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
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…
Peter Obi and the Passion That Drives Him
“Tai, the mind retains whatever you want it to, and rejects whatever you don’t care about,” – HE Peter Obi.
By Tai Emeka Obasi
The master was teaching me the ingredients of passion. It was sometime in 2018. He was the guest speaker at a Dinner-time Conference organised by the Association of All Federal Government/Unity Schools in Nigeria. I can’t recall the theme appropriately but it was basically about the importance of Education in the development of mankind.
That was the first day I witnessed him bring in the Human Development Index, HDI to illustrate the importance of Education and of course, compared many nations’ HDI to Nigeria’s in the major departments of determination – Education, Income Per Capita and Life Expectancy.
Of course, our country was, and still is, languishing so pathetically down the ladder than her evident human potentials deserved. Another very demoralising pointer to very bad leadership.
We arrived Port Harcourt late. The event was slated to take off by 10.00 pm. We barely made it. He arrived via Akanu Ibiam International Airport, Enugu early enough but he had some burials to attend in Anambra State before we headed to Port Harcourt by road.
The hall was already filled to capacity when he entered. About twenty minutes later he took the stage. I knew what he was capable of but even I was truly amazed at the way he reeled out figures upon figures of comparisons which involved digits of less than whole numbers of over 15 nations from memory.
So, on the way from the event hall to the hotel, I was forced to ask him, “how do you retain all these figures from memory, Sir?”
I had to ask because I was with him from around 10 a.m he arrived via Enugu until he delivered that mind-blowing speech and I never saw him looking at any typed paper all the way. If he prepared any notes, he must have done that earlier and left the notes behind before arrival. Geniuses come in different spheres.
“Tai, the mind retains whatever you want it to and doesn’t bother with whatever you’re not interested in. It has a lot to do with passion,” he responded. He went on to express more.
When we entered the hotel, a football match was going on. It was one of the matches of the Russia 2018 World Cup finals being replayed. The date was June 30, same day both Lionel Messi and Cristiano Ronaldo were sent packing from Russia by Kylian Mbappe’s France and Luis Suarez’s Uruguay respectively.The master took one look at the screen and asked me, “what happened at the World Cup today?”
“Both Messi and Ronaldo were knocked out today,” I responded.
“What? Oh, no. The World Cup is over then,” he returned as we entered the lift.
Yes, he barely has time to sit down and watch but he loves football. He has great respect for both Messi and Ronaldo. When pushed to compare the duo he prefers one over the other and has his specific reasons. If you listen to why he does you’ll be convinced but that is a matter for another day.
Today, we’re discussing passion. That night, early morning really, because we arrived late, it dawned on me that he was spot-on as always. The word is passion. He knew that I would always follow World Cup matches via the Internet, wherever I was, however tight the functions. He knew if there was any person to ask anything about football that he had me handy.
Yes, I started listening to radio football commentaries before I was 10, as a child growing up in the village. I can recall many of Ernest Okonkwo’s commentaries and not be too far from the original. I can recall scores and even scorers of some matches of then great Rangers International of Enugu, Nigerian national teams and also of Arsenal’s football club of England.
I can recall stories, plots and even dialogues of many of the James Hadley Chase’s novels I read over 30 years ago. I can recall same about most, if not all, of Frederick Forsyth’s great works, particularly The Devil’s Alternative.
I can recall many dialogues of good movies particularly as delivered by Al Pacino. When it comes to Scarface and Devil’s Advocate, I can recall almost all.
Now, it’s all about what I want my brain to retain. That’s why such passion diverted me after being trained five years as an engineer into writing. But this is not about me.
This is about the master. While I search the internet for Arsenal results and scorers, he searches for new population of China, India, etc and compares it to Nigeria’s. While I search to know other results to compare Arsenal’s standing on the League table, he searches for LNG potentials of Nigeria compared to those of Egypt, Russia and how best to maximise the enormous potentials for the future of Nigerian youths.
While I search Amazon.com to check how many copies of the latest Frederick Forsyth novel sold in the past week, he searches for the projected prices of crude oil in the next decade and the cumulative impact in Nigeria’s and world economy. He searches for the current GDP of Apple Company and the importance of the new order called Knowledge Economy. And how his dear country should depend less on fading oil, direct her very talented youths towards Science, Technology, Mathematics and Science, STEM education that will be the catalyst of employment and lifting millions out of poverty.
If I search today for the names of writers of the movies nominated for this year’s Oscar, be assured he will be searching the internet for possible companies that can effectively provide expertise and the financial institutions that can provide appropriate loans at best interest rates to move Nigeria’s electric power generation from the pathetic 4000 mega watts to 20,000 mega watts within four years of his presidency if Nigerians give him the mandate.
If I search for the bestselling thriller on Amazon.com, he’ll most likely be searching to know exactly how Bangladesh assisted SMEs to be able to lift millions out of poverty and then be thinking of how to apply Nigeria’s peculiarities to lift at least 50 million people out of poverty in four years.
If riches become horses, Nobel Prize will be the ultimate reward.
