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Nigeria’s Aviation Sector Hits Turbulence

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Arik Airplane
  • Nigeria’s Aviation Sector Hits Turbulence

Nigeria may consider itself a regional aviation hub but years of mismanagement and now recession have blighted domestic airline operations, making delays and cancellations the norm.

Industry experts say the sector needs a fundamental overhaul, pointing to opaque management practices, rampant corruption and risks for passengers from security and dilapidated infrastructure.

Arik Air, which has a 60 percent share of domestic flights and is the country’s biggest private carrier, has found itself increasingly in the firing line of disgruntled passengers.

Earlier this month, irate passengers beat up one of its executives at Lagos international airport after the third consecutive cancellation of their flight to Johannesburg.

In December, Arik operations were grounded by a 24-hour strike by employees demanding the payment of seven months arrears in salary.

There was no response from Arik when asked to comment on the situation by AFP.

Other domestic operators are struggling. Aero Contractors, the second biggest carrier, stopped services for four months at the end of last year because of “serious financial difficulties”.

For John Ojikutu, an aviation security consultant, most Nigerian airlines run their businesses like a grocery store.

“They just want to make profit,” he told AFP.

The result is airlines in Nigeria generally have a short life span: in 35 years more than 40 operators have gone bust, including Nigeria Airways, which collapsed in 2003.

– Dollar shortage –

Ojikutu said the airlines are heavily in debt and “taking advantage” of the country.

“People are… operating without paying the fuel marketers, without paying their staff, without paying for the services they’re given (insurance, maintenance),” he said.

“If they are not making profit, the question is what do they really do with all this money?… They are selling tickets every day.

“As long as we don’t have a strong, credible, independent regulatory agency we cannot have a viable aviation industry in this country.”

In their defence, the airlines blame a lack of foreign currency that has left them unable to pay fuel suppliers or, in some cases, landing charges at airports outside Nigeria.

Nigeria is one of Africa’s main oil producers but is forced to export crude and import petroleum products because of a lack of domestic refining capacity.

The fall in the price of crude on international markets has seen the naira currency lose value against the dollar and Nigerian banks no longer have enough liquidity.

Foreign airlines such as United and Iberia have stopped flights to Nigeria because of difficulties in repatriating profits in dollars.

In September last year, members of the House of Representatives asked the government to declare a state of emergency in the aviation sector, saying 160,000 jobs were at risk.

Lawmakers also called for an investigation into the alleged misappropriation of 120 billion naira (357 million euros) of public funds in 2012 meant to modernise the sector.

– Airport closure –

Two years ago, the Nigerian state got on the board of several airlines, including Arik and Aero, through its Asset Management Corporation of Nigeria.

But according to Ojikutu, no serious audit has been carried out to evaluate the real financial situation of the companies.

“Funders and banks may have been too lenient in granting credit to Nigerian airlines for excessive expansion on the basis that somehow government (or AMCON) will step in to protect banks from failing due to non-performing loans to airlines,” added Joachim Vermooten, an expert in transport economics at the University Johannesburg.

Another major challenge is upgrading ageing infrastructure which cannot handle the millions of passengers who now travel every day through Nigerian airports.

From early March for example, the airport in Abuja will close for six weeks for major resurfacing work on the only runway serving the federal capital.

The runway, which was built in 1982 with a life span of 20 years, is now “completely gone” and “unsafe for operation”, according to the aviation minister Hadi Sirika.

“The entire structure of the runway has failed,” he has said.

Passengers for Abuja will have to land at Kaduna, some 200 kilometres to the north, and transit to the capital by bus on a road known for frequent kidnappings.

The airport closure is the talk of Abuja, underlining not just Nigeria’s reliance on air transport but the lack of a viable alternative.

AFP

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Farmforte, Others Signs MoU To Strengthen and Sustain Growth in Agricultural Sector

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Farmforte - Investors King

Farmforte Limited has signed a strategic Memorandum of Understanding with the Agricultural Fresh Produce Growers and Exporters Association of Nigeria; HYBR, a pan-African innovation firm; and ALTS, a consulting and strategy development firm.

The firm said in a statement on Sunday that the partnership would strengthen common interest cooperation and stimulate inclusive and sustainable growth within the agricultural sector, by capitalising on the synergy and comparative advantage offered by each organisation.

