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Imperative of airport concession in revenue generation

It is a common saying that the government has no business doing business. Recent happenings, especially occasioned by the coronavirus (COVID-19) pandemic, have gone to further strengthen this saying.

This can further be seen in the various businesses the Nigerian government set up through the years – they all went the same way. Nigeria Airways, National Electric Power Authority, NITEL, Nigerian Shipping Line, etc, all failed because government business is seen as an orphan.

The Nigerian National Petroleum Corporation, Nigerian Railway Corporation, National Broadcasting Corporation, and other government establishments still alive, operate below expected level and are not viable in the real sense – as the government yearly fund them through the annual budget, except the NNPC, whose performance is still below level year in year out. They exist just to create jobs and not for profit in the actual sense. Why is this so? Because government establishments are commonly seen as a cake everybody would always want a piece of.

As it has been said in different fora, government has no business doing business, instead it should provide the right environment – ease of doing business, infrastructure and electricity, favourable tax regime and policies with quick and independent judicial system, and above all, viable regulation to attract both local and foreign investors.

If not for the intervention of the Labour Union, the threat by the Federal Airports Authority of Nigeria (FAAN) to pay staff half salary for May and June because of poor revenue is an avoidable situation.

Read also: Magu, his bosses and Nigeria’s failed fight against corruption

If Nigerian airports were privately managed the operator would have run the business efficiently enough to have reserves and be able to access credit cheaply to avoid such a discouraging situation.

So far, the dwindling airports’ operation revenue points to the fact that the time is ripe for Nigeria to totally concession it airports. A concession agreement typically refers to a contract between a company and a government that gives the company the right to operate a specific business within the government’s jurisdiction, subject to certain terms.

It is an established fact that there are companies and individuals in Nigeria today capable in handling and managing any type of concessioning the Nigerian government may want to enter into.

Even nations more prudent in public management have seen that to create jobs, and for proper management, concessioning airports is the way to go. When it comes to airports – concession or public private partnership (PPP) is the Standard. Airport concessions have become the norm all over the world.

In fact, some countries have sold significant equity stakes in their airports in a bid to reduce the financial burden on taxpayers and dramatically improve the overall traveller and retail/concessionaire experience, by allowing professional asset managers to take over and run the assets more efficiently than the government.

The world’s favourite airports are either long-term concessions or privatised assets. Airports like Gatwick (UK), Lisbon Airport (Portugal), Santiago Airport (Chile), Kansai, Osaka, and Kobe Airports (all 3 in Japan) have long since been concessioned to airport operators – usually made up of a consortium of professional asset managers with decades worth of experience in financing and operating world-class airports and aviation assets. Nigerians lead in this area too.

However, stakeholders in the aviation sector have said if the Federal Government must concession Nigerian airports, it must adopt the right models in a bid to address infrastructure deficit.

Privatisation reduces the need for public sector investment, provides access to larger commercial sectors, and allows airports to diversify services without the fear of government control and interference, Nnaji Nnolim, chairman, House of Representatives Committee on Aviation, once said.

In theory this may lead to increased operational efficiency as well as create new paid incentives for management and employees, he said.

Available statistics indicate that more than 50 percent of European airports have some form of private ownership, with this percentage increasing significantly since 2011.

According to Nnolim, most large Australian airports are now owned by consortiums of private firms.

He said Gold Coast Airport, Ghana, for instance, is arguably an example of a successful privatisation model, having seen almost $233 million of investment since it was taken over by Queensland Airport Limited in 1998.

“Many countries are seeking to replicate this model/success. In May, Japan invited the private sector to submit proposals for the operation and management of seven airports under a 30 to 35 year concession. The country’s transport ministry is attempting to leverage on the private sector to promote tourism in the Hokkaido region.

“Elsewhere, Brazil is planning to shut down its National Airports Authority and selling its 54 airports to private companies. It kicked off the ambitious programme last year, raising $889.08 million through an auction of concessions for four airports,” he said.

