MINISTERIAL PRESS STATEMENT ON FISCAL STIMULUS MEASURES IN RESPONSE TO THE COVID-19 PANDEMIC & OIL PRICE FISCAL SHOCK
1. His Excellency, Mr. President, on Monday, 9th March 2020, set up a Committee comprising senior government officials, including:
a. Hon. Minister of Finance, Budget & National Planning (‘HMFBNP’) – Chairperson;
b. Hon. Minister of State for Budget & National Planning (‘HMSBNP’);
c. Hon. Minister of State for Petroleum Resources (‘HMSPR’);
d. Governor of the Central Bank of Nigeria (‘CBN’); and
e. Group Managing Director of the Nigerian National Petroleum Corporation (‘NNPC’).
2. Pursuant to the meeting with Mr. President, the Committee was mandated to recommend fiscal measures for Mr. President’s kind consideration and approval. In this regard, the Committee recognised that Nigeria is currently facing significant fiscal risks due to the current global economic disruption caused by the COVID-19 crisis. Furthermore, Nigeria is exposed to the risks of both a pronounced decline in oil prices and spikes in risk aversion in the global capital markets.
3. Although similar challenges were experienced in 2008/2009 as well as in 2015/2016, Nigeria has considerably lower fiscal buffers now than in previous economic downturns. The decline in international oil prices and domestic production may be magnified if a severe outbreak of COVID-19 occurs, despite ongoing efforts to curtail the spread of the Pandemic through compulsory lockdown of Lagos and Ogun States, as well as the Federal Capital Territory (‘FCT’).
4. To directly address these health and economic challenges, Mr. President has approved the following Fiscal Stimulus Package, as part of an Integrated Policy Framework to ensure that Nigeria’s healthcare system, fiscal position and economy are sufficiently supported to weather these shocks. This Fiscal Stimulus Package comprises various measures as indicated in greater detail below.
ESTABLISHMENT OF A N500 BILLION COVID-19 CRISIS INTERVENTION FUND
5. Mr. President has approved the establishment of a N500 billion COVID-19 Crisis Intervention Fund. The establishment of this COVID-19 Crisis Intervention Fund will involve drawing much-needed cash resources from various Special Funds and Accounts, in consultation with and with the approval of the National Assembly. The N500 billion is proposed to be utilized to:
a) Upgrade healthcare facilities as earlier identified by the Presidential Task Force on COVID-19 and approved by Mr. President;
b) Finance the Federal Government’s Interventions to support States in improving healthcare facilities;
c) Finance the creation of a Special Public Works Programme; and
d) Fund any additional interventions that may be approved by Mr. President.
6. With regards to the Special Public Works Program, Mr. President had previously approved a Pilot Special Public Works Programme in eight (8) States to be implemented by the National Directorate of Employment (‘NDE’) from February 2020 to April 2020. Mr. President has now approved that this Programme be extended to all 36 States and the FCT from October 2020 to December 2020. The selected timeframe is to ensure that the Programme is implemented after the planting season is over, and it will result in the employment of about 774,000 Nigerians (that is, 1,000 people per each Local Government). N60 billion in allowances and operational costs has been earmarked from the COVID-19 Crisis Intervention Fund for this initiative.
7. The Federal Ministry of Finance, Budget and National Planning is also evaluating how best to extend the Special Public Works Programme, to provide modest stipends for iterant workers to undertake Roads Rehabilitation, Social Housing Construction, Urban and Rural Sanitation, Health Extension and other critical services. This intervention will be undertaken in conjunction with the key Federal Ministries responsible for Agriculture, Environment, Health and Infrastructure, as well as the States, to financially empower individuals who lose their jobs due to the economic crisis.
8. Further details regarding the operation of the N500 billion COVID-19 Crisis Intervention Fund will be announced once the consultations with the National Assembly and the key Ministries are concluded.