Speaking during the signing ceremony, Farmforte Co-Chief Executive Officer, Osazuwa Osayi, said, “Our mid to long-term strategic goals are further reaffirmed, as this partnership will facilitate the sharing of knowledge, ideas, and expertise across the agricultural sector.

“We will collectively address initiatives and approaches concerning agricultural investments, food security, and the overall robustness of the value chain.”

He said the collaboration would also unlock the full potential of the sector and place it on a renewed path for success, especially within a post-pandemic economy.

The President of AFGEAN, Tajuddeen Dantata, said, “By creating dialogue and fostering investment in the horticulture sector, this partnership will endeavor to support Farmforte in its exporting efforts by improving operational efficacy and cost-savings, while ultimately driving socio-economic growth in the country.”

The Chief Executive Officer, HYBR, Charles Ojei, said to drive inclusion, sustainability, job creation, and Nigeria’s overall economic growth, the optimisation of the agriculture value chain was critical.

“This collaboration is a fusion of the complementary capabilities of all partners to move a bigger agenda forward.”

The Managing Partner, ALTS, Akintunde Sawyerr, said, “The goal of this partnership is to support Farmforte’s vision of becoming the largest agribusiness by 2035 via scalable and world-class innovation across its enterprise.”

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OctaFX Launches Dual Life Campaign

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OctaFX- Investors King

International Forex broker, OctaFX has launched a socially conscious marketing campaign called Dual Life aimed at simplifying forex trading and helping Nigerians create wealth.

A statement by the organisation on Monday said that the marketing campaign would celebrate the superpowers of Nigerians who committed their time and efforts to two or more jobs and were successful at each one of them.

It stated that the #DualLifewithOctaFX campaign had influencers in the Nigerian lifestyle and entertainment space such as Toke Makinwa, Bovi, Denola Grey, Timini Egbuson, and others at the core of the engagements, establishing the other sides of the celebrities and influencers as entrepreneurs.

While speaking about the campaign, the Marketing Manager, EMEA, OctaFX, Ali Nwadike said, “We wanted to position forex trading as that activity young Nigerians and everyone else, can engage in, even while focusing on their careers.

“From findings, most young Nigerians today work two or more jobs to pay the bills and attain financial freedom. But, we don’t get to talk about this often or appreciate the efforts, hence the #DualLifewithOctaFX campaign.

“While some see their jobs as a burden, we want people to see it as an achievement; and promote the school of thought that says one, two, many jobs is not bad especially when you are trying to create wealth.”

Nwadike added that more Nigerians would be exposed to the beauty of keeping their regular jobs and careers while making more money from forex trading with the OctaFX Trading App.

The statement also affirmed that OctaFX had made necessary arrangements from assembling forex experts and compiling training guides in the simplest and relatable form.

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Appointments

AfDB Appoints Dr. Beth Dunford as Vice President

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African Development Bank - Investors King

The African Development Bank Group (AfDB) has announced the appointment of Dr. Beth Dunford as its Vice President, Agriculture, Human and Social Development. The appointment becomes effective from July 1, 2021.

A statement explained that Dunford, a national of the United States of America, brings extensive experience to this role. She has held senior-level leadership positions in the US government, where she managed large and complex programs, working with the private sector, civil society, and multilateral and bilateral institutions, as well as with African governments, to deliver agricultural, social and human development impact at scale.

Prior to her appointment, Dunford worked as the Assistant to the Administrator in the U.S. Agency for International Development’s (USAID’s) Bureau for Resilience and Food Security, as well as the Deputy Coordinator for Development for Feed the Future, the U.S. government’s global hunger and food security initiative.

“In this dual role, she coordinated Feed the Future across multiple U.S. government agencies, oversaw a $1 billion annual budget and leveraged millions of direct private sector investment annually. In this capacity, she also coordinated a $2.3 billion Feed the Future presidential initiative across 11 US government agencies and forged partnerships within the private sector and civil society targeted at reducing hunger and poverty.

“She also led USAID’s technical and regional expertise focused on improving agriculture-led growth, resilience, nutrition and water security, sanitation and hygiene,” the statement added.

President of the African Development Bank, Dr. Akinwumi Adesina said he was delighted to appoint Dunford as Vice President to lead the Bank’s work on Agriculture, Human and Social Development.

“Beth is a strategic and effective leader with deep knowledge and impressive track record in designing and delivering highly impactful large-scale programs that have helped in lifting 27 million people out of poverty in 36 countries,” he added.

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