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Revenue Loss Looms Over Abuja Airport’s Closure

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  • Revenue Loss Looms Over Abuja Airport’s Closure

Ahead of the planned closure of the Nnamdi Azikiwe International Airport runway, Abuja for repairs in February and March, there is a looming loss of revenue by the aviation sector.

Concerned stakeholders, who faulted the alternative provisions that include diversion of traffic to Kaduna airport, said the move would bring much discomfort to air travellers and foreign airlines especially, forcing many to temporarily quit air travel to the northern part of the country.

With airlines and passengers quitting the region, revenue accruing to the regulatory agencies and ancillary services will drop, making required operations further difficult.

The Abuja runway of 4000 metres-plus has been in a bad shape in the last couple of months and was in December 2016 penciled for repair at the cost of N1billion. At least three foreign airlines, including South African Airways, have had their wide-body aircraft damaged in the process of landing on the runway.

While the repair would last for at least six weeks, the Minister of State for Aviation announced that the runway would be closed and traffic diverted to Kaduna airport, from where buses will take passengers back to Abuja in a two-hour road journey.

The Chairman, Governing Board of the Nigerian Aviation Safety Initiative (NASI), Capt. Dung Pam, said though temporary closure of the runway was for safety concerns, the effects would be too huge on the already troubled sector.

Pam said that the Kaduna airport would not be able to cope with the traffic that would be coming in, in terms of all the fixed-wing aircraft.

He said: “It is going to be a serious dislocation of the nexus of our air travel system. Every major airport in the country connects to Abuja and Lagos. So, to have that place completely shut down for six weeks will be a huge blow to travelling public. They will be the ones that will be the worst of.”

The chairman recalled that the John F. Kennedy in New York, United States, one of the busiest airports in the world, does its maintenance at night when the traffic is least and never completely shut down a runway.

Aviation Security Consultant, Group Capt. John Ojikutu, said that the choice of Kaduna for air traffic diversion would scare most of the foreign airlines away.

Ojikutu said that with the security issues in the northern parts of the country, none of the American and European airlines will fly to Kaduna.

He said: “My only worry is that they want to use Kaduna for traffic and I ask the question, why can’t they use Minna? Minna may not be as good as Kaduna, but a 737 can land in Minna.

“For them to want to use Kaduna for foreign airlines, I have my doubts that the airlines will go there. It is for security reasons. The way security is built in the north is different from how we have built it here.

“If the people that are creating problems all over the place want to draw world attention to themselves, they will go to that place and create the problem. The Americans and European airlines have their minds on that. They do not want a situation where they would be brought into the conflicts, in such a way as they will be used as scapegoats. So, they would rather go to Lagos to land,” he said.

The Minister of State, Aviation, Hadi Sirika, will on Thursday engage the industry’s stakeholders on issues arising from the proposed closure of the airport.

According to the News Agency of Nigeria (NAN), Sirika, who disclosed this in a statement issued in Abuja yesterday, said the meeting would afford him the opportunity to officially inform the sector’s players of the decision.

Meanwhile, despite the challenges facing the nation’s aviation sector, it has attained a higher level of rating which now places it among the world leaders in terms of safety.

The Nigerian Civil Aviation Authority (NCAA) yesterday said that the country climbed to Level 3 in State Safety Programme (SSP) Implementation Process, and is now on the same rating with the United States of America, United Kingdom and other countries.

The development will boost stakeholders’ confidence in the industry, thereby increasing the business of the sector and bringing more revenue to airlines and government agencies.

The Spokesman of the apex regulatory body, Sam Adurogboye, explained that the categorisation was dependent on the International Civil Aviation Organisation (ICAO) that tracks the SSP implementation process of member states via its Integrated Safety Trend Analysis and Reporting System (iSTARS).

“Member states in tandem, therefore, deploy this platform to undertake gap analysis, define their action plans and benchmark their progress. Only two member states–Australia and Sri Lanka–have achieved a full implementation of the SSP according to ICAO records. Nigeria is striving to achieve Level 4, which will be 100 per cent, by the end of 2017,” he said.

The SSP process is inaugurated in member countries in compliance with the ICAO requirements as contained in Annex 19 on Safety Management. Nigeria’s advanced level has put its SSP implementation process among those of states that have defined an action plan for all non-implemented gap questions.

Adurogboye said Nigeria had completed its gap analysis and implemented 43.6 per cent of the required SSP tasks.

“In addition, the country has developed a detailed action plan for the accomplishment of the outstanding tasks with an established and approved timeline.

“In pursuant of the above, Nigeria has commenced the implementation of the SSP processes and has achieved several milestones. These include the completion of the SSP gap analysis and the establishment of the Implementation Plan approved by the Director-General (DG) of NCAA.

“Other completed SSP tasks are the official authorisation of the D-G of NCAA as the accountable executive of the SSP and the designation of the NCAA as the placeholder organisation of the SSP in Nigeria by the Minister of State (Aviation), Hadi Sirika.”

Adurogboye said that with this achievement, the NCAA would continue to ensure that air transportation in Nigeria is seamless and secure at all times.

He, therefore, urged airline operators to adhere to all safety regulations as contained in the Nigeria Civil Aviation Regulations (Nig.CARs).

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

Fidelity Bank Launches N127.1bn Public Offer and Rights Issue on June 20

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Fidelity Bank Plc, Nigeria’s sixth-largest bank, is set to open its public offer and rights issue to investors on Thursday, June 20, 2024.

In preparation for this significant financial event, Fidelity Bank will host a “Facts Behind the Offer” presentation at the Nigerian Exchange Group (NGX) on the same day.

This presentation is expected to provide detailed insights into the bank’s strategy and the opportunities presented by the public offer and rights issue.