Bayo Ogunlesi, chairman/managing partner of the private equity firm, Global Infrastructure Partners, is perhaps one of the most renowned private sector leaders operating an airport. His firm acquired a majority stake in London Gatwick Airport in a deal worth £1.5 billion. His firm also owns Edinburgh Airport (since 2012).

Savvy private sector and finance leaders like Ogunlesi have the ability to attract private sector and multilateral/development finance institution funding, arguably more efficiently than public sector institutions, because they bring fresh, private sector energy and vision to these assets, inspiring confidence in a broader range of capital markets players than an institution like FAAN.

Private sector operators will also prioritise effective management, human and physical capacity development and a performance culture – three foundational ingredients required to run modern infrastructure and deliver compelling experiences for travellers and indeed concessionaires operating within these facilities.

Government can’t deliver the modern experiences stakeholders deserve and are willing to pay for. In terms of passenger, airline and concessionaire experiences – Nigeria’s international airports lag behind many other African airports. We’re all aware of the commotion on twitter when Ghana’s new passenger terminal was unveiled. Nigerians were understandably upset but perhaps also in denial!

How do they expect a cashstrapped government to continue funding inefficiently run airports? It is in everyone’s interest – government, airlines, Nigerians, etc, for these airports to be handed over to serious and responsible operators from the private sector.

This becomes particularly important in the new global context of COVID-19, the New Normal. We all know the government will struggle to make and maintain the necessary investments in infrastructure, personnel and technology required to make the airport experience safe and enjoyable, so, why not let those who know how to make a business of it and drive accountability take the lead? I mean – how many times have you gone to the restroom in an airport to wash your hands only to find that there is no soap or running water?

Let us look at the concessionaires too – the shops in our international airports resemble the shops you would find in anywhere else in Nigeria. These retail outlets deserve the very best in terms of infrastructure, because they are among the very first and last touchpoint travellers – most of whom are business travellers – will experience of Nigeria.

They should be promoting the very best of made-in-nigeria alongside the very best the world has to offer. Modern airport operators from the private sector know the importance of matching retailers to the profile of travellers frequenting these airports in a more effective way than public sector institutions who, even though well-meaning, are constrained by many factors that do not add value to the selection and/or procurement processes involved in approving retailers to operate in our airports. This should not be misconstrued as elitism – not at all. Instead, it is about selecting the best to represent what the airport and country stand for.

Showcasing the very best of a nation’s culture – airports all over the world are also touch points used to showcase the very best of the countries culture. Heathrow, Gatwick, or Tambo, etc., all showcase the very best creative and cultural outputs of their home countries, but in Nigeria this is not the case, even though Nigerian Art and Culture sector enjoys a tremendous audience and patronage the world over. We should be showcasing the very best of our own in these locations.

The government needs to explore a Public Private Partnership (PPP) and concession the airports carrying along the workforce at FAAN, Simon Tumba, CEO of, said.

“With Nigeria’s God-given natural and human resources, and a solid leapfrogging plan and strategy, we should be aiming for a futuristic airport of $2.5 billion. We have the population, the market and geographic position to make and realise such aspirations.

“The aviation unions who are averse to concession of our airports are merely shooting themselves in the foot, and in the long run, may end in regret and bitter cries,” Tumba said.

As the 2020 elections of the Nigerian Bar Association (NBA) draw close, candidates vying for different executive offices have continued to share their programmes and developmental strategies for the association. In this interview with Businessday Law Editor, THEODORA KIO-LAWSON, NBA Presidential aspirant, OLUMIDE AKPATA, speaks of how the poor treatment of lawyers by employers has made the legal profession in Nigeria a laughing-stock; his dissatisfaction with the administration of justice system in Nigeria; the need to train, retrain and equip lawyers to advise in different aspects of the economy; the NBA-SBL collaboration with the National Assembly under the Nigerian Economic Summit Group, UK DFID, which created the National Assembly Business Environment Roundtable (NASSBER) under his leadership, among other issues. EXCERPTS…

Let’s begin with current realities such as the advent of a pandemic. Pre COVID-19, only a handful of local commercial law firms appreciated the need for virtual meetings, remote working and law/legal tech generally. However, it’s the new norm today. Do you see practice in Nigeria falling back to the ‘ old norm’ in the not-so-distant future? If not, where are we headed in another five-ten years?

