The frenzy about federal government’s plan to concession airport facilities was taking a high note until economics, entrepreneurs, aviators and politicians thawed at government’s intentions, the vacuity of its plan and how unprepared it is to really actualise the ideals of Public, Private Partnership (PPP) in the transportation industry and possibly other areas of the economy.
The government wants to concession first the four major airports in the country, and later the remaining 18 airports. It is also considering giving out the railways on concession. In fact, there is an indication that the government may give out the narrow gauge rails on concession to General Electric (GE).
Government is also looking at PPP on roads. Some of the roads may be given out to investors who would build them and recover their money through tolls. This plan is in addition to the deal already signed by government and Chinese government to construct the Calabar to Lagos rail line.
Obsolete Airport Facilities
Stakeholders, business moguls, top public servants, serving and retired and political office holders were among those who attended the conference on Privatisation and Concession of Nigerian Airports, organised by Checkin Nigeria, held at Sheraton Hotel, Lagos last weekend.
Speakers at the event justified the need for public, private partnership for the development of aviation infrastructure and noted that there is urgent need to rehabilitate the nation’s airports. While they supported concession, they noted that government has not put the right things in place, which would make the concession plan to work, looking at the fundamental issues that should be done before successful concession could be carried out.
It was the organiser of the conference; Michael Chikeka that first pointed out in his opening speech that there was no definition of the concession programme government wanted to carry out, what is to be given in concession and remarked that government does not honour its agreements. From hind site, Chikeka noted that it would be pertinent for government to have legal and administrative framework that would serve as guide and make agreement of such nature binding among players involved.
Through videoconference the political economist, Professor Pat Utomi lamented the decay of the nation’s airport infrastructure and noted that Nigeria is not maximising the opportunity offered to it by its sheer size, population, the hard work of her citizens and its location, which naturally should have made it a hub.
“As a country we continue to be challenged in our quest for progress because we missed the soft issues that are key to development. Unless our institutions are strong and our values are consistent, we cannot attract investors to invest in our country,” Utomi said.
He urged Nigeria to first grow a culture of institution building in order to attract investors.
“There is tendency not to realise that people calculate the risk involved in investing in Nigeria and other countries. The problem with Nigeria is that anybody that is in authority believes in arbitrariness and this creates uncertainty in investing in the country. There is regulatory risk in investing in Nigeria,” Utomi said.
He acknowledged that the airports are in deplorable states and therefore need urgent rehabilitation and now that government does not have the funds and is disposed to concession them, the investors ought to come and partner with government. But the impediment is that government did not create enabling environment for private sector investment in government owned facilities under the PPP arrangement.
Identification of Challenge
The Chairman of Airline Operators of Nigeria (AON), Captain Nogie Meggison observed in his presentation that government, despite its seeming preparedness to concession has not defined what should be given out in concession. Past experience showed that government concessioned airport terminals, but in the current case industry experts believe that to turn things around, government must have to define whether it would give out both the landside, which is the terminal and the airside of the airport, which harbours the runways, the landing aids, the airfield lighting, the ramp and taxiways.
Meggison noted that this is critical because if government gives only the terminal in concession, the industry may not move from where it was because one of the major challenges of airlines is not that there is no terminal through which the passengers would go through before boarding their flights, but that safety critical facilities are not at the airports for airlines to maximise daily operations.
For example, many airports in Nigeria do not have runway lights and this hinders airline operation.
“What are we concessioning? Nigeria at this stage needs airports that are of high standard so that the country can take its rightful place as a hub for West and Central Africa. We can take advantage of our population, location, oil and skilled manpower to become a hub. We need to privatise, concession or arrange a build, operate and transfer (BOT) or whatever forms because Nigeria does not have the funds.
“The International Air Transport Association (IATA) says in view of economic realities Nigeria needs to concession its airports. We need to get the airports and terminals going. The Nigerian economy has taken a plunge so we need to concession,” Meggison emphasised.
He expressed the regret that safety critical equipment, which could be found at various airports of the world, including that of the very poor nations are lacking at Nigeria’s airports. He remarked that in Nigeria poor visibility hamper air operation and recalled that at 2000 meters visibility that airplanes cannot land at some airports in the country, while in other countries, planes could land at extremely very low visibility of one-meter visibility.
“The benefits of concession include increase in efficiency, people will not lose their jobs and they will also earn bigger salaries. Once the facilities are running efficiently they will be paid commensurate salaries. Concession will help Nigeria to grow GDP in aviation sector, it will boost tourism and activities will be done more transparently.
“But what mode is the concession going to take? Will the concession include navigational aids, security, runways etc.? I hope government has taken into consideration the entire airport system and did a robust work on the concession programme,” Meggison said.
Lack of Government Support
Business mogul and the Chairman, Senate Committee on Privatisation, Senator Ben Bruce, in his presentation at the conference urged government “to take more than a cursory look at the aviation sector”, noting that the current recession Nigeria has been plunged into would be worse if people cannot travel fast from one destination to another and called on government officials to patronise domestic airlines when travelling outside the country.
He stressed that one of the setbacks that discourage private sector investment in Nigeria is government’s inability to honour its agreements and promised that the Senate will carry out a legislation that would make it obligatory for government to honour its agreements.
“Recession will be worse if people don’t move fast from place to place. In Nigeria 180 million people are services by 56 planes, but few people in government are serviced by 10 aircraft in the Presidential fleet. Government should lease aircraft to the airlines from the Presidential fleet, even if on temporary basis. To save these airlines government should reduce their taxes, work on their insurance. Ghana’s aviation sector is expanding at the mercy of Nigeria. Ghana is the new aviation hub in West Africa. This is because Ghana separated the critical sector of its economy from politics.
