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Explore Mergers, Experts Tell Airlines

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Aero Contractors Airlines
  • Explore Mergers, Experts Tell Airlines

Following the high frequency at which domestic airlines go out of business, experts in the sector have said that the option of mergers and acquisitions may be a lasting solution to the problem.

The Nigerian Civil Aviation Authority recently said that in the last 17 years, the number of registered domestic airlines operating in the country had dropped from 150 to about nine.

The NCAA said most of the operators collapsed because they were unable to meet the stringent regulatory requirements of the industry.

A former Managing Director, Federal Airports Authority of Nigeria, Mr. Richard Aisuebeogun, said a drop from 150 to nine was a colossal failure, adding that domestic airlines should begin to think of mergers as a hedge against economic crisis.

“Domestic airlines should consider mergers and acquisitions, which will enable them to spread risks, sustain their operations, provide better access to the international capital market and provide employment opportunities for the industry,” he said.

Aisuebeogun and other stakeholders, who spoke at an event organised by the Aviation Roundtable in Lagos, also opined that empowering the NCAA to enforce its economic as well safety regulations irrespective of third party agreements of airlines and other service providers, would help domestic airlines to grow.

“It is my opinion that effective financial assessment of the airline industry is dependent on close monitoring, adequacy and effectiveness of economic regulatory framework. Government subventions in the form of bailout funds should be objective and closely monitored by both the lender and industry regulator, the NCAA, in order to ensure that they are effectively and proficiently utilised by the beneficiary airlines,” he said.

According to him, there has been so much focus on flight operation standards and safety issues while little or no attention is paid to economic regulations, which is why airlines are sometimes mismanaged.

A former Director-General of the NCAA, Dr. Harold Demuren, said that for the NCAA to effectively carry out its duties, it must be free from political interference.

He stressed that people that should be in position of authority at the NCAA must be qualified.

Demuren said, “The government should not put people who are not qualified to be there. They should not put people who do not know what they are doing; and we must not get tired of talking to the government; we must let them know what has to be done.

“Any decision taken by the regulator has major effects on the industry; the man who is going to issue certificates for airworthiness, for instance, must be qualified, competent and experienced; he must know what he is doing. The NCAA’s autonomy is possible and stakeholders must fight for it. We must have safety regulations without political interference.”

Demuren said the failure of domestic airlines was due to poor safety and financial regulations, adding that when he was the director-general of the NCAA, the minister tried to influence him into taking certain decisions that could be detrimental to safety but that he refused to be influenced by anyone’s decision.

The Director, Legal Services, Nigerian Airspace Management Agency, Anastasia Gbem, said the NCAA had autonomy not only to make regulations but also not to summit decisions on safety and security to anyone for approval.

An aviation security expert, Capt. John Ojikutu, said the director-general and other top officials of the NCAA were expected to have certain professional qualifications with cognate experience of at least 10 years, adding that ICAO would not bother itself about political appointees but the executive head and the operatives such as inspectors and instructors.

The Managing Director of Aero Consults Limited, Mr. Ade Obadofin, stated that the regulator should place emphasis on safety analysis and evaluation based on data.

“There is a need to go beyond rule making alone; the NCAA should be talking about performance-based regulation,” he said.

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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Dry Cleaners Set to Tap into $165 Billion Global Cleaning Industry

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The Fabric Professionals and Dry Cleaners Association of Nigeria (FPDA) is gearing up to host the “Clean Show Africa 2024” conference.

This conference aims to expose over 25,000 dry cleaners to the vast opportunities present in the global cleaning and hygiene industry, valued at a staggering $165 billion.

Scheduled to take place on May 28–29, 2024, in Lagos, the event is themed “Positioning Africa’s fabric and hygiene industry for excellence.”

It comes at a crucial time when Nigeria’s dry cleaning industry is experiencing steady growth, with projections indicating a 6.4% annual increase over the next decade.

According to Enibikun Adebayo, Chairman of FPDA, Nigeria’s dry cleaning industry was valued at $8.4 million in 2019.

However, this figure is expected to rise significantly, presenting a ripe opportunity for stakeholders to tap into.

Adebayo emphasized the importance of collaboration within the industry to fully leverage its potential.

“A year ago, we launched FPDA of Nigeria. We are also using the platform to educate our members to be better professionals,” stated Adebayo, highlighting the association’s commitment to enhancing professionalism and standards within the sector.

The conference will shine a spotlight on women in the dry cleaning business, recognizing their pivotal role in driving the industry forward. Reports have shown that dry cleaning businesses are often better managed by women, and the event aims to provide them with the necessary support and resources to thrive.

Ruth Okunnuga, Managing Director of Wasche Paint Nigeria, expressed the need to revolutionize Nigeria’s dry cleaning and laundry industry, emphasizing the lack of proper structure and investment.