It is a fact that the global legal market, like all other aspects of life, is increasingly driven by technology and any person or group of persons, including Nigerian lawyers that fail to adopt technology as an essential tool will be left behind while the rest of the society will move on. And this is not good for the legal profession and for the society.

You are right that relative to what obtains in the rest of the world, only a few Nigerian law firms had embraced technology generally and law tech in particular pre COVID-19 and if we are being frank COVID-19 caught the legal profession in Nigeria unprepared. As strange as it sounds, a sizable number of lawyers did not have such basic information technology tool as work emails, let alone more sophisticated research and firm management software. Yet, emails are the most common mode of communication in the business world today. Even before COVID-19, I had always said that the biggest clients will continue to go to responsive, reliable lawyers that can attend to their needs in an efficient and effective manner. At a time when physically meetings are not currently fashionable, the imperativeness of technology has never been more profound.

So, law tech, characterised by virtual meetings and hearings, remote working etc, is the new norm and I believe that it has come to stay. Any law firm that wants to compete, remain relevant, and survive must continue to evolve. This will entail progressively investing in technology. Additionally, this will help them stay abreast of developments in the global legal market. Hopefully it can only get better in the years to come.

You are a member of the National Executive Committee (NEC) of the NBA and a past Chair of the Section on Business Law (SBL). As a bar leader and a stakeholder in the business community, how do you think Nigeria’s administration of justice system has affected local businesses and foreign investments into the country? And what can the NBA do to improve or enhance this?

The honest answer to your question that I am dissatisfied with the way that the administration of justice system in Nigeria has affected investments in Nigeria. The importance of the justice delivery system in any country cannot be overemphasised. Indeed, in the World Bank Ease of Doing Business Report which is published annually, there is a cardinal place for access to justice for the enforcement of contracts, as one of regulatory areas that are central to how the private sector works, and by extension how the economy of a country performs.

The preponderance of opinion is that with the right economic policies, foreign direct investment inflow into developing economies can be a major catalyst for economic development. But before an investor, especially a foreign investor, can take a business decision to invest in an economy, part of what he takes into consideration is the extant regulatory framework in such economy and the administration of justice system in place in the event of a dispute.

It is a view widely shared that the Nigerian justice system is faulty, and despite the high level of intellect that abound in our profession (both at the Bar and on the Bench), the justice delivery system is not delivering optimally and the legal profession in Nigeria is punching way below its weight. In truth, no society or its commerce can thrive without an effective judicial system.

As I said not too long ago, the consequences of failures of the administration of justice system failure in Nigeria include the fact that the lawyers themselves who are key stakeholders in the system largely consider the process to be tedious and inefficient; the economy continues to suffer on account of the apparent lack of synergy between it and the system, and perhaps most importantly, the citizenry has lost faith and confidence in the justice delivery system. Using the illustrative example of the court system, the justice delivery system in Nigeria has been historically plagued by fundamental ills such as delay and congestion of cases in courts, stories of judges who do not sit and sadly do not inform counsel in advance only for counsel, who sometimes come from outside jurisdiction, to find out after waiting long hours in court; or judges with overloaded dockets without basic facilities and resources and who sometimes keep counsel in court from morning till 4pm before adjourning; over crowded court rooms that are inadequate and unfit for purpose; archaic systems of filing and storage of court processes; undue delays in delivering rulings and judgments, etc. When you add to this list the perennial disrespect for the sanctity of contracts by successive Nigerian governments across all tiers, and the lack of regard to the rule of law and the fundamental rights of citizens, then you can imagine how bad the situation is. All of these contribute to the reason why despite its enormous potentials, much-needed FDI inflows to Nigeria remain comparatively low.

What can the NBA do to improve or enhance this? It is important for the NBA to realise that it is the responsibility of the legal profession in every country to service the economy, and that as the largest economy in Africa, the legal profession in Nigeria has a key role to play and a ready market to service.

