AM EDITORIAL: Making Nigeria’s Aviation Industry Conducive For Investment
There are baits for investment in any sector of an economy, including the aviation industry and government’s responsibility is to provide an environment that is conducive and attractive to investors. No sane investor will take pleasure in throwing hard earned resources into an environment where investment security is not guaranteed.
The role played in recent months by the Federal Ministry of Aviation & Aerospace Development in the release of foreign airlines’ trapped funds in Nigeria and the efforts to encourage local airlines to upgrade their operational standards to levels that enable them compete with their foreign counterparts is commendable.
However, there is so much ground yet to be covered in efforts to attract more investment to the sector. There is a need for deliberate and genuine effort to address obvious challenges posed by escalating cost of operations, including the fuel component of airlines’ operational costs which has severely constrained their finances and affected allocations to various expense headings, including aircraft maintenance, staff salaries and even terminal benefits owed to former employees.
The calls for more investment in Nigeria’s aviation sector would remain a mockery until potential investors begin to see compliance with international best practices in decision making by both aviation supervisory authorities and private players in the sector. To generate interest in investment, there has to be transparency in bids for concessions and consultancy engagements, especially when they involve movement of responsibility from a government agency to a private concern.
Instability in the exchange rate of the naira to the dollar is scary to potential investors and needs to be addressed by the Central Bank of Nigeria (CBN) as soon as possible if further massive investment in an industry that has recorded high airlines mortality rate over the years, is expected.
Proper structuring and elimination of gray market in every sub sector of Nigeria’s aviation industry is an emergency. For instance, there is poor structuring of general aviation business which amounts to loss of government revenue in form of Ticket Sales Charge (TSC) that ought to be paid by gray market operators to the Nigeria Civil Aviation Authority (NCAA) in line with regulations. This sector ought to be a breeding ground for young pilots to acquire necessary experiences for greater opportunities but because it is not structured properly, genuine investors’ interest is dwarfed. Besides, gray market operation is a safety threat.
Above all, there is need for effective oversight and monitoring of activities of players in the sector, devoid of political interference. Where this is absent, there is no way new investors will build confidence to invest in Nigeria’s aviation industry. AM
