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.
Fiscal Federalism: Lagos Demands One Percent in Revenue Allocation Formula
Lagos State Government on Monday demanded a one percent share in the revenue allocation formula, maintaining that the special status of the State and its prosperity directly or indirectly have multiplying effects on the South-West region and the entire country.
Lagos State Government also proposed that the revenue sharing formula should be 34 percent for Federal Government including one percent for FCT – Abuja, 42 percent for State Governments, 23 percent for Local Governments and one percent for Lagos State (Special Status) as against the current revenue allocation formula, which are 52.68 percent, 26.72 percent and 20.60 percent for Federal Government, 36 state governments and 774 local governments respectively.
The demands were made by Lagos State Governor, Mr. Babajide Sanwo-Olu at the opening of a two-day South-West Zonal Public hearing on the review of revenue allocation formula by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) held on Monday at Lagos Continental Hotel, Victoria Island.
Governor Sanwo-Olu in a memorandum on review of Revenue Allocation Formula he submitted to the RMAFC declared that allocating one percent for Lagos State (Special Status) and allowing the three tiers of government to share 99 percent in a new revenue sharing formula is very straightforward, self-justifying and in no way controversial.
He said the review of the current revenue allocation formula is long overdue, noting that the best way to guarantee national progress and development is by paying attention to sub-national development because the national is a summation and a reflection of the sub-national.
He also reiterated the call for Lagos State to be accorded special status in recognition of its huge financial commitments to infrastructure and provision of basic amenities for the increasing population of its residents, as well as its preeminent contribution to the national coffers.
He said the call, which has been re-echoed at different fora and at various levels and tiers of government, cannot be overemphasized, especially against the backdrop of the current economic situation of the country, the aftermath of the EndSARS protests a year ago, and the devastating effects of the COVID-19 pandemic, for which Lagos has been the national epicenter.
“Our demand is a sharing formula that is just, fair and equitable; reflecting the contribution of stakeholders to the common purse, and also one that enhances the capacity of state and local governments to deliver high-quality services and the full dividends of democracy to the greatest number of our people.
“Lagos State is no doubt the nation’s commercial capital, and population center. The level of funding required to service the State’s social and public infrastructure is so significant that it will be difficult for the State to bear the burden for much longer under the present arrangement.
“I should say that it will actually be unfair to expect the State to bear this heavy burden on its own. It is, therefore, necessary to give due consideration to all the variables that support our advocacy for a Special Status.
“The call for a special status for Lagos is not a selfish proposition; it is in the best interest of the country and all Nigerians, for Lagos which accounts for about 20 percent of the national GDP and about 10 percent of the nation’s population to continue to prosper,” the Governor said.
Justifying the need for Lagos State to be accorded special status, Governor Sanwo-Olu said Lagos is more than just another state in the Nigerian federation, noting that there is no tribe in the country that has no significant stake in Lagos State.
He said: “As the former capital of the country for 77 years (compared to the 30 years that Abuja has been the Federal Capital Territory), Nigeria’s largest metropolis still bears the heavy brunt of being home to all Nigerians; irrespective of age, class, gender, religious affiliation or tribe.
“There are several statistics that show the number of people that comes into Lagos every day, however, there are clear indications that most of these people migrate with the intention to make Lagos their new home and in pursuit of personal dreams due to the opportunities the city-state seemingly possesses, and this portends additional responsibilities on the government.
“Additionally, Lagos still harbors a huge number of federal establishments which could not be moved to Abuja. These include military cantonments and barracks, Police, Customs, Immigration, Civil Defence, Prisons, Road Safety and security/intelligence establishments.
“There are several reasons to justify the call for a special status for Lagos apart from the aforementioned factors and by extension, a review of the Revenue Allocation Sharing Formula.”
Governor Sanwo-Olu also said that it would be unfair for Lagos State to be left alone to bear the burden of the massive destruction experienced by the State during the EndSARS protests hijacked by hoodlums and the COVID-19 pandemic without assistance from the Centre.
“This month marks one year after the massive destruction experienced by the State in the violence that accompanied the hijacking of the EndSARS protests. Public buildings were burnt down, and historical infrastructure was destroyed.
“Although we have put that experience behind us and forged ahead, the reality of this unfortunate incident remains with us; resources that should be committed to other areas of need are now being used for the restoration of these public facilities. It will be totally unfair for Lagos State to be left alone to bear these huge expenses without assistance from the Centre.
“COVID-19 pandemic is another issue that has once again, supported the justification for Lagos to be accorded the privilege of special status. As much as this affects the entire country, it is a fact that the degree of the havoc caused by this virus differs from State to State.
“Lagos was the epicenter for this virus, the same way it was for the Ebola virus some years ago. The management of these unforeseen occurrences comes with huge responsibilities and financial commitments on the part of the State Government,” he said.
Governor Sanwo-Olu commended the Chairman and members of RMAFC for taking a bold step, which he believed will “result in a fundamental alteration of the current revenue sharing formula, in favour of one that is truly fair and equitable, and that takes into full consideration the specific and more pragmatic fiscal contexts of the sub-national governments of the Federation.”
