AM EDITORIAL: Removing Investment Impediments From Nigeria’s Aviation Industry
We found it appropriate to hear the representatives of His Excellency, President Bola Ahmed Tinubu, Minister of Aviation & Aerospace Development, Mr. Festus Keyamo (SAN), Managing Director, Chief Executive of Federal Airports Authority of Nigeria (FAAN), Mrs. Olubunmi Kuku and some state governors, make efforts to woo investors in their presentations at the FAAN National Aviation Conference 2025 held at Eko Convention Centre, Lagos, Nigeria.
However, a lot needs to be done to remove hydra-headed impediments to investment in the sector so as to attract investment. Although huge population and strategic geographical location are good marketing tools before potential investors, these may not automatically translate to investment attractions where there are dissuading policies that create uncertainties in investment considerations, unclear overall development destination, insecurity of investment and the investor, visible avoidable lingering conflicts in existing business partnerships and cultural loyalty to individuals rather than institutions, which result in compromise of law enforcements.
A country where airports are established indiscriminately more for reasons of political patronage, an individual governor’s pleasure and collective ego trip, rather than commercial considerations, rather than more importantly, a strategic, sustainable, integrated and uninterrupted national aviation development plan, will struggle to attract long-term serious investors.
For instance, most of the roads in Ogun State are bad. Farmers struggle to move their produce by roads to nearby markets because of dilapidated state of the road network. A road like Aiyetoro-Itele and Aiyetoro-Lafenwa roads in Ado Odo Ota Local Government border are link roads to Lagos. Potential investors, residents and business people go through severe troubles attempting to move from one place to another. The State Government could claim that the said roads are outside its purview since they are federal constituency roads. This argument itself amplifies the error of soloed method of operation in the integrated transportation system. Besides, Murtala Muhammed Airport in Lagos is very close to the Ogun Gateway Airport that has just been constructed in contrast to actual people-oriented priority in Ogun State, which is good road network.
Many other airports constructed by state governments also fall into this error of projects that do not align with general public good and a well thought-out coordinated national aviation plan that could attract a long term financier.
For instance, the number of commercial airports in California, a state in USA, is 25 while number of passengers is 600,000 per day. Nigeria as a country has over 30 airports with record of about 43,000 passengers from all the airports per day with over 90% of total traffic coming from less than four airports.
While Murtala Muhammed International Airport in Lagos recorded 6.5 million passengers in one year with an investment of $1.75 billion, Los Angeles International Airport in USA records 76.5 million passengers under a $3.5 billion spending. Heathrow Airport in the UK records 83.9 million passengers with $15.6 billion investment and Dubai International Airport records 92 million passengers with $4.0 billion spending. Investment plan has to make sense to the financier to win a financier’s interest in investing.
Huge population and strategic geographical location do not automatically translate to a good investment haven if the right things are not done by those who should do so, or if investment destination is not properly structured for good Return-On-Investment. Passenger traffic dropped, not because there are no people in the country but because of poverty level of the populace and poor purchasing power of this population.
According to Mr. George Uriesi, an airline operator, before a Nigerian airline fixes the price of its ticket, it already has taxes worth $180 to pay. The NCAA new policy on Advance Passenger Information System (APIS), which increased Nigeria’s security levy to $31.50 per flight ticket instead of initial $20, raises it to $200. Other remittance demands include ground handling, insurance costs, VAT, five per cent fuel surcharge paid to FAAN for every litre of fuel purchased in Nigeria, foreign airlines’ unspecified over-flying charges and terminal navigation charges.
According to IATA, Nigerian air travelers pay an average of $180 per foreign departure and arrival, which is about 264 per cent higher than any other African country. How does this sound to an investment prospector?
Data is key in planning. Access to critical information such as periodic air passenger, freight and aircraft movement figures is usually a challenge. On at least, a quarterly basis, such information should be on FAAN website.
Security guarantee for investment is required in all Public-Private-Partnership agreements. The barriers of multiple charges and existing lingering conflicts should also be resolved.
Minister Festus Keyamo must be commended for his efforts so far to rebuild lost investor confidence, including the signing of the Cape Town Convention Policy Direction and the Irrevocable De-registration and Export Request Authorization (IDERA), to enable government support a lessor taking his aircraft out of the country when there is infringement in the conditions of leasing the aircraft to a Nigerian carrier.
However, there is still a lot of work to be done to attract private partners and investors in the country’s aviation sector. The truth is that the reality on ground is so loud and has capacity to deafen a potential investor’s ears to what is being presented as investment marketing efforts. All impediments to investment must be removed. AM