The NBA as an Association needs to study the contribution of legal services to the economy of developed countries e.g. the United Kingdom. As a matter of deliberate policy, the government of the United Kingdom has created an enabling environment for legal services to be a revenue earner. This is why English law became the law of choice in cross border transactions, and English courts routinely serve as the courts of choice in agreements involving international parties. This contributes a lot to the economy of the United Kingdom in general and significantly improves the fortunes of their lawyers. We need to open our eyes and see the big picture.

Regrettably, for too long we have made the choice to restrict ourselves to dispute resolution practice to the exclusion of other practice areas, thereby saturating the space, for the benefit of a privileged few and with disastrous financial consequences for the average lawyer in Nigeria. The tone from the top needs to change. We must as a matter of urgency emphasise the training and retraining of lawyers and to equip them with the tools and capability to advise in different aspects of the economy. Nature abhors a vacuum, and if we continually fail to do so, others will come and fill the gap. With globalisation and the coming into force of the Agreement establishing the African Continental Free Trade Area, this is no longer a remote possibility.

The Section on Business Law, which is the specialist arm of the NBA has a member-base of business law practitioners, how has that community of corporate and commercial lawyers engaged with law/ policy makers and regulators to shape policies and enhance business processes in Nigeria?

As a Section of the Association, the raison d’etre, as it were, of the NBA Section on Business Law ( NBASBL), which I had the privilege to lead from 2016 to 2018, was to raise the level at which business lawyers practice in Nigeria.

One of the ways in which we did this was to regularly and proactively engage the regulators and policy makers to contribute in shaping the direction of legislations in Nigeria especially those that had an impact on the economy of the nation. We became the convergence-point of lawyers, regulators, policymakers,

I am dissatisfied with the way the administration of justice system in Nigeria has affected investments in Nigeria

and government. Issues affecting Nigeria’s economy were regularly deliberated upon at our seminars, conferences, and workshops. As our flagship Annual Business Law Conferences showed, the NBA-SBL became so important that anybody who considered himself a player in Nigeria’s economy must attend an SBL event. In the process we impacted our members and provided them the knowledge and opportunity to hone their skills in various areas of legal practice, thereby raising the bar of commercial law practice in Nigeria.

Under your leadership, the NBA- SBL actively collaborated with the National Assembly [ NASS], the Nigerian Economic Summit Group (NESG), and the UK Department for International Development [DFID] – a partnership known as NASSBER and another with the Presidential Enabling Business Environment Council (PEBEC). What was the objective at the time and was this achieved?

As I said earlier one of the mode of operation of the NBA-SBL was, and remains, to actively collaborate with policy makers and regulators to enhance the business environment in Nigeria. Some of the collaborations which I remain very proud of include working with the Presidential Enabling Business Environment Council, PEBEC, led by Nigeria’s Vice- President and our senior colleague, Prof. Yemi Osinbajo, SAN, and the Enabling Business Environment Secretariat EBES under the leadership of Dr. Jumoke Oduwole. The objective was to improve the ease of doing business in Nigeria and we set out to achieve this by reviewing extant laws and regulations and the monitoring of the productivity and response time of Government Ministries, Departments and Agencies.

We also established a partnership with the National Assembly under the then leadership of Bukola Saraki as Senate President, and the Nigerian Economic Summit Group, with support from the UK Department for International Development (UK DFID), to create the National Assembly Business Environment Roundtable (NASSBER) as a platform for the legislature and the private sector to engage, deliberate and take action on a framework for improving the Nigerian business environment. That partnership resulted in a comprehensive review of the institutional, regulatory, legislative and associated instruments affecting businesses in Nigeria.

As a result of these collaborations, within a few months of work, doing just a few things, and simply by plucking a few low-hanging fruits, Nigeria climbed up 24 notches on the Global Ease of Doing Business Index. Although I like to say that what we were able to do was little in the grand scheme of things, compared to all that needs to be done, but in truth quite a lot was achieved. More significantly, those efforts were indicative of what can be achieved if we worked together and are galvanized by the ultimate objective. For me, it was the promise that it holds that encourages me. It showed that with square pegs in square holes, and with vision and focus, you can achieve a lot.