Under the rights issue, Fidelity Bank will offer 3.2 billion ordinary shares of 50 kobo each at N9.25 per share. These shares will be available to existing shareholders in the proportion of 1 new ordinary share for every 10 ordinary shares held as of January 5, 2024.

In addition to the rights issue, the bank will also offer 10 billion ordinary shares of 50 kobo each to the general investing public at N9.75 per share. This dual approach is part of the bank’s comprehensive strategy to raise a total of up to N127.1 billion.

The acceptance and application period for the rights issue and public offer will commence on Thursday, June 20, and close on Monday, July 29, 2024.

This timeline provides investors ample opportunity to participate in the bank’s capital expansion.

Fidelity Bank has engaged Stanbic IBTC Capital as the lead issuing house for the combined offer. The joint issuing houses include Iron Global Markets Limited, Cowry Asset Management Limited, Afrinvest Capital Limited, FSL Securities Limited, Futureview Financial Services Limited, Iroko Capital Market Advisory Limited, Kairos Capital Limited, and Planet Capital Limited.

These firms will play a crucial role in managing the offer and ensuring its success.

The bank’s initiative to raise N127.1 billion is seen as a strategic move to bolster its capital base and ensure compliance with the CBN’s revised capital requirements, which were introduced on March 28, 2024.

This capital raise is expected to enhance the bank’s capacity to support its growing customer base and expand its operations across Nigeria and beyond.

In recent years, Fidelity Bank has demonstrated robust financial performance and growth, positioning itself as a key player in Nigeria’s banking sector.

The successful completion of this public offer and rights issue will further solidify its standing and enable it to pursue new opportunities in the competitive financial landscape.

Investors and stakeholders are keenly anticipating the outcome of this capital-raising exercise, which is poised to mark a significant milestone in Fidelity Bank’s journey toward sustained growth and stability.

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Banking Sector

Fidelity Bank Plc Promotes 11% of Staff Following Record Financial Performance

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Leading financial institution, Fidelity Bank Plc has announced the promotion of 11% of its workforce, a testament to the exceptional performance and dedication of its employees.

This significant move follows the release of the bank’s 2023 full year Audited Financial Statements, which reported an impressive 131.5 percent growth in Profit Before Tax (PBT) to N124.26 billion.

The recent promotions span every level within the bank, reflecting Fidelity Bank Plc’s commitment to recognizing and rewarding excellence across its entire organization.

This strategic initiative has garnered positive reactions from staff members, who see it as a validation of their hard work and contribution to the bank’s remarkable financial achievements.

In addition to the promotions, Fidelity Bank Plc has also concluded arrangements to raise a total of N127.1 billion through a Rights Issue to existing shareholders and a Public Offer. This move is part of the bank’s broader strategy to strengthen its capital base, support future growth, and enhance shareholder value.

Fidelity Bank Plc’s impressive financial performance and the subsequent employee promotions highlight the bank’s robust operational strategy and its commitment to fostering a rewarding work environment. By investing in its people and ensuring their career growth, the bank continues to build a motivated and high-performing workforce.

Ranked as one of the best banks in Nigeria, Fidelity Bank Plc is a full-fledged customer commercial bank with over 8.5 million customers serviced across its 251 business offices in Nigeria and the United Kingdom as well as on digital banking channels.

The bank has won multiple local and international awards including the Export Finance Bank of the Year at the 2023 BusinessDay Banks and Other Financial Institutions (BAFI) Awards, the Best Payment Solution Provider Nigeria 2023 and Best SME Bank Nigeria 2022 by the Global Banking and Finance Awards; Best Bank for SMEs in Nigeria by the Euromoney Awards for Excellence 2023; and Best Domestic Private Bank in Nigeria by the Euromoney Global Private Banking Awards 2023.

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Finance

Nigeria to Receive $2.25 Billion from World Bank for Economic Growth

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The World Bank has approved a $2.25 billion funding package aimed at stabilizing the economy and assisting the most vulnerable segments of the population.

The Washington-based lender announced this approval on Thursday.

The fresh infusion of capital is designed to bolster Nigeria’s efforts to stabilize its economy, which has been plagued by years of foreign-exchange shortages and economic instability.

The funding will also focus on enhancing non-oil revenue streams and safeguarding oil revenues to ensure fiscal sustainability.

This, in turn, will help deliver quality public services and support the poor and economically at-risk communities.

Ousmane Diagana, the World Bank’s Vice President for Western and Central Africa, emphasized the importance of this financing package.

“Nigeria’s concerted efforts to implement far-reaching macro-fiscal reforms place it on a new path which can stabilize its economy and lift its people out of poverty,” Diagana said.

“This financing package reinforces the World Bank’s strong partnership with Nigeria, and our support towards reinvigorating its economy and fast-tracking poverty reduction, which can serve as a beacon for Africa.”

Since assuming office in May 2023, President Bola Tinubu has initiated a series of reforms aimed at addressing the chronic foreign-exchange shortages and stimulating economic growth.

Key measures include allowing the naira to trade more freely, significantly increasing interest rates, and phasing out a costly fuel subsidy by adjusting gasoline prices.

Also, the Central Bank has taken steps to clear a $7 billion backlog of unmet foreign-exchange obligations to industries and foreign investors.

These reforms are part of a broader strategy to attract foreign investment and diversify the economy, which has traditionally relied heavily on oil production.

Despite Nigeria’s status as Africa’s largest oil producer, low crude production levels and a lack of economic diversification have contributed to ongoing fiscal challenges and foreign-exchange shortages.

The World Bank’s funding is expected to provide much-needed support for these reform efforts, helping to stabilize the economy and improve the overall economic outlook.

The injection of $2.25 billion will not only address immediate fiscal needs but also lay the groundwork for sustainable economic growth and poverty reduction.

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