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How legislation can aid forex accessibility, low interest rates for Nigerian airlines

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Nigerian airlines require legislation to aid them in accessing low interest rates, foreign exchange amid currency fluctuations and lower Insurance premium.

Nigerian airlines pay 26 percent  interest rates on loans compared to  other airlines which pay as low as 3 percent while paying as much as $2m for insurance premium.

These were as some initial summations of the Chairman of Air Peace Barrister Allen Onyema who called for legal frameworks to enable airlines operate

He spoke at a webinar: ‘Repositioning the Aviation Sector in Nigeria for Revenue Generation and Growth: Role of Legislation’ organised by Olisa Agbakoba Legal (OAL).

Onyema said of the over 150 airlines that have come and gone in Nigeria that 5% can be attributed to ownership structure. He however said 95 percent of these failures are solely Government policies and extraneous matters which airlines have no control over.

He said, “Aviation is capital intensive. The legacy airlines access loans at very low, cheap interest rates at 2-3 percent. The Nigerian airline borrows at 26 percent.

“How do you expect these airlines to succeed or compete? Legislation should come in here.”

He called on the government to invest in the industry through legislation, mandating banks under the Central Bank of Nigeria to dedicate certain amounts to be accessed at single digit interest rates.

Speaking on insurance, the  Air Peace Chairman said it was skewed against Nigeria as what it pays as premium for an aircraft some pay as premium for six.

He said stigmatisation was used to unofficially snub the country.

Onyema said,” Vice President of IATA recently said what Nigeria pays for one aircraft is what Kuwait pays for six aircraft. We pay as much as $2m for premium while legacy airlines pay $100,000.

On forex, Onyema further lamented the absence or difficulties in accessing this stating that the industry in Nigeria is dollarised with 98 percent operation cost in hard currency.

“We keep hearing that foreign airlines have trapped funds in Nigeria. No one says how some of the airlines in Nigeria have funds trapped in the CBN because of forex.

“We need legislation here to make it possible to have a window where they can secure forex for operations.”

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Aviation

Keyamo joins Shettima in flag-off of Kebbi 2024 Hajj operations

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Vice President Kashim Shettima, Governor Nasir Idris of Kebbi State, and Sultan Muhammad Sa’ad Abubakar, alongside Minister of Aviation Festus Keyamo, convened at the Sir Ahmadu Bello International Airport in Kebbi State.

They were accompanied by Olubunmi Kuku, Managing Director of FAAN, and Alhaji Umar Faruk, Managing Director of NAMA. Together, they symbolised the start of the 2024 Hajj Operations.

SA Media and Communications, Mr. Tunde Moshood, emphasised that Keyamo’s presence at the event underscored the collaborative spirit among government agencies and stakeholders in ensuring the successful airlifting of pilgrims from Kebbi State. This departure marked the beginning of a profound spiritual journey for many.

Additionally, Keyamo personally witnessed the lifting of Abuja/Nasarawa pilgrims at the Nnamdi Azikiwe International Airport, highlighting the government’s unwavering dedication to facilitating a seamless pilgrimage experience for all participants.

Expressing gratitude to all stakeholders involved, Keyamo reaffirmed the government’s steadfast commitment to providing the necessary support and infrastructure for a triumphant hajj operation.

This demonstration of unity and dedication was pivotal in the flag-off of the Kebbi State 2024 Hajj Operations, marking a significant milestone in Nigeria’s aviation history.

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Aviation

Aviation sector to benefit from RIDF

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Aviation is set to be part of key economic drivers that will benefit from President Bola Tinubu’s proposed Renewed Hope Infrastructure Development Fund (RIDF).

In a statement by Ajuri Ngelale, the fund targets strategic sectors like agriculture, transportation, ports,  energy, healthcare, and education along with aviation.

The initiative plans to inject funds into vital national projects to foster growth, bolster local value addition, generate jobs, and spur innovation.

Efficient use of low-interest loans and financing options will secure advantageous arrangements for project financing and operation.

The focus on aviation enhancement involves modernising major airports nationwide with targeted investments and infrastructure upgrades.

The statement reads, “On aviation enhancement, the focus is on the revitalization and modernization of major airports nationwide. Through targeted investments and infrastructure upgrades, major airports will undergo comprehensive refurbishment, including improvement in terminal facilities, runway expansions, and the implementation of cutting-edge technologies to enhance safety and operational efficiency.”

For agricultural infrastructure, the focus includes developing robust networks like storage facilities and irrigation systems.

In port revitalisation, the goal is to modernise facilities and attract investments to enhance Nigeria’s regional trade hub status.

“By modernizing port facilities and implementing advanced monitoring systems, the goal is to optimize efficiency, attract investments, and bolster Nigeria’s position as a regional trade hub,” the statement read.

Key road projects like Lagos-Calabar Coastal Road aim to enhance connectivity and stimulate economic growth.

Rail projects like Lagos-Kano and Eastern lines will modernise transportation networks for speed and reliability.

President Tinubu’s approval of the RHIDF absorbs the PIDF, expediting project delivery for Nigerians’ benefit.

Projects funded under the RHIDF will have a national spread, reflecting the commitment to equitable development.

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ICAO Aviation security audit team debriefs Nigeria, indicates strong outing

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The Team Lead of ICAO Security Audit Programme, Callum Vine, announced Nigeria’s strong performance during a debrief after its Audit.

Nigeria recently concluded the International Civil Aviation Organization (ICAO) Security Audit Programme the continuous Monitoring Approach (USAP-CMA) according to a statement emanating from Director, Public Affairs and Consumer Protection, FAAN, Obiageli Orah.

The USAP-CMA aims to improve aviation security compliance by analysing Member States’ performance and implementation of security standards. It focuses on Annex 17: Security Standards and Annex 9: facilitation compliance, along with associated procedures and security practices.

The event held at NCAA Headquarters saw Vine praise Nigeria’s robust policies and agencies, acknowledging their speed in addressing identified deficiencies without complaints.

He mentioned that the full audit report would be available within 60 days, followed by a 30-day period for comments.

FAAN’s Managing Director, Mrs. Olubunmi Kuku, affirmed using the audit results as a roadmap for continuous improvement.

She urged stakeholders to collaborate closely, share best practices, and uphold the highest security standards in the industry.

The debrief was attended by Dr. Emmanuel Meribole, representing the Minister, and Captain Chris Najomo, Acting Director General of NCAA.

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