ENHANCED FINANCIAL SUPPORT TO THE STATES FOR CRITICAL HEALTHCARE EXPENDITURE
9. The Nigeria Centre for Disease Control (‘NCDC’) has access to a Regional Disease Surveillance Systems (‘REDISSE’) facility from the World Bank in the sum of US$90 million, out of which US$8 million has been drawn. We have requested to fully draw down on the outstanding balance of US$82 million. The Government has also requested for additional financing in the sum of US$100 million from the REDISSE project to meet COVID-19 emergency needs in all the 36 States and the FCT, through the NCDC and Federal Ministry of Health. This will enable us to expand the capacity of intensive Care Units (‘ICUs’), enhance laboratory capacity, accelerate the procurement of test kits, strengthen surveillance mechanisms as well as improve information management.
10. We deeply appreciate the support we have received so far from our partners at the World Bank. We are continuing our engagements with the World Bank, the African Development Bank and the Islamic Development Bank to access concessional funding to support the implementation of the 2020 Budget. We have also applied for funding from the International Monetary Fund’s COVID-19 Rapid Credit Facility to draw from our existing holdings with the World Bank Group / International Monetary Fund. This loan will not be tied to any conditionalities. However, it is important to clarify that Nigeria does not intend to negotiate or enter into a formal programme with the International Monetary Fund, at this time, or in the foreseeable future.
11. The Federal Government has provided N102.5 billion in resources to be available for direct interventions in the healthcare sector. Of this sum, N6.5 billion has already been made available to the NCDC for critical expenditure. The Federal Government remains committed to supporting the States in these difficult times, particularly those States that are currently battling with the COVID-19 Pandemic. Lagos State has already been provided N10 billion in emergency funding. As the situation in the FCT and other States at the forefront of our efforts unfolds, explicit criteria are to be agreed with the Federal Ministry of Health and the NCDC to determine when funds would be released to the affected States and the FCT. More funds are to be provided from the proposed COVID-19 Crisis Intervention Fund to address emerging and priority funding needs as these arise.
12. To complement these initiatives, we are taking steps to activate, release and (where necessary) enhance the hazard allowances provided in the remuneration structure of the Federal health sector workers. The Federal Government enjoins the affected States to take similar measures.
13. We take this opportunity to recognise the patriotism and sacrifice of our frontline healthcare workers, whose critical roles in combatting the COVID-19 Pandemic place their health and lives at risk. We thank all of you for your heroic efforts to protect your fellow citizens from disease and death. The Federal Government hereby assures our frontline healthcare workers of adequate insurance, compensation and support during, and in the aftermath of the COVID-19 Pandemic.
AUGMENTATION TO THE STATES’ FAAC ALLOCATIONS & MORATORIUM ON STATES’ DEBTS
14. Based on the fiscal assumptions underpinning the 2020 Appropriation Act, monthly Federation Account Allocation Committee (‘FAAC’) disbursements to the Federal and State Governments were projected at N888.5 billion. However, due to the significant drop in international oil prices, FAAC monthly disbursements have declined in recent months to N716.3 billion in January and N647.4 billion in February 2020. Our experience shows that monthly average FAAC receipts must average at least N650 billion for the Federal and State Governments to meet their current obligations. Unfortunately, we project that monthly receipts may decline to below N400 billion, over the next 3 to 6 months.
15. To address these emerging fiscal risks, Mr. President has approved that the sum of US$150 million be withdrawn from the Nigeria Sovereign Investment Authority (‘NSIA’) Stabilization Fund to support the June 2020 FAAC disbursement. The Stabilization Fund was created for such emergencies and is to be utilized for this purpose. We are also exploring other options to augment FAAC disbursements over the course of the 2020 fiscal year.
16. Mr. President has also approved that the Federal Ministry of Finance, Budget and National Planning should engage with the CBN to agree on a Debt and Interest Moratorium for States on Federal Government and CBN-funded loans, in order to create fiscal space for the States given the projected shortfalls in FAAC allocations. Accordingly, once monthly average FAAC receipts fall below a specific threshold, interest and capital payments by States, shall be suspended till monthly average FAAC receipts exceed the threshold. The details of this Moratorium will be expeditiously worked out with a view to submitting the final proposals for Mr. President’s guidance and final approvals. This intervention is vital to create fiscal space for the States, as they deal with the health and economic impact of the crisis. States will also be encouraged to explore similar arrangements for their outstanding debts to Commercial Banks.