Speaking of efficient laws which impact businesses in Nigeria, the NBA-SBL also under your leadership was involved with the amendment of CAMA and there seem to have been some progress over the years towards making it an amended law. For a bill which signifies meaningful progress towards aligning business practices, why do you think it is taking so long for it to be assented and actually passed into law?

The Corporate Affairs Commission, CAC was one of the agencies of Government that our activities and collaborations with the Government centred on. The CAC has in the past few years undergone a quiet transformation, under the leadership of the current Registrar-general, who happens to be on the Council of the NBA-SBL and a colleague we hold in the highest esteem. The only thing missing is to provide the legislative backing to the reforms and this is expected in the form of the Companies and Allied Matters Act, CAMA Amendment Act. I honestly didn’t think that by this time, the new CAMA would not have entered into force. As an Association we have to continue to advocate for new laws and the CAMA when it is finally accented to by the President promises to be one the of the most revolutionary legislations in the country’s history, at least as far as the economic development of the country is concerned.

The Section on Business Law over the years, has been characterized with many developmental strides. As Chairman of the 2016- 2018 Council, what informed some of the fundamental contributions you made to the section’s accomplishments, such as the SBL Club in universities? And when you look back, are you happy you birthed this vision?

Indeed, I am very proud of what we achieved, and continue to achieve at the NBA-SBL from the foundational Chairman Mr. George Etomi to the current Chairman Mr Seni Adio, SAN. What we demonstrated to the rest of the Association is that you can set a standard and maintain it. As a Section, we brought pride and respect to the Association. As you mentioned, I was the Chairman from 2016-2018 and together with the Council, we achieved quite a lot. I have said this countless times, and will say it again, one of my biggest achievement was easily the decision to set up SBL Clubs in six universities across the six geopolitical zones in Nigeria.

The idea behind setting up the SBL Clubs was to expand the horizon of law students and enable them, at a foundational level, to develop appropriate interest in contemporary areas of law practice. One of my biggest desires for the NBA is for the Association to champion a transformation of the system of legal education in Nigeria in order to actualise a system that produces knowledgeable, competent and ethically conscious lawyers. This should be a matter of serious interest to all lawyers and to the NBA as an Association because today’s student is tomorrow’s lawyer and would constitute the workforce for the future. To build sustainable, complaint and competitive practices, we need a well-educated and skilled workforce in the legal profession. For us we got tired of complaining about the quality of lawyers, and decided to do something about the situation. Just a few days ago, I received a heart-warming message from one of the beneficiaries of the initiative. So I remain happy to have birthed this idea and I am gratified that the current NBA-SBL administration led by Seni Adio, SAN has continued in the tradition. It can only get better.

The NBA is constantly accused of being a toothless bulldog. So, speaking of a progressive bar and borrowing a leaf from the NBA-SBL, how can lawyers generally be more involved in influencing government action?

While I would refrain from using the phrase, toothless bulldog to describe our noble Association, I do not think that there is anybody who can argue with the fact that NBA has in recent times lost its voice as the prime defender of the integrity and independence of the Bar and the judiciary and of the Nigerian society at large. Things are so bad that even lawyers themselves who are supposed to be the defence of the rule of law and the society are now victims of the harassment and abuse by security forces. For too long the NBA has yielded its position as the conscience of the Nigerian society and the bulwark against tyranny and injustice in Nigeria. As I have said countless times, as long as the Bar fails to carry out this sacred duty, we would continue to dash the hopes of the millions of our compatriots who look up to us to fight against all forms of injustice, condemn unpopular government policies and check abuse of power.

You are right that there is a lot the NBA can learn from the NBA-SBL especially in the area of proactively engaging with the government and the security agencies. Beyond this, the voice of the NBA must be heard in respect of the policies and actions of government, and our position must be unequivocal in defence of the supremacy of the constitution, the sanctity of the rule of law, the independence of the judiciary and the need for respect of judgments and orders of courts at all times, and not just when it is convenient.

