L-R: Chief Executive Officer, EAN Hangar; Dr. Harold Demuren, Chief Executive Officer, NigerianTravelsMart (NTM) Simon Tumba, Chairman, Aso Savings & Loans Plc Ali Mohammed Magashi and Chief Executive Officer, RTC Advisory Services Limited Mr. Opeyemi Agbaje, at the NTM 2017 Colloquium in Lagos today.
…Aviation Needs $50 Billion To Turn Around Sector By 2050
Nigeria Attracted $4.447B FDI In 2016
For the transport industry on African continent to meet global infrastructural standard in the next 33 years (2050), a whooping sum of Eight hundred dollars ($800) is required
Just as he said that aviation industry in Nigeria would require about $50 billion, marine transport $50 billion and rail $35 billion to put the industry on the path of growth in the same period..
This was the position of Chief Executive Officer of RTC Advisory Services Limited, Mr Opeyemi Agbaje while presenting a paper titled, “Raising Capital to Finance a Vision2050 at the second edition of an annual colloquium organised by Nigeria Travels Mart (NTM) at Renaissance Hotel, Lagos today, Plan” at a Colloquium 2017.
Speaking further Agbaje stated that in 2016, the total amount of Foreign Direct Investment (FDI) that came to Africa was $59.373 in 2016, while he put the total FDI into Nigeria aviation at $4.447 billion in the same year.
He added that the answer to the development of aviation industry infrastructure challenges is global FDI.
On how to attract global FDI flows into Nigerian aviation, Agbaje stated that it requires a stable macroeconomic environment, forward-looking and proactive policy, a clear and compelling vision for the industry shared by all stakeholders including government and the private sector and regulation that seeks to foster industry transformation (not just collect revenues).
He added that when the above are put in place, the investors and financial institutions, global and domestic should do the rest.
On the establishment of National Carrier(NC) and the debate it has generated, Chairman of Aso Savings and Loans PLC, Ali Magashi said that he supported the idea of Nigeria establishing one as against setting up flag carriers.
Also presenting a paper at the colloquium, Magashi who presented a paper titled: “A national Carrier: An Option To Fastrack Growth,” described a national carrier airline is an airline floated by government as sole shareholders; to operate in the name of government and represent the government in all aviation related bilateral services agreements.
While he defined a flag carrier as a privately owned airline that by agreement is designated to represent a government and fly on behalf of the government to represent it on all bilateral designated routes, adding that the paper he presented supports the creation of a national carrier airline for Nigeria.
Magashi who gave reasons for supporting the establishment of the national carrier, said aviation is part of the macroeconomic infrastructure of government that helps to support and stimulate other sectors of the economy and that the industry is also a high capital, high risk, long gestation and low margin returns business, as such it cannot favourably compete with other less risky and higher return private sector investment opportunities.
He contended that the failure of Virgin Nigeria should remain a recent sore in our psyche and deter us from the experiments of flag carrier.
To buttress his point, Magashi cited the example of Kenya that doubled its tourism revenue by the creation of Kenya Airways and this has positively impacted on its GDP
On the role of National Carrier in the growth of tourism, said that a national airline is an embassy with wings, transporting its country’s talents, skills, commerce, culture, cuisine, human resource and goodwill around the world.
He also pointed out that Dubai and Singapore have successfully made their airlines their main brand, driving their national identity and growth strategy, and so have Ethiopian Airline and Egypt Air done here in Africa.
Magashi added that according to the World Bank, every one per cent of government fund spent efficiently on infrastructure leads to an equivalent one percent growth in GDP.
The analyst who listed challenges bedevilling the establishment of a National Carrier to include: lack of political will and sincerity of purpose, added that for this to work, the presidency will have use all the political might and sincerity of purpose to avoid political interference and that the process of aircraft purchase and other related procurement processes, he advised that government should use diplomatic connection to commit governments of aircraft manufacturing countries, to avoid extra third party added costs.
He said that the process of feasibility and business plan should be open and transparent and it should involve local stakeholders for hands-on local market input and in using Federal Character, merit should determine recruitment, not politics and/or federal character, especially at the executive management level. According to him, ”Competence, experience and success story track records should guide the process of executive recruitment – for example a minimum qualification experience of managing an airliner with a minimum of a hundred line airplanes for accountable manager and post holders.”
Also speaking, the Founder of Evergreen Apple Hangar, Lagos, Dr Harold Demuren said that despite the challenges the Nigerian aviation is facing the future for the sector is bright, adding the United States is very proud today because it is driven by vision.
He pointed out that by 2050, Africa will grow and that Nigeria will be the epic centre for aviation
To buttress his point, Demuren cited the case of Ethiopian airline which according to him some years ago got 30 per cent of ticket sales from Nigeria aviation market.
According to him,”Nigeria has a large population of youths who are very knowledgeable in Information Communication Technology (ICT), adding that this one area government should invest in.
Nigeria, he said is natural hub for aviation because it has population and a very large, market, which according to him are the attraction.
Demuren, he added that high speed train will compete with aviation in 2050, adding that in the same year most of the airlines would go low cost.