ENSURING ADEQUATE SUPPLIES OF ESSENTIAL FOOD ITEMS & CRITICAL MEDICAL SUPPLIES, AS WELL APPROPRIATE STEWARDSHIP OF DONATED ITEMS & FUNDS
17. The responses to the COVID-19 Pandemic and the impact of the 14-days lockdown, will have a significant impact on the transportation, distribution and availability of essential food items and medical supplies. Furthermore, the Government recognises the adverse implications of these extraordinary decisions on our market women, farmers, traders and smaller businesses.
18. The Finance Act, 2019 fortuitously provided significant tax relief for Micro, Small and Medium-sized Enterprises (‘MSMEs’). Corporate tax rates for Medium-sized Enterprise were cut from 30% to 20%, and Small / Micro Enterprises are completely exempt from corporate taxation. This tax relief will be invaluable for businesses in the large informal sector that earn N25 million or less in a financial year. The Finance Act, 2019 has also expanded the VAT Exemption List for essential food, medical supplies and other basic items that are critical in our efforts to address the COVID-19 Pandemic.
19. We deeply appreciate the overwhelming show of solidarity by public-spirited individuals and corporate bodies towards combating the COVID-19 Pandemic through financial and material contributions. In this regard, the Government recognises its responsibility to put an adequate framework in place for the collection, management and reporting of these donations. Accordingly, the Federal Ministry of Finance, Budget and National Planning is developing a comprehensive framework for the transparent management of the contributions.
20. In the interim, Mr. President has approved the restructuring of the Treasury Single Account (‘TSA’) in order to better mobilize cash donations from the generality of our people and corporate bodies across the nation, create flexibility and build a coalition with financial institutions while maintaining the sanctity of the TSA. Going forward, the COVID-19 Donor Accounts, which will form part of the existing TSA arrangement shall be opened with the following banks:
a) Zenith Bank
b) Access Bank
c) Guaranty Trust Bank,
d) UBA; and
e) First Bank.
21. These accounts will be linked to the main TSA for ease of monitoring and reporting.
22. I will be issuing circulars and Ministerial Orders to ensure that charitable donations by benevolent companies to support our COVID-19 Pandemic efforts are tax deductible, pursuant to Section 25 of the Companies Income Tax Act.
AMENDMENT OF 2020 APPROPRIATION ACT
23. The 2020 Appropriation Act was based on certain fiscal assumptions, which we have been compelled to revisit given the emerging economic realities. Specifically, projected Oil Revenues have been significantly affected in that:
a. Dated Brent Oil Prices fell to as low as US$19.125/barrel (as at Friday 3rd April 2020) as compared with the 2020 Budget Benchmark of US$57/barrel; and
b. Oil production in 2020 year-to-date is 2.0mbpd as compared with the 2020 Budget’s projection of 2.18mbpd.
24. We are therefore revising the benchmark oil price for 2020 to US$30/barrel and oil production to 1.7mbpd. We have similarly had to adjust downwards our Non-Oil Revenue projections including various tax and customs receipts, as well as proceeds of privatisation exercises. In this regard, the Budget Office is currently working on a revised 2020 – 2022 Medium-Term Expenditure Framework / Fiscal Strategy Paper (‘MTEF/FSP’) as well as an Amendment to the 2020 Appropriation Act.
25. The proposed Amended Budget will provide for the COVID-19 Crisis Intervention Fund and other adjustments required due to the decline in international oil prices. We have also commenced engagements with the Leadership and key Committees of the National Assembly to discuss our plans, such that once the Executive’s 2020 Amendment Budget is completed, we shall expeditiously seek the requisite Presidential and Legislative approvals.
26. The emerging health and economic risks resulting from the COVID-19 Pandemic and decline in international oil prices pose existential threats to Nigeria’s economy, healthcare system, national security, as well as the lives of our citizens. Accordingly, extra-ordinary measures will be required, as the situation evolves, to address these challenges.
