aviation’s statistics/prospects

Yadudu said according to the International Air Transport Association, (IATA), the aviation sector supports 241,000 jobs, $1.7 billion gross value added and contributes 0.4 percent to Nigeria’s GDP.

He disclosed that prospects by year 2037 include 14.8 million passengers and 555,667 job opportunities.

He disclosed that Nigeria ranks 127th out of 136 countries in visa openness, 16th out of 136 countries for cost competitiveness, 68th out of 124 countries on Air Trade Facilitation Index and 36th out of 135 countries in eFreight Friendliness Index (EFFI).

Contextual issues in Aviation

The FAAN MD listed some contextual issues in the aviation sector to include over-stretched infrastructures and infrastructural neglect, recent drive for infrastructural renewal, general national insecurity, high cost of operational capital/fund, instability in foreign exchange, nascent tourism, relatively low level of international trade national power challenges, global rise in cost of aviation & other fuel and operators’ service failures across board.

Read also: Covid: Reforms needed to retain aviation ground handling talent – IATA

Other issues listed include passengers’ restiveness, profit drive over standards by operators and human factor issues (aging and inadequate workforce, training & certification issues, etc).

In a bid to address these issues, he said, the government needs to prioritize aviation in national planning; financial institutions need to mobilize resources, operators and regulators need to engage the public as partners and operators need to provide efficient infrastructures (Airports, NAVAIDS, Weather, etc.).

Investment Opportunities

As airports look to attract investment amid COVID-19 impacts, experts have said Aerotropolis (Airport City) has become the engine of economic transformation in airports and states where it exists.

Aerotropolis is said to be the easiest way to diversify and increase both aeronautical and non-aeronautical revenues of an airport, thus, it has saved many airports that are not breaking-even due to low passenger traffic.

Also speaking at the conference, Hycienth Ngwu, general manager, Business Development, FAAN said Aerotropolis has the capacity to drive the airports as well as the city’s entire economy and reposition the state where the airport is located into an ideal center for trade, investment and tourism.

Ngwu said some of the lessons to learn from current airport statistics is that businesses thrive where there is an effective and efficient business continuity plan and FAAN managed airports are typical examples of a shock-resistant business model due to the management’s ‘Business Continuity Strategic Plan.’

He assured that investments in airports are always appreciating.

He listed some investment opening in the airport to include Aerotropolis (Airport city), shopping and mixed-use malls, office complexes, estates, car parks, land and rail transport, hotels, resorts, recreational and amusement facilities, aircraft hangers (Maintain, Repair and Overhaul), aviation equipment leasing companies, jet bridges, agro-allied and cargo facilities, warehouse services, aviation fuel depots, fuel hydrant system, waste and water management, lounges, bank pavilion, free trade centres, terminal management, advertisement and branding, among others.

He said the government has promised low premium and ground rent on its land and low cost of production to investors looking to invest in Nigerian airports managed by FAAN.

Other benefits listed for airport investors include ease of doing business at the airports, favourable terms of engagement, easy access to staff for quick solutions to challenges, competitive price and high earnings on investment.

“Investors can also access the N1bn Nigeria-Africa Trade Investment Programme (NATIPP) jointly launched by Nigeria Export-Import Bank (NEXIM), African Export Import Bank (AFREXIM) and the Nigerian Export Promotion Council (NEPC) One Product One State Initiative of the National Committee on Export Promotion (NCEP) can easily be activated and implemented,” Ngwu added.

Ease of doing business: Boost of airport investments

Ease of doing business has been identified as a panacea for boosting airport investments in Nigeria.

Adeshina Emmanuel, director, Department of Investment Promotion of Nigerian Investment Promotion Commission, (NIPC) said investors looking to invest in Nigeria’s aviation sector will be assisted by the NIPC to navigate challenges in investing in Nigeria and assist with connecting prospective foreign investors with domestic partners.

He also assured that the commission will facilitate discussions with government agencies and policy makers, assist investors with quality information to help them implement their investment plans in Nigeria and facilitate investor input into the policy making process.

Unlocking opportunities in air cargo

Air cargo remains a significant source of revenue in aviation.

There is an estimated $250 billion revenue potential for the air cargo value chain in Nigeria with opportunities for states and enormous opportunities for job creation.

“Air cargo presents opportunities for countries to boost internally generated revenue, link with the global value chains, leverage opportunities in AfCFTA and leverage a huge diaspora population,” Muda Yusuf CEO, Centre For The Promotion Of Private Enterprise, (CPPE) at the FAAN aviation conference said.

Yusuf also hinted that air cargo boosts economic diversification in the states, presents opportunities for higher foreign exchange earnings and builds an inclusive economy for the states.

In order to facilitate air cargo in Nigeria, he said states must create an enabling environment for investors in the entire supply chain, support infrastructure for investors in the business, and develop exports free zones in the states which shall be linked to the air cargo facilities and build host community support.

He said States’ cluster strategy for export development would strengthen localization economies; increase productivity through specialized inputs, access to information, synergies, access to public goods, including infrastructure and enhance the effectiveness of government intervention efforts to support small scale industries.

He stressed that strong clusters have the capacity to attract bigger domestic and foreign investors.

Last line

If positives from these myriads of challenges confronting the country’s aviation sector can be analysed with a view to consolidate them and foster sustainable development in the aviation industry, then the sector can grow and contribute reasonably to the country’s economy.

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