You are in the race to become the next president of the NBA at the forthcoming elections which holds in a few weeks, do you trust the e-voting system as it is today? And if not, what can be done to increase candidate/voter confidence in the process?

In answering this question, let me make it clear that the universal suffrage introduced in place for the 2016 election and the e-voting system have both come to stay and are non-negotiable as far and the future of the Association is concerned. That said, as an optimist I want to say that I trust the e-voting system but in reality, the feelers from the ECNBA regarding their readiness for the 2020 election, which is just about two weeks away, do not inspire much confidence and leave a lot to be desired.

Several articles and opinions have already been written in respect of the 2020 NBA elections and the campaign team of at least one of the Presidential candidates has written to express their unease with the way things are going. And I have to agree with them. The voters’ register is demonstrably flawed; there are unresolved issues with the frustrating and completely unnecessary verification exercise that appears designed to disenfranchise; and above all, contrary to all known best practices, the technology to be deployed at the poll is shrouded in secrecy. The loud silence of the ECNBA is bewildering.

All I can say at this time is that I was in University at the time of the crisis that tore the Association apart in 1992 and which lasted for six years; and that there are still hangovers from the fallouts of last two elections. Anything short of a fully transparent, free, fair, credible and user-friendly election in 2020 may potentially plunge the Association into another round of crisis from which it may not recover.

Re Lawyers Welfare: many senior practitioners and law firm partners – particularly courtroom lawyers do not believe that the remuneration of lawyers can be efficiently regulated and have even accused some NBA presidential candidates who have professed to make a change, as being overzealous and unrealistic. What are your thoughts about this?

I can confidently say that my plans for the welfare of the Nigerian lawyer is neither overzealous nor unrealistic. I have said it before that the promotion of the welfare of Nigerian Lawyers is the raison d’etre of the NBA and that I strongly believe that while the Bar should remain a watchdog in the society, it must not do so to the neglect of the welfare of the members. I have also made it clear that my idea of welfare for lawyers, both young and old, does not consist of providing fleeting handouts or freebies to lawyers. I would rather have lawyers equipped with modern skills and tools to provide for themselves and for the NBA to provide the enabling environment for lawyers to earn better.

I cannot deny that the question of the working conditions of lawyers especially the remuneration of legal practitioners in private practice is undoubtedly one of the more controversial issues for an NBA President to tackle. This is borne out of the realisation that the remuneration of legal practitioners in private practice is purely a contractual issue between the lawyer and his employer and the NBA as presently constituted lacks the powers to determine or police that.

Having said all of that, we cannot run away from the reality which is that a good number of lawyers work without any formal employment contract and are left at the mercy and whims of their employers. In some cases, the poor remuneration of lawyers is a function of the inability of the employers seniors to do better. But in many other cases, this practice is completely unjustified. The poor treatment of lawyers by their employers has made the legal profession in Nigeria a laughingstock and no Association worth its salt would fold its hands and do nothing about it. Indeed, there are thousands of senior lawyers who pay their drivers and domestic staff more than they pay legal practitioners in their employ.

In this regard what I can promise, at the very least, is to give institutional backing to the ongoing discussions regarding the remuneration of lawyers with a view to devising feasible and enforceable ways to improve the lot of our members. One example that readily comes to mind is the need for an NBA Remuneration Committee to charged with this responsibility. Incidentally, we have a Legal Practitioners Remuneration Committee, established by section 15 of the Legal Practitioners Act. But this Committee is headed by the Attorney General of the Federation and the President of the NBA is only a member of the Committee. It is also instructive to note that this Committee’s business primarily focuses on the fees chargeable by lawyers to clients as opposed to the remuneration of legal practitioners in private practice. This is why I believe that we need an NBA Remuneration Committee that devise feasible ways to improve the poor remuneration of legal practitioners in private practice and also make recommendations to the NBA President for onward representation to the Legal Practitioners Remuneration Committee established under the Legal Practitioners Act.

There are also other measures that are not necessarily enforceable or mandatory or punitive in nature, but which can have the effect to encouraging and creating incentives for law firms and senior lawyers to pay their young lawyers. I pledge to explore these measures.

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