“Government does not have the managerial ability to run airports. Nigeria recruits people that run critical institutions on primordial sentiments. Government should fast track the process of the privatisation of airports,” the Chairman, Senate Committee on Privatisation said.
Confusion over Agreements
A former Director General, the Nigeria Civil Aviation Authority (NCAA) and presently with Flight Safety Foundation, Dr. Harold Demuren said in his presentation that government should keep to agreements adding, “when you don’t keep to agreements you destroy the industry.”
Demuren wanted to know which part of the facilities government wanted to concession, noting that there is the landside and the airside of an airport and government has not made it clear what it wants to concession.
“We don’t honour agreements. There is high risk in investing in aviation, which means the value of the assets will be low. To attract investors, the government must have to resolve all litigations on agreements before you go into another one. The airside of the airport needs huge capital investment,” Demuren said.
He noted that there are a lot of things to concession at the airports so government must have to define what it wants to concession and wanted to know what will happen to the rest of the airports after the four major ones were given out in concession.
He suggested that government should partner the state governments that have airports in their states to see how the other airports could be maintained.
Demuren also spoke on debts owed by the Federal Airports Authority of Nigeria (FAAN) to contractors, noting that some organisations also owe FAAN. He suggested that the government must dialogue to resolve most of these problems.
Concerning how to deal with FAAN workers when the airports are given out in concession, the former Director-General of NCAA said government should not be afraid to negotiate with labour unions but it has to be honest and urged government not to default on agreements, adding, “you have to be honest.”
“There are other questions that have to be asked. What will be the relationship between the concessionaires and other aviation agencies? How do you handle the nation’s security? In all these there should be good corporate governance. Presently there is undue political interference and this must stop. There is no good corporate governance in FAAN. I usually say that FAAN tries to use basket to fetch water. Government must also ensure that airlines are given the support they deserve because all these revolve around the airlines. You can’t be wrong supporting your own,” Demuren said.
In x-raying these issues, it is expected that government should review the observations of these experts in the industry and then review its concession programme with a mind to institute corporate governance, which would be the bedrock for the success of the programme.
China and EU Seek Partnership: Xi Jinping Proposes Key Trade Alliance
Chinese President Xi Jinping expressed his desire for China and the European Union (EU) to become key trade partners and foster trust in supply chains, during a meeting with EU leaders in Beijing.
The talks marked the first in-person summit between the two sides in four years and addressed a range of economic concerns, including data flows and market access.
Xi emphasized China’s commitment to high-quality development and opening up, positioning the EU as a crucial partner in economic and trade cooperation.
He envisioned the EU as a trusted collaborator in industrial and supply chain cooperation, aiming for mutual benefits and win-win results.
The summit delved into longstanding issues, such as efforts by Europe to “de-risk” its supply chains and the EU’s anti-subsidies investigation into Chinese-made electric vehicles.
China criticized the investigation, urging the EU to avoid using it for “trade protectionism.”
Xi called for the elimination of interference between China and the EU, a statement likely directed at the United States, which has taken actions, including enlisting the Netherlands, to curb China’s development of high-end semiconductors.
The EU leaders, Ursula von der Leyen and Charles Michel, described their conversation with Xi as “good and candid.”
They discussed the main challenges amid increasing geopolitical frictions, emphasizing a commitment to balanced trade relations and pledging to enhance people-to-people exchanges.
During the meeting, Italy formally informed China of its exit from the Belt and Road Initiative, highlighting ongoing strains between the EU and China.
Xi discussed Belt and Road with EU leaders, expressing a willingness to connect it with the EU’s Global Gateway infrastructure plan.
However, deep issues remain, including Russia’s war in Ukraine, trade imbalances, and Chinese overcapacity exported to Europe.
Jens Eskelund, president of the European Union Chamber of Commerce in China, stressed the need to address these issues to foster a positive relationship between Beijing and Brussels.
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Nigeria Eyes BRICS Membership within Two Years as Foreign Minister Emphasizes Strategic Alignment
In a strategic move towards global economic collaboration, Nigeria is aspiring to join the BRICS group of nations within the next two years.
The Minister of Foreign Affairs, Yusuf Tuggar, affirmed that Nigeria is open to aligning itself with groups that demonstrate good intentions, well-meaning goals, and clearly defined objectives.
Tuggar stated, “Nigeria has come of age to decide for itself who her partners should be and where they should be; being multiple aligned is in our best interest.”
He emphasized the need for Nigeria to be part of influential groups like BRICS and the G-20, citing criteria such as population and economy size that position Nigeria as a natural candidate.
BRICS, comprising Brazil, Russia, India, China, and South Africa, stands as a formidable bloc of emerging market powers.
In a recent move to expand its influence, BRICS invited six additional nations, including Saudi Arabia, Iran, Egypt, Argentina, Ethiopia, and the United Arab Emirates, to join the group.
Nigeria, as Africa’s largest economy, has been absent from the BRICS alliance, prompting discussions on the potential economic and political advantages the bloc could offer the country.
Analysts have noted that BRICS membership could provide Nigeria with significant leverage on the global stage.
Vice President Kashim Shettima clarified that Nigeria did not apply for BRICS membership after the bloc’s announcement of new members in August.
Shettima emphasized the principled approach of President Bola Ahmed Tinubu, highlighting a commitment to consensus building in decisions related to international partnerships.
As Nigeria eyes BRICS membership, the move is seen as a strategic step towards enhancing its global economic and diplomatic influence.
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