FG Places 3,964 Nigerians on Watch List, Suspends Passports
No fewer than 3,964 Nigerians are currently on the watch list of the Nigeria Immigration Service.
The names of the affected individuals, it was gathered, have been placed with security agencies at the nation’s international airports where they will be arrested on sight.
According to the 2020 NIS annual report suspect index, 308 persons were placed on the watch list in 2019, 166 in 2020, while 51 persons were stop-listed in two years.
No fewer than 3, 438 passports are also being watch, while 23 are on the exemption list.
The report states, “Suspect index reviews and maintains the list of persons whose entry into Nigeria is prohibited or on whom special instructions are in place with respect to entry and departure from Nigeria. The travel documents are the instruments used to achieve this objective through synergy with other law enforcement agencies and court of competent jurisdiction.”
In a related development, the NIS has revoked 149, 875 stolen or lost passports and uploaded them to Interpol’s Stolen and Lost Travel Documents database via the Web Services for Data Management platform.
Meanwhile, there are indications that the FG may not meet its 2021 revenue projection from NIS services.
Findings show that there might be revenue shortfall from visa; e-PASS, ECOWAS Residence Card, the Combined Expatriate Residence Permit and Aliens Card and other documents issued by the NIS due to the reduced number of foreign visitors and expatriates in the country following COVID-19 travel restrictions.
Immigration sources said the number of Italians, Britons, South Africans, Chinese, Indians, and other Asians, who constitute a large percentage of expatriates in the country, had reduced on account of travel restrictions imposed by their respective countries.
The erstwhile Comptroller-General of Immigration, Muhammad Babandede had said the service recorded a 40 per cent revenue shortfall in 2020 due to the COVID-19 pandemic.
Figures from the NIS showed that in 2018, the immigration service generated N20.3bn from CERPAC; N40.7bn in 2019, and N16.7bn in 2020.
Envoy Considers Establishment Of Chinese Banks In Nigeria To Boost Economy
Mr Cui Jianchun, the Chinese Ambassador to Nigeria, says he is in talks with Chinese owned Banks to establish operations in Nigeria.
This, the envoy said, is to boost Nigeria’s economy and expand trade relations between the two nations.
Cui made this known on Tuesday in Abuja while addressing Journalists during the commemoration of the 2021 Chinese Moon Festival and China-Nigeria Cultural week.
According to Cui, the establishment of Chinese Banks in Nigeria will also be one of the key areas of discussion during the China-Nigeria Binational Committee meeting, which he is also pushing for the establishment.
He said that an efficient financial institution was a key driver to achieving a strong economy, one Nigeria can learn from China’s experience.
“Before my departure from Beijing to Abuja, I talked to several banks in China. When you list the World’s 10 big banks, six are in China.
“The Banking sector is very important, because, without money, we cannot build our industries.
“What I am thinking here is best to talk to the governor of Central Bank and how we can allow the Chinese Banks to run office here and now, they are doing the feasibility studies on that.
“I am working hard that in the Bi-national meeting, I hope we can make a big decision and give a big push to let the banking industry and insurance industry because financial integration and institutions are key.
“If you go to China, you will find our banking industry is very powerful, not only for business but the change in the way of life.
“Because of the COVID-19, the Banking Industry is a little hesitant, but I told them Nigeria has a lot of human resources and as long as we work together, we can do big things.
“And that is why it is important to invest in the banking industry, to solve this problem,” Cui said.
Extolling the extant China-Nigeria trade relations, Cui noted that the volume of trade between China and Nigeria is nearly 20 billion US Dollars, with an increase from 2020’s 19.2 billion dollars.
Cui said the Chinese economy is restoring to the normal post-COVID-19 pandemic and both governments are working hard on how to expand imports and exports.
Speaking on the event, Cui said the China’s moon festival is a very important and significant one for China as it symbolises family reunion, national peace and social harmony.
The envoy said the 2021 celebration is also a special one as it coincides with the 50th Anniversary of China-Nigeria’s bilateral relations.
He said that both countries also share Oct. 1 as their National Days.
He said it is also on that note that the Chinese Embassy is honouring 50 Nigerian employees of Chinese Companies in Nigeria for their outstanding performance and contribution to strengthening diplomatic ties.
Dr Ifeoma Anyanwutaku, the Permanent Secretary, Federal Ministry of Information and Culture, also lauded the Nigeria-China relations.
She said the relations had recorded great successes over the past five decades.
“The five decades of co-operation had since witnessed several cultural activities and exchanges in the spheres of arts, music, dance, exhibition, cultural administration, training and capacity building of cultural officers.
“And recently, the development of Cultural Industries centres in Nigeria, among others.
“I must add that China, through the youth-oriented programmes such as the photos competition and similar activities in the past is surely a dependable ally.
“In redirecting the energy and mind of our youth to creative ventures, thereby furthering the Nigerian government’s policy of lifting a hundred million Nigerians out of poverty in the next 10 years”, Anyanwukatu said. (NAN)
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