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|Nigerian Aviation Sector In Financial Turbulence by villa290: 10:35am On Oct 21, 2013|
By Emeka Gbulie
“May day, May day” seems to be the alarm sounding in the Nigerian aviation industry today and you do not have to be a genius to understand why this is so. In categorical terms, our aviation agencies and airlines are in dire financial distress!
The worry over Nigeria’s aviation sector is not restricted to Nigeria and Nigerians alone; the international community is also concerned, as financial institutions, international lenders and potential investors now view the sector with caution. And would anyone blame them?
Reports from reliable sources within the financial sector show that Nigeria’s largest carrier, Arik Air, is hugely indebted to Government-backed "bad bank" AMCON (Asset Management Company of Nigeria) to the tune of N180bn, and doesn't pay a kobo to them.
This sum is apart from the N10bn it owes to NCAA and FAAN.
Earlier this year, aviation unions had shut down the airline’s operations to draw attention to its financial state and one wonders why the ‘chronic defaulters’ have not undergone any form of audit by the regulatory agency? Or is Arik’s owner, Chief Johnson Arumemi-Ikhide, more powerful than the aviation agencies and the Government?
Aero Contractors, the oldest airline in the country, was bailed out N100bn; N40bn from CBN/BOI PAIF Intervention Funds and N60bn from AMCON. Its promoters, the super-rich Ibru family (who also own deluxe hotels and newspapers) siphoned all this money.
Why is there no National Assembly investigation on them like they did with Jimoh Ibrahim's defunct Air Nigeria? Aero now belongs to the state but the young Managing Director, Ibru, is allowed to continue to squander their finances and stays at home all week?
First Nation is former Bellview Airline which has large old debts and has not paid insurance claim but is allowed to fly because Tinubu and Stella have a stake in it?
Is there a deliberate attempt by these powerful oligarchs to shut down small airlines like IRS, Chanchangi and Dana Air in order to continue to rob Nigerians of billions of naira unabatedly? Or is the selective action of the NCAA a calculated move to kill these airlines and pave way for the ‘National Airline’ which Madam Minister has a stake in?
As is typical of thieving Nigerian politicians and political office holders, of course she will buy more N150m bullet-proof cars as well as more $30m private jets paid for by NCAA to pay for her lavish lifestyle which she is now enjoying. If she refuses to resign following the countless allegations of financial misappropriation, reckless embezzlement and gross abuse of office, should she not be relieved of her ministerial position?
Where is Overland Airways in this entire aviation crisis? What does its owner do besides sitting in Minister's office every day telling her what to do? And the NCAA? How autonomous are they? Or is the current Director General, Capt. Fola Akinkuotu, the new puppy of Madam Minister and ‘Yes man’ in NCAA?
In a country that is relatively rich from oil revenues but whose population suffers widespread poverty due to endemic governmental corruption and the severe stratification of wealth, many citizens are not surprised that the aviation industry, like most other sectors of the economy, is in shambles.
Urgent action must be taken to correct the many ills in the sector and set the industry on the path to recovery and prosperity. Without a doubt, the Nigerian aviation industry portends huge potential for the nations GDP; Proper funding, effective policy implementation and supervision are critical to fully harness this potential.
Also necessary are more standardized programs for airline staff training, modernization of local airports, increased maintenance surveys of aircraft and stronger efforts to divorce governmental oversight agencies from political interests.
Emeka Gbulie, an Investment Advisor, writes from Lagos.
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