27. I will continue to work closely with my colleagues at the Ministries of Finance, Budget and National Planning; Industry, Trade and Investment; Petroleum Resources; Health; as well as the CBN, to pursue greater coherence and coordination of Nigeria’s fiscal, monetary as well as trade policies, during the difficult days and months ahead. The Economic Sustainability Committee chaired by His Excellency, the Vice President, will continue to coordinate our efforts and strategies, as well as provide regular updates to Mr. President.
28. In closing, I wish to reassure our citizens and residents that the Federal Government remains committed to working closely with the National Assembly, the State Governments, Multilateral Organisations, the Donor Community, and the International Community at large, to alleviate the suffering of our people due to the ongoing economic and healthcare challenges.
29. I would like to particularly appreciate the extensive understanding and support that we have received from our development partners, especially the World Bank, the International Monetary Fund, the African Development Bank and the Islamic Development Bank in our efforts to grapple with the COVID-19 crisis.
30. Thank you for your time and attention, as well as your continued cooperation with the various measures Government has taken, at this time, to protect the health and lives of our citizens, our economy, as well as our national security.
ZAINAB SHAMSUNA AHMED
Honourable Minister of Finance, Budget & National Planning
Nigeria at COP28: Separating the facts from fiction
By Temitope Ajayi
The number of delegates from Nigeria attending the ongoing Climate Summit in Dubai otherwise called COP28 has generated a lot of controversies and strong social media conversations in the last 24 hours. It is important to set the record straight and provide some clarity. To begin with, the Summit is tagged COP which means Convention of Parties. The ongoing Summit in Dubai with over 97,000 delegates from more than 100 countries around the world is the 28th in the series since the issue of climate change and action took preeminent stage in global affairs. COP27 took place at Sharm El-Sheikh in Egypt last year.
When the world comes together to take actions on achieving a common goal and proffer collective solutions to a nagging global concern, there are parties involved from government, private sector, civil society, media and multilateral institutions. The people coming together to advance their different agenda and interests from governments, businesses and civil societies are the parties to the convention who represent various shades of opinions and pushing for various mitigating actions.
In Nigeria like so many other countries, interested parties comprising government officials from both the Federal and sub-national governments, business leaders, environmentalists, climate activists and journalists are present in Dubai. Also participating are agencies of government such as the NNPC and its subsidiaries, Ministry of Niger Delta Affairs, NIMASA, NDDC. Many youth organisations from Nigeria especially from the Northern and Niger-Delta regions whose lives and livelihoods are most impacted by desert encroachment and hydrocarbon activities are also represented. The President of Ijaw Youth Council, Jonathan Lokpobiri, leads a pan-Ijaw delegation of more than 15 people who registered as parties from Nigeria. Among delegates from Nigeria are also over 20 journalists from various media houses.
Their participation is very important. It is not for jamboree as it is being mischievously represented on social media.
It is important to state here that delegates from all countries whether from government, private sector, media and civil society groups attend COP summits and conferences as parties and the number of attendees are registered against their countries of origin. This does not mean that they are sponsored or funded by the government. It must be said also that the fact that people registered to attend a conference does not mean everyone that registered is physically present.
As the biggest country in Africa, biggest economy and one with a bigger stake on climate action as a country with huge extractive economy, it is a no-brainer that delegates from Nigeria will be more than any other country in Africa.
Among the delegates from Nigeria are UBA Chairman, Tony Elumelu, Abdul Samad Rabiu, Chairman of BUA group, and other billionaires whose businesses are promoting sustainability and climate actions through their philanthropies. These businessmen and women and their staff who came with them to promote their own business interests are part of the 1,411 delegates from Nigeria. Their trip to Dubai is not funded by the Federal Government.
United Nations Climate summit, by its very nature, commands attendance of big names from across the world – statesmen and women, politicians, lawmakers, corporate titans, journalists and activists, etc who promote big global agenda. So, people attend the summit for many reasons. And because climate issue is the biggest global issue of the moment, it is not surprising that over 97,000 people including Prime Minister Narendra Modi of India, King Charles of United Kingdom, Prime Minister of Netherlands, Mark Rutte, U.S. Vice President Kamala Harris, US Special Envoy on Climate Change and former Secretary of State, John Kerry, President Bola Tinubu, United Nations Secretary General, Antonio Guterres, World Bank President, Ajay Banga, International Monetary Fund President, Kristalina Georgieva, World Trade Organisation Director General, Ngozi Okonjo Iweala, Africa Development Bank President, Akinwumi Adesina, former US Vice President and Nobel Peace Prize Winner, Al Gore and almost 100 Heads of States and Governments converged on Dubai for COP28. It is the first of its kind in the history of the summit because of the importance of climate change to global well-being.
