Stakeholders chart course for aviation development in Nigeria –
As airports and airlines around the world begin the process of rebounding from the impact of Covid-19 on the global socio-economic space which has slowed global travel, aviation operations and revenue generation, conversations have become necessary to kick-start development in the aviation sector.
Part of the conversations would be to identify and analyze the positive aspects of the challenges of COVID-19, with a view to consolidating them and fostering sustainable development in the aviation industry.
In addition, the trade and investment sessions, where investment opportunities in the various airports in Nigeria will be showcased, are also key to reviving the sector.
Stakeholders including airlines, handling companies, aviation agencies, concessionaires and security agencies discussed steps to be taken to advance the country’s aviation sector during the first edition of the Federal Airports Authority of Nigeria (FAAN) National Aviation Conference (FNAC) on the theme: “Advancing the Frontiers of Possibilities for Safe, Secure and Cost Effective Air Transport”, in Abuja.
At the event, investors also received first-hand information on how to partner with FAAN on mutually beneficial business deals.
Rabiu Yadudu, Managing Director of FAAN, said that the authority aims to develop a working document that would be forwarded to all stakeholders for immediate and sustained action and to organize an annual event, where we continue to work on ideas aimed at building on and implementing the resolutions adopted at previous conferences.
Yadudu said Nigeria’s potential and capacity in the global air transport industry is grossly underutilized, adding that if Nigeria wishes to achieve major player status in global aviation, now is the time. come to reposition and move the industry forward.
He said the focus is on Nigeria because Nigeria has the largest aircraft fleet in the sub-region.
He revealed that in 2021, Nigeria was reported to have lost $2.5 billion (around N1.25 trillion naira) in MRO investments to neighboring countries, implying that such investments here would have created more employment opportunities for Nigerians, income generation and training of technicians. aircraft maintenance personnel.
“The interconnection and value chain between air transport, tourism and the hospitality industry for economic growth cannot be overstated. Today, the Eiffel Tower in Paris, the London Bridge, the Dubai Mall, Burj Khalifa, the British Museum in the UK, among others, have all been consciously developed into major tourist attractions that drive passenger traffic to these destinations and by implication,” he explained. .
Yadudu said that according to the International Air Transport Association (IATA), the aviation sector supports 241,000 jobs, gross value added of $1.7 billion and contributes 0.4% to the GDP of the country. Nigeria.
He revealed that the outlook by 2037 includes 14.8 million passengers and 555,667 job opportunities.
He revealed that Nigeria ranks 127th out of 136 countries in visa openness, 16th out of 136 countries in cost competitiveness, 68th out of 124 countries in the Air Trade Facilitation Index and 36th out of 135 countries in the eFreight Friendliness Index (EFFI).
Contextual issues in aviation
FAAN MD listed some contextual issues in the aviation sector including overburdened and neglected infrastructure, recent infrastructure renewal drive, general national insecurity, high cost of capital/operating funds , foreign currency instability, nascent tourism, a relatively low level of international trade, domestic energy challenges, the global rise in the cost of aviation and other fuels, and operator service failures at all levels.
Read also: Covid: reforms needed to retain ground handling talent in aviation – IATA
Other issues listed include passenger restlessness, operators seeking profit from standards, and human factors issues (aging and insufficient workforce, training and certification issues, etc.). ).
In order to address these issues, he said, the government must prioritize aviation in national planning; financial institutions must mobilize resources, operators and regulators must involve the public, while partners and operators must provide effective infrastructure (airports, navigational aids, weather, etc.).
As airports seek to attract investment amid the impacts of COVID-19, experts said Aerotropolis (Airport City) has become the engine of economic transformation at airports and the states where it exists.
Aerotropolis is considered the easiest way to diversify and increase an airport’s aeronautical and non-aeronautical revenue, thus, it has saved many airports that are not breaking even due to low passenger traffic.
Also speaking at the conference, Hycienth Ngwu, Managing Director, Business Development, FAAN, said Aerotropolis has the ability to drive airports as well as the entire economy of the city and reposition the state where the airport is located in an ideal center for trade, investment and tourism.
Ngwu said some of the lessons to be learned from current airport statistics are that businesses thrive where there is an effective and efficient business continuity plan and that FAAN-operated airports are typical examples of a business model. shock resistant due to management’s “Strategic Business Continuity Plan”. ‘
He assured that investments in airports always appreciate.
He listed some investment openings in the airport to include Aerotropolis (airport city), shopping and mixed-use centers, office complexes, estates, parking lots, land and rail transport, hotels, malls resorts, recreation and entertainment facilities, aircraft hangars (maintain, repair and overhaul), aircraft equipment rental companies, jet bridges, agro-allied and cargo facilities, warehouse services, depots of aviation fuel, fire hydrant system, waste and water management, lounges, banking pavilion, free trade centers, terminal management, advertising and branding, among others.
He said the government had promised low land premiums and rents on its land and low cost of production to investors seeking to invest in Nigerian airports run by FAAN.
Other benefits listed for airport investors include ease of doing business at airports, favorable terms of engagement, easy access to staff for quick solutions to challenges, competitive pricing and high investment income .
“Investors can also access the 1 Billion Naira Nigeria-Africa Trade Investment Program (NATIPP) launched jointly by the Nigerian Export-Import Bank (NEXIM), African Export-Import Bank (AFREXIM) and the Nigerian Export Promotion Council (NEPC) One Product One State Initiative of the National Export Promotion Committee (NCEP) can easily be activated and implemented,” Ngwu added.
Ease of doing business: Boosting airport investments
Ease of doing business has been identified as a panacea to boost airport investment in Nigeria.
Adeshina Emmanuel, Director of the Investment Promotion Department of the Nigerian Investment Promotion Commission (NIPC), said that investors wishing to invest in the aviation sector in Nigeria will be assisted by the NIPC to address challenges related to investment in Nigeria and help connect potential foreign investors with domestic partners. .
He also assured that the commission will facilitate discussions with government agencies and policy makers, provide investors with quality information to help them implement their investment plans in Nigeria and facilitate the contribution of investors to the investment process. policy development.
Unleashing Opportunities in Air Cargo
Air freight remains an important source of revenue in aviation.
There is an estimated $250 billion revenue potential for the air cargo value chain in Nigeria, with opportunities for states and huge opportunities for job creation.
“Air cargo presents opportunities for countries to increase internally generated revenue, link to global value chains, take advantage of AfCFTA opportunities and tap into a huge population of the diaspora,” said Muda Yusuf, CEO of the Center for the Promotion of Private Enterprise (CPPE) at FAAN. aviation conference said.
Yusuf also hinted that air cargo drives economic diversification in states, presents opportunities for higher foreign exchange earnings, and builds an inclusive economy for states.
In order to facilitate air cargo in Nigeria, he said states need to create an enabling environment for investors across the supply chain, support infrastructure for investors in the business and develop free trade zones. export to states that will be linked to air cargo facilities. and building support from the host community.
He said the state cluster strategy for export development would strengthen localization economies; increasing productivity through specialized inputs, access to information, synergies, access to public goods including infrastructure and improving the effectiveness of government intervention efforts to support small industries.
He pointed out that strong clusters have the ability to attract larger domestic and foreign investors.
If the positive aspects of these myriad challenges facing the country’s aviation sector can be analyzed with a view to consolidating them and fostering the sustainable development of the aviation industry, then the sector can grow and contribute reasonably to the economy of the country.