She stressed the importance of data collection for effective planning and growth within the sector.

Joseph Oru, Managing Director of Zenith Exhibition, highlighted the conference’s objective of engaging the Federal Government to establish training institutions for dry cleaners. Such institutions would play a crucial role in equipping professionals with the skills and knowledge needed to meet global standards.

As Nigeria’s dry cleaning industry prepares to tap into the vast opportunities offered by the global cleaning market, the Clean Show Africa 2024 conference stands as a pivotal platform for collaboration, innovation, and growth within the sector.

With a focus on excellence and professionalism, stakeholders aim to position Nigeria as a key player in the dynamic and lucrative cleaning and hygiene industry.

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Nigeria-Taiwan Commerce Falls to $500m in 2023

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The Chief of Mission to the Taiwanese Government in Nigeria, Andy Liu, has said that the trade relations between Nigeria and Taiwan drop to $500 million in 2023 from $1 billion in 2021.

Liu made these comments during the 2024 Taiwan Business Forum held in Lagos.

According to Liu, Nigeria’s status as a net exporter of agricultural products, particularly sesame seeds has historically fueled the trade between the two nations.

However, the peak in trade experienced in 2021, buoyed by increased demand for Nigerian agricultural goods, notably declined in subsequent years.

“The highest peak of trade reached about $1 billion in 2021. It was the peak of COVID-19, with Nigerians enjoying surplus trading with Taiwan. We imported more of Nigeria’s agricultural products, such as sesame, aside from oil-related products. In 2021, we had a huge demand for agricultural products for our food processing industries,” Liu stated.

However, the trade dynamics shifted in the following years, leading to a significant decline in trade volume.

Liu attributed this decline to a normalization of demand following the peak in 2021, resulting in a reduction in trade value to $500 million by 2023.

Despite this decrease, Liu remained optimistic about the future trajectory of trade relations between the two countries.

“We might see some level of increase in the near future,” Liu enthused, highlighting Nigeria’s continued significance as a destination for Taiwanese businesses.

In addition to discussing trade volume, Liu addressed the issue of counterfeiting and piracy, which has affected Taiwanese products globally.

He said the Taiwanese government is working to combat this challenge by showcasing the quality of Taiwanese products and providing after-sale services.

“We have been having our delegates visit the world to prove that we are victims of piracy, but we are going to use the platform to show that we have good and quality products to let the world know who the true providers of these quality goods are,” Liu affirmed.

The President of Globe Industries Corporation, David Hwang, echoed concerns about counterfeit products, attributing the decline in profit margins to the influx of counterfeit goods from China.

Hwang emphasized the need for partnerships to address this issue and foster mutually beneficial trade relations.

Responding to the developments, the Director-General of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), Sola Obadimu, commended the Taiwanese focus on African businesses and the quality of their products.

He pledged NACCIMA’s continued collaboration with Taiwanese companies to drive business growth for both nations.

As Nigeria and Taiwan navigate the challenges posed by fluctuating trade volumes and counterfeit goods, stakeholders remain committed to fostering resilient and mutually beneficial economic ties.

The 2024 Taiwan Business Forum served as a platform for dialogue and collaboration, laying the groundwork for future cooperation between the two nations.

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Nigeria Advances Plans for Regional Maritime Development Bank

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Nigeria is making significant strides in bolstering its maritime sector with the advancement of plans for the establishment of a Regional Maritime Development Bank (RMDB).

This initiative, spearheaded by the Federal Government, is poised to inject vitality into the region’s maritime industry and stimulate economic growth across West and Central Africa.

The Director of the Maritime Safety and Security Department in the Ministry of Marine and Blue Economy, Babatunde Bombata, revealed the latest developments during a stakeholders meeting in Lagos organized by the ministry.

He said the RMDB would play a pivotal role in fostering robust maritime infrastructure, facilitating vessel acquisition, and promoting human capacity development, among other strategic objectives.

With an envisaged capital base of $1 billion, RMDB is set to become a pivotal financial institution in the region.

Nigeria, which will host the bank’s headquarters, is slated to have the highest share of 12 percent among the member states of the Maritime Organization of West and Central Africa (MOWCA).

This underscores Nigeria’s commitment to driving maritime excellence and fostering regional cooperation.

The bank’s establishment reflects a collaborative effort between the public and private sectors, with MOWCA states holding a 51 percent shareholding and institutional investors owning the remaining 49 percent.

This hybrid model ensures a balanced governance structure that prioritizes the interests of all stakeholders while fostering transparency and accountability.

In addition to providing vital funding for port infrastructure, vessel acquisition, and human capacity development, the RMDB will serve as a catalyst for indigenous shipowners, enabling them to access financing at favorable terms.

By empowering local stakeholders, the bank aims to stimulate economic activity, create employment opportunities, and enhance the competitiveness of the region’s maritime sector on the global stage.

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