I certainly will be overreaching my bounds to dream of a Nobel Prize for Literature when Prof Chinua Achebe didn’t get one. But thinking of a Nobel Prize for the master for Good and Effective Leadership will not be an overstatement. He lives and dreams of how to improve mankind. And take this from me, if HE Peter Gregory Obi becomes the president of Nigeria and has the opportunity of delivering what is presently in his brain for the country, a Nobel Prize will be his parting gift.
Don’t think I am just writing for the pleasure of my readers. I’m just telling you about the man I know and the passion that drives him. He doesn’t do anything having awards in mind but his best will always attract top awards because his bests are always excellent. And more – HE GIVES HIS BEST IN WHATEVER HE CHOOSES TO DO.
Just get your PVC.
DEFINING A NATIONAL SELF INTEREST-LESSONS FROM A BASA AGREEMENT GONE SOUR
By Tunde Adeniji
The DG NCAA Captain Musa Nuhu recently issued a Press release, conveying the decision of the Honourable Minister of Aviation Sen. Sirika Hadi to replace the operating schedule approval for 21 frequencies/week given to Emirates airlines with 1 weekly Frequency. He had relied on the spirit and letter of the Bilateral Services Agreement (BASA) between the two countries in responding to the single slots weekly offered to Air Peace at Sharjah Airport. The DG’s letter ended with his assurance to members of the public that national interests in all Aviation matters will be jealously protected.
The Aviation Policy and Strategic group discussed the fallout from this decision exhaustively, deconstructing the issues involved, even as its erudite members put forward many good suggestions about how to proceed. The engagements have been rich and enlightening and our intention in contributing to this discourse is to focus on the need to define a National Self Interest in a robust policy framework to guide future BASA/external Aviation relations engagements.
This need is justified based on our experience as a Nation which seems to suggest that we may be haunted yet again by the many decision makers who fell into the trap described below by Jon Moen:
“People who are managing a (financial or economic) crisis are not immune from personal motivations…Sometimes the people in charge don’t know at first that their personal motivations and past experiences might not be compatible with what is best for the greater good.”
We view National Self Interest ‘’As the overriding purpose governing the state’s relationship with the outside world, it serves two purposes. It gives policy a general orientation towards the external environment. More importantly, it serves as the controlling criterion of choice in immediate situations. The dominant view of national interest, in other words, dictates the nature of a state’s long-term effort in foreign policy and governs what it does in a short-term context’’.
The concept of Bilateral Air Services Agreement (BASA) is the outcome of the compromise between the Open Skies advocacy of the US and the strong opposition by the UK and European countries, as a protection from their inability to compete with the formidable dominance of the US in post WW2 world. The delegates at the Chicago convention therefore agreed to a regime that allowed every country complete and exclusive sovereignty over its airspace with the provision that permissions were to be negotiated between contracting states on a bilateral basis. There are at least three different models of BASA, with varying levels of liberality, as may be agreed by the parties to it. We may therefore consider is a contract that should be mutually negotiated like any other
Slots on the other hand ‘’is the most emotive subject in civil aviation. It is the approval from an appropriate authority to take off at a particular time at one airport and land at its destination at another time. The difficulty arises in so called coordinated airports i.e., congested airports where there are severe capacity limits at certain times of the day. It subsequently dictates the difference between operating a route or not’’-D.H. Bunker
The Adam Smith model of Self-interest as the motivator of economic activity with competition as regulator to ensure the market runs efficiently without intervention, is situated below:
“It is not from the benevolence (kindness) of the government (of UAE), Its flag carrier (Emirates), or Airport (Sharjah) that we expect access to Air Peace, but from their regard to their own interest.”
It is important to state at the outset that the self-interest we advocate is (in the words of Lauren Hall) consistent with the demands of justice and becomes the germ from which virtuous, fair behaviour grows, to drive the larger economic engine of society.
In clear economic terms slots represents a barrier to entry and airlines awarded slots benefit from an economic rent. A system established to ensure stability has slowly become the property of the airlines. Slots are sold at a remarkable premium or used as a tool to exert unfair competitive pressures. It has been reported that many European countries who oppose the sale of slots, do so on the principle that, a private firm cannot benefit from a public good (Mackay 2008)
The decision to operate slot system or not remain those of the relevant airport and can be considered “its own internal cuisine‘’ just as ‘’A country’s motivation is its own concern, but the righteousness of its actions is the concern of all’’.
Nigeria like other states deliberately follow certain policies in pursuit of their national interest. The current face off with UAE, shows clearly that we have been a bit too eager to give than to receive or at least gave out before we received.
Our BASA is seemingly driven by the needs and ease of other countries. We have offered multiple entry points to countries, even where our own carriers have faced issues with slots for decades. These incongruities have never been convincingly explained to operators and other stakeholders
We have a unique opportunity to review our thinking and position in this area, especially as our slow adoption of Single African Air Transport Market (SSATM) and African Continental Free Trade Areas (AfCFTA) is totally in sharp contrast to our rush to embrace these dominant international brands
Our policies can start by ensuring that the investment by Nigerian carriers is complimented by access to the best of our facilities as no other country will ever offer them same.
A crisis, they say, is a terrible thing to waste, and so we suggest that the minimum positive outcome from this saga should be a comprehensive policy paper that will spell out in clear terms, how Nigeria will take actions that will reduce to the barest costs and increase to maximum benefits its engagements to further our National Aviation Interests.
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