- Transport Industry Requires More Funding to Grow – AMCON
The Managing Director, Asset Management Corporation of Nigeria, Ahmed Kuru, has said that the aviation as well as the entire transport industry in general, requires solid capital to make it deliver the goods for the Nigerian people.
According to him, the industry will require a measure of policy consistency, governmental support and good corporate governance to thrive.
He said, “From our experience, no matter the capital thrown at the sector, if corporate governance is not strengthened, it will still fail. The absence of governance or quality governance and sound financial risk management systems is at the heart of the failure that is common in the sector.
“I urge regulators to act with courage by insisting on proper governance in airlines. I recommend they look at the work being done by the Central Bank of Nigeria and Financial Reporting Council to improve the practice in airlines.”
Kuru made these known in a paper presented at the recent 6th Nigerian Transport Awards and Lecture, and made available to our correspondent.
He said AMCON did not wish to be in the airline business or any business apart from its legal mandate.
“So, AMCON will be willing to exit the firms if the owners of the companies pay the debts owed. Where this does not happen, the corporation will seek to strengthen the intervened companies and undertake a responsible exit in a manner that reinforces the sector,” he said.
He stated that towards achieving its mandate, AMCON had purchased non-performing loans of about N181bn from various banks with over 90 per cent of this in the aviation sector.
According to him, the intervention has not come without its challenges which include shareholder actions, lack of support by some trade creditors, some foreign lenders, and increased union demands.
Kuru stated that despite the challenges in the transport industry, with a population currently estimated to be 180 million and abundant human and natural resources of the country, the prospects in the industry were huge.
He also said, “Nigeria is naturally endowed geographically to be a global hub. And with the abundance of water and land mass, we are able to create a harmonious rail, sea, road and air transport sector to the benefit of our people and economy.
“In 2017, in nominal terms, the transport sector contributed N1.787tn to the Gross Domestic Product, accounting for 1.57 per cent of the total GDP; while the aviation sector contributed N105.86bn of this number, representing 5.92 per cent of the sector. According to the National Bureau of Statistics, the storage and transport sector controls 3.21 per cent of the labour force. We can build on this.”