After the opening and national statements by Heads of States which began from November 30 when the summit opened and up until Saturday December 2, 2023, the real work of COP28 which are the technical sessions and negotiations, financing, etc will begin from Monday, December 4 till December 12 where agreements will be reached on many proposals for consideration and ratification by the parties.
Those with sufficient understanding and knowledge on climate matters know that issues around the subject have layers and multiplicity of factors that require experts from various fields. There are lined-up technical sessions on financing climate actions at sub-national levels, regions and local governments. State Governors from Nigeria such as Governor Babajide Sanwo-Olu of Lagos, Dapo Abiodun of Ogun, Umo Eno of Akwa-Ibom have been really busy with their officials at COP28, making presentations, speaking at panel sessions and pitching some of their sustainability projects to development partners and investors.
Multifaceted stakeholders from different countries including Nigeria are on ground in Dubai because they don’t want decisions that will affect them to be taken without pushing their own agenda. It is the reason delegates from China and Brazil are over 3000 respectively. China is one of the world biggest polluters and Brazil is at the centre of global climate debate with her Amazon rainforest. These two countries know important decisions that will affect them will be taken and they have to move everything to be fully on ground and ensure they are fully represented by their best brains at every level of discussion and negotiation.
Like former President Muhammadu Buhari and other African leaders who demanded fair deal and climate justice for Africa at previous UN Climate summits, President Tinubu is leading the charge at COP28 on behalf of Nigeria and the rest of the continent, demanding from the West that any climate decision and action must be fair and just to Africa and Nigeria in particular, especially the debate around energy transition.
President Tinubu has been unequivocal in his position that Africa that is battling problems of poverty, security and struggling to provide education and healthcare to her people can not be told to abandon its major source of income which is mostly from extractive industries without the West providing the funding and investment in alternative and clean energy sources. President Tinubu and other officials on the Federal government delegation are in Dubai for serious business not jamboree.
Our President has been very busy representing our country well. Since Thursday morning when he arrived Dubai, President Tinubu has spent not less than 18hours daily in attending very important sessions, pushing our national agenda whilst holding bilateral and business meetings on the sidelines.
-Ajayi is Senior Special Assistant to the President on Media & Publicity
How Aviation Sector Grew Under Hadi Sirika in 8 Years
The Nigerian aviation sector is tipped by Embraer in a 2020 report to experience the biggest growth in Africa in the next decade and more. The report estimated that Nigeria’s aviation sector has a prospect for an over $7.2 billion (over N3.3trn) annual Grosso Domestic Product Growth (GDP).
“With the implementation of open skies, according to a study on SAATM by Embraer (2020), in 2038, using traffic forecasts and economic impact estimates from ICAO, Nigeria’s aviation industry would contribute some $1.3 billion to GDP. That number would rise to $7.2 billion when factoring in the induced and indirect catalytic effects of tourism. Aviation could generate 800,000 jobs of which 60,000 would be directly associated with airline operations” the report indicated.
Also, a recent aviation sector study for Nigeria by International Air Transportation Association (IATA) in June 2020, showcases the significant contribution of air transportation to the National economy, by providing 241,000 jobs (direct and indirect) and a contribution of $1.7 billion to the National economy.
The FG projects that with the successful implementation of the roadmap projects, the overall goal is to grow the Aviation sector’s contribution from the current 0.6% to 5% (approximately $14.166 billion).
Thus, ahead of these reports, since 2015, the federal government of Nigeria deliberately began concrete implementation of open skies or The Single African Air Transport Market (SAATM) and Nigeria’s Aviation Roadmap. These policies were actively piloted by the immediate past Minister of Aviation, Sen. Hadi Sirika, and abled by President Muhammadu Buhari.
