By: Chris Agabi
There is no doubt that the Nigerian aviation sector is underperforming relative to its peers in Africa and elsewhere in the world. The sector still contributes a paltry figure – less than one percent to the country’s GDP – yet it has the capacity to put in at least 5 percent. Based on available statistics, relative to the country’s Gross Domestic Product (GDP) of N80.3 trillion ($509.9 billion), Nigerian aviation contributes a meagre $0.7 billion or 0.4 percent as at 2015.
But will this narrative change going forward? Industry watchers agree that some good foundations have been laid in the sector from 2015-2019 and that if they are allowed to crystallize, they will cause positive development in the aviation sector going. These foundations will also cause significant private sector interest in the sector that has largely seen government investments, especially infrastructure.
A one-time minister of aviation had put the amount of private sector investments needed in the sector at about $5 billion in three years.
One of the critical foundations that have been laid by the immediate past Minister of State, Aviation, Sen. Hadi Sirika, is positioning Nigeria as a regional aviation hub.
Aviation experts say for Nigeria to really tap significantly its potentials in aviation business, it must attain the position of a regional hub, connecting more destinations across Africa and other continents.
Sen. Sirika also agreed that Nigeria has the capacity of being a regional hub because of its strategic location, population and resources hence his commitment to promoting the initiative. To fast-tract developments in the sector, he said the private sector must invest hugely in aviation with the Federal Government providing all necessary enablers. Key among the projects include the National Carrier (Nigeria Air), the Aviation Leasing Company (ALC), the Maintenance, Repairs and Overhaul (MRO) Centre, Aerotropolis (Airport Cities), and concession of the four big airports (Abuja, Lagos, Kano and Port Harcourt).
Transaction advisers have been appointed to develop best viable business cases for the facilities under the full regulation of the Infrastructure Concession Regulatory Commission (ICRC). Most of the transaction advisers have turned in their reports.
Recall the Outline Business Case (OBC) Certificate for the National Carrier, the MRO and the ALC were presented to the then minister of state aviation, Sen. Hadi Sirika, by the acting Director-General, ICRC, Engr. Chidi Izuwah.
The landmark presentation showed the projects were viable for both private sector and the government to invest in. The certificates also clearly defined the investment architecture in the companies for both the private sector and the government. The level of aviation should deliver on these projects.
Already, funds have been allocated in the 2019 budget for the procurement of the national carrier- Nigeria Air – that was previously suspended over budgetary and technical issues. Indeed without a national carrier or a robust flag carrier, Nigeria can’t achieve a regional status.
Also, as a part of these foundations, some critical projects were initiated, executed and commissioned in the last four years – all a part of the road towards getting the right facilities and critical infrastructure for a regional hub.
These projects are over 150 based on official information. Some of the projects were inherited from the previous administration but the majority were initiated and completed within four years by this administration. “Out of these 157 projects, 134 have been completed 100 per cent. Most of them were new projects that we started and completed 100 per cent; few of them are in excess of 50 per cent completion,” Sirika told journalists recently at one of the commissioning at the Abuja airport.
Specifically, some of the projects include; runway facilities: The rundown runway at Nnamdi Azikiwe International Airport Abuja was fixed by this government. The second runway is being planned for the airport to accommodate the volume of traffic that is anticipated with a regional hub status and with a national carrier coming on stream. Beyond the runway, Sen. Sirika also paid attention to the terminal buildings across the country.
The terminals provide passengers with comfort and these are the facilities the passenger interacts with the most. Once passengers are dissatisfied with the terminals, it impacts on their flying culture. Thus, government has made sure the new international terminals that have been under construction with a loan facility from China were completed and commissioned. President Buhari commissioned the new international terminal in Port Harcourt and Abuja; the ones in Kano and Lagos are also at the verge of completion.
The huge investment in terminal infrastructure also led to the certification of Abuja and Lagos international airports. The airports were certified by the Nigerian Civil Aviation Authority (NCAA) having met the International Civil Aviation Organisation (ICAO) safety standard for the first time since inception of the aviation industry in Nigeria.
During the last weeks of his tenure, Sirika commissioned a number of projects. Key among them include; Aviation Security Training School, Lagos Aviation clinic, Lagos, and NAMA’s radio communication equipment in Lagos.
In Abuja, the Terminal D was commissioned, the emergency centre, a 10 megawatt independent power plant built to provide complementary power at the Abuja airport, the accident rescue centre for emergencies, and the fire watch tower at General Aviation Terminal.
All these are critical infrastructure and will be key to Nigeria as an aviation hub. It’s not immediately clear if Sen. Sirika will return as aviation minister to drive the aviation road map.
However, one thing is certain, a new aviation minster might not share in Sirika’s passion, vision or model, thus might introduce his or her style.
Again, one cannot immediately tell the impact of this on the aviation sector road map. It might be positive, it might be negative. Going by hunches, before 2023, Nigeria should have the national carrier, the MRO, the ALC and have private sector dominance in aviation infrastructure provision.
By this time, Nigeria should command a regional hub status, driving over 100 million passengers annually and might have attracted about $10 billion in private sector investments across the value chain.