The Aviation Roadmap is chiefly to build tangible and intangible aviation infrastructure to unlock the over N3 trillion aviation annual economy and reposition even for greater growth.
The key components of the aviation roadmap according to the policy document include: Establishment of a National Carrier, Development of Agro-Allied /Cargo Terminals § Establishment of Maintenance, Repairs, and Overhaul (MRO) Centre, Establishment of an Aviation Leasing Company (ALC), Development of Aerotropolis (Airport Cities), Establishment of an Aviation & Aerospace University, and Concession of five International Airports (Abuja, Lagos, Enugu, Kano, and Port Harcourt.
Others include; the upgrade of NCAT into an ICAO Regional Training Centre of Excellence, the Designation of Four International Airports as Special Economic Zones, the Introduction of Policies on Remotely Piloted Aircraft, Adherence to Employment Policies on the Enforcement of Expatriate Quota, and the upgrade of AIB to a Multimodal Accident Investigation Agency – Nigerian Safety Investigation Bureau (NSIB).
After about eight years of sustained implementation of the roadmap and implementation of other enablers in the aviation sector, the aviation sector witnessed unpreceded growth in spite of the Nigerian economy experiencing a recession twice within the period.
Hadi Sirika Receiving the OBC Certificate from the former ICRC DG Engr. Chidi Izuwa
Giving a scorecard of the aviation sector recently, Hadi Sirika said “We have successfully debunked the claim that aviation doubles every 15 years. Currently in Nigeria, the number of airports including those currently being developed has doubled, the passenger number has doubled, other entrepreneurship including catering and ground handling has blossomed, the number of airlines and jobs has multiplied” he said adding that even the 2020 global pandemic could push back Nigeria’s aviation industry growth.
A cursory look at the roadmap deliverables showed that Nigeria Air, the most talked a bit item on the roadmap is about 90 percent completed. The due process on the project by the regulator Infrastructure Concession and Regulatory Commission (ICRC) has returned a clean bill of health, the outline business case approved, the core investor and other investors unveiled, the full business case is being developed for FEC to approve and the Air Operator Certificate (AOC) has passed the second stage of procurement at the Nigerian Civil Aviation Authority (NCAA).
“Nigeria Air has the strategic direction, with a solid business plan for the next ten years and a start-up budget of 250 million US dollars. The Nigerian Government only invests 5% into this start-up funding (12.5 million US dollars), in line with its 5% share in Nigeria Air. By the transparent and structured PPP process the Government has ensured a clear ownership structure, including the leading African airline, with a secured start-up budget which gives Nigeria Air a solid financial foundation” said Prof. Tilmann Gabriel, a researcher on African Aviation.
The benefit to be derived from the establishment of the national Carrier are; reduction of capital flight from Nigeria; gain of the optimal benefit of BASA and SAATM; development of an Aviation hub; contribution to the GDP; facilitate hospitality and tourism; facilitate growth and development of the Nigerian Agricultural Sector; and create jobs around the Agro-Cargo Terminals.
Designation of five International Airports (Lagos, Abuja, Enugu Kano & Port Harcourt) as Special Economic Zones. Mr. President approved the designation of the Four International Airports as Special Economic Zones on 17th May 2021. The next step is the commencement of Implementation processes with NEPZA is ongoing. The Benefits of Special Economic Zones are i. more efficient and business-friendly trade environment with less bureaucratic red tape because of the associated fiscal incentives and packages; ii. attract world-class international and local Airlines/Companies into the Nigeria Aviation Industry; iii. attract investment incentives which include; Investment Policies and Protection, General Tax Based Incentives, Sector Specific Incentives, Tariff Based Incentives, and Export Incentives; iv. attract Foreign Direct Investment (FDI) and generate employment opportunities and human capital development, thus stimulating the overall improvement of the Nigerian Aviation Industry; v. improve the overall ease of doing business in Nigeria and more.
Airports to be Concession are as follows: – Murtala Muhammed International Airport (MMIA) Lagos: a. Old International Terminal – Terminal and Ramp b. New International Terminal – Terminal, Ramp, Car Park c. Cargo Terminal – Ramp – Nnamdi Azikiwe International Airport (NAIA), Abuja, Port Harcourt International Airport (PHIA), Port Harcourt and Mallam Aminu Kano International Airport (MAKIA), Kano a. Old International and Domestic Terminal – Terminal, Ramp, Car Park b. New International Terminal – Terminal, Ramp c. Cargo Ramp. (To be developed). The current position is that Negotiation with preferred bidders on-going. Draft Full Business Case (FBC) finalized and the FG is targeting a completion period – 2nd quarter, 2023.
Establishment of An Aviation Leasing Company (ALC) An Aviation Leasing Company which would be private sector-driven will be established to address the challenges of limited access to capital and high cost of funds. The ALC will provide leasing opportunities for Nigerian and African airlines in order to boost fleet size, and alleviate the problem of aircraft leasing and high insurance premium charges. The current status is that a Full Business Case (FBC) has been completed and a certificate of compliance issued by the ICRC. And awaiting FEC approval. Project to commence operation by the 2nd Quarter, 2023 based on the projection.
Establishment of a Maintenance, Repair & Overhaul (MRO) Centre. The establishment of a private sector-driven Maintenance, Repair, and Overhaul (MRO) Centre is critical for the diversification and repositioning of the Aviation Industry as it provides aircraft repairs, overhaul, and maintenance services. Experts say currently this facility does not exist in the whole of West and Central Africa. MRO is therefore a necessary requirement to facilitate the development of the aviation industry.
The proposed facility will have the capacity to serve both Narrow and Wide Body aircraft maintenance requirements and will be located in Abuja. The Full Business Case (FBC) has been completed and a certificate of compliance was issued by the ICRC, which was subsequently approved by FEC.
Development of Aerotropolis (Airport Cities). The FG anticipates that the development of Nigeria’s major commercial airports and surrounding communities into efficient, profitable, and self-sustaining commercial hubs through increased private sector participation and Foreign Direct Investment (FDI) will create jobs and grow the local industry. The project will be structured as a Public Private Partnership (PPP) arrangement where the private partner will be required to design, develop, finance, and maintain the Aerotropolis during the agreed period.
The Aerotropolis will contain the full complement of commercial facilities that support airlines and aviation-linked businesses. Other components of the project include the development of hospitality and tourism-oriented real estate assets; and ancillary support infrastructure. Currently, the land has been acquired, and the process for the selection of a preferred partner has commenced.
Development of Cargo/Agro-Allied Airport Terminals ..2 To take advantage of the high-value agricultural products potential of Nigeria, the need arose to develop dedicated Cargo/Agro-Allied Terminals and ancillary infrastructure in each of the six (6) geographical zones of the country to facilitate the movement of fresh produce by air. The terminals will be established via a Design, Build, Operate, and Maintain model of Public Private Partnership (PPP). The proposed terminals will have facilities such as a dry Cargo Terminal Warehouse; a Perishable Cargo Terminal with Cool Chain Storage; climate chambers for storage and handling of temperature-sensitive products including Pharmaceuticals and Bonded Warehouses. The procurement phase is ongoing and the selection of the preferred partner is ongoing with a target of the second quarter of 2023 as a completion target.
The establishment of Aerospace University. The school is tipped to arrest of the dearth of high-level management cadre in the Aviation Industry. it will also promote Aviation Research and Development. Already the concept note has been presented to NUC for their consideration. African Aviation & Aerospace University (AAAU) courses to commence 2nd Quarter 2022.
Commenting on the aviation roadmap Prof. Tilmann Gabriel said “The Buhari Government had promised a new aviation industry which the future of Nigeria can rely on. It took hard work by the many involved, driven by a Minister of Aviation never tired of pushing this Buhari strategy in the last seven years.”
Also commenting Prof. Mansur Bako Matazu, the Director-General, of the Nigerian Mereological Agency (NiMet) said one of the components of the roadmap is the creation of an Aviation and Aerospace University which is already happening.
He also said the roadmap is providing incentives for professionals to stay. “This will curtail the mass exodus of professionals for our great industry with all the huge potentials” he stated.
He also said the roadmap has yielded partnerships with other countries and these have helped to improve the industry.
According to the DG with the roadmap implementation, most of the agencies now have their specialized training centers including NiMet.
“We now operate two accredited schools where we offer Diplomas in Meteorology and Climate Change. We will soon upscale to HND other short-term courses.:
Prof. Matzo also said “The roadmap has encouraged entrepreneurship and innovation. These components could impact reduction in brain drain and most of these have been captured by the roadmap implemented by the Federal Ministry of Aviation: he stated adding that all aviation stakeholders were a part of the development of the document.
THE END OF A DARK HISTORY OF FAILED EFFORTS TO ESTABLISH A NATIONAL CARRIER FROM 2001 –2022: WHY NIGERIA AND NIGERIANS SHOULD CELEBRATE SENATOR HARDI SIRIKA
By Daniel Young, PhD
THE STORY OF NIGERIA AIRWAYS- PART 1.
Asking the country to go back to 100% ownership of the national carrier is tantamount to repeating the very problems that created the failure of Nigeria Airways Ltd. Nigeria Airways, became a national carrier when it rebranded from West African Corporation Nigeria in 1971. Before this time, the government of Nigeria owned a majority share of the airline 51% and foreign investors owned 49% which is the exact model of what the now Nigeria Air represents; the only difference now being, that the 51%, that originally belonged to Nigerian government, is now being shared between the government: 5%, and local investors 46% while, the rest of the 49% has been earmarked for foreign investors.
When I read some posts by those who have kept insisting that we should own the airline 100% as Nigerians, I am reminded of the saying that, “those who would not learn from history are bound to repeat the same mistakes” Government ownership of the airline, which became the new model after 1971 acquisition of the airline 100% marked the beginning of the downward spiral that eventually led to the death of the organization in 2003 began.
There is no point rehearsing the history of the rise and fall of Nigeria airways, but one thing is clear, from the time the first cracks of failure began to show, many investors, consultant- necromancers, fake airlines and port-folio experts of different sizes and shapes and shades have shown up before successive administrations with magical solutions and ideas to resuscitate the dying airline or now dead airline.
Some have been legitimate, others, vagrant and criminally intentioned. The sum being that, over twenty intervening years between these attempts at solving the same perennial problem of establishing national airline have come and gone; with no enduring solution until Senator Hardi Sirika came on the scene.
With no prejudice, I was, at a time very skeptical about Sirika’ programs and did not waste time to condemn what I thought at the time to be incongruous with established protocols for founding an airline. I utilized every available opportunity to condemn and criticize his programs as some as still wont to doing.
May I submit, that you can call Sen. Hardi Sirika by any name you may wish, but there is no denying the fact that, he is a very deliberate man who learns quickly, and is ready to take corrections where necessary. It is this conscious approach to learning against the barrage of criticism from all quarters that has led him to this point where we could almost declare with confidence: Nigerian, behold, Nigeria Air!
ENTER 2001. KEMA CHIKWE’s AIR NIGERIA
In 2001, armed with IFC and BPE approvals Dr. Kema Achikwe was confident she would be able float a national carrier with Atiku primed to take over Nigeria Airways as an investor. The new airline was dubbed: Air Nigeria.
Unlike Sirika’ model marked by wide consultations across all stakeholder groups, the floatation process that followed Kema Achikwe’ idea was shrouded in mystery. The core investor that provided a special purpose vehicle for this fraudulent transaction was “WING AEROSPACE” incorporated in the UK with One British pound as paid –up equity. Behind this scam were two Asians who claimed relationship with Singapore airline as Technical partners; which was later found to be false by a team of investigators from AON.
These men came into Nigeria with no funds to invest; did not have the technical expertise for the role they intended to play but yet, were offered 40% equity in Air Nigeria. The following represent some of the numbing facts of that transaction which are now facts of history:
• Air Wing Aerospace was appointed partners 2 months before it was incorporated in the Uk. A clear case of backward integration.
• They had no track record or financial resources as investors.
• Air Wing Aerospace was handed over six Nigeria Airways prime properties by the Minister as collateral to raise start-up funds from Nigerian banks.
To be continued…
- February 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- August 2023
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Tinubu Directs Immidiate Implementation of Oronsanye Report
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