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Osinbajo to Address Challenges in Aviation Sector

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  • Osinbajo to Address Challenges in Aviation Sector

The Acting President, Prof. Yemi Osinbajo, has said the federal government will urgently address challenges facing the aviation industry in Nigeria which have hitherto hampered the growth and development of the sector.

Some of these challenges include inadequate supply and high prices of aviation fuel, difficulty in accessing forex, non-establishment of maintenance, repair and overhaul facility in the country, poor airport infrastructure and high taxation.

Osinbajo said Nigeria has failed to take advantage of its natural geographical position as the hub for Africa but promised that government would begin to tackle these problems.

The acting president gave the assurance during a meeting with a delegation of Airline Chief Executives of the Airline Operators of Nigeria (AON) in his office in Abuja at the weekend.

Osinbajo said he used the meeting as a fact finding exercise to hear firsthand from the airline operators what domestic airlines are going through within the sector.

He said he wanted to know why in spite of the huge potential as a country blessed with a natural, God-given geographic location at the centre of Africa (4.30hrs to most parts of Africa); with most of its airport at approximately sea level and being the 6th largest producer of crude oil in the world with a population of 190 million and the attendant skilled manpower, yet Nigeria is not a hub for aviation activities on the African continent.

After listening to the AON representatives, the acting president acknowledged the difficult situation the airlines face and promised to take a closer look into the various issues raised in order to find ways of addressing them, making it more friendly and promoting the ease of doing business in the airline industry as well as position Nigeria to take advantage of the geographical location as the hub in Africa

During the interaction with the acting president, the Chairman of AON, Nogie Meggison, said some of the major issues facing airlines currently include the imposition of Value Added Tax (VAT) ( as domestic airlines are the only mode of transport paying VAT – Marine, Road, Rail and even the International airlines don’t pay VAT); harmonisation of over 35 multiple charges; reviewing five percent Ticket Sales Charge (TSC) to a flat rate (in line with the world practices); poor navigational and landing aids, high cost and epileptic supply of aviation fuel, obsolete infrastructure, limiting operations to daylight operation for most airports (Nigerian airlines fly an average of only five hours as against the average of 10 hours worldwide per airplane); and lack of consultations with airlines before introduction of new charges and policies among others.

“There is an urgent need for a deliberate economic policy that will support the positive growth of aviation and survival of domestic airlines in the country. For instance, following the air crashes of 2005/06, government came up with a policy to ensure air safety. Similarly, the economic policy for the sustenance of the industry needs to be seriously looked into.

“Safety and economic policy go hand-in-hand. Where there is no financial profit for airlines safety would be compromised. A clear economic policy for the survival of domestic airlines is very critical at this time which has resulted over the years in the death of over 25 airlines in 30 years. Safety and financial economic policy must go hand-in-hand; as airline investors are in the business of aviation for the profit and can’t make profit without safety or have a safe airline without profit,” Meggison said.

He explained that this was one of the main reasons why airlines in Nigeria have short lifespan for the short life span, averaging about eight years.

Meggison stressed that Nigeria has the same four major catalysts that transformed Dubai from a desert into a hub in the Middle East today..

“Aviation is an economic driver; therefore, we believe aviation should be supported as much as possible to thrive in order to reap its many benefits that can easily make aviation a major contributor to the GDP and to create 200,000 new jobs for our ailing youths through its direct and indirect link. Hence, rather than inflict greater burden on aviation, things should be made easier,” the AON Chairman said.

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.

Economy

NNPC Supplies 1.44 Billion Litres of Petrol in January 2021

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The Nigerian National Petroleum Corporation (NNPC) supplied a total of 1.44 billion litres of Premium Motor Spirit popularly known as petrol in January 2021.

The corporation disclosed in its latest Monthly Financial and Operations Report (MFOR) for the month of January.

NNPC said the 1.44 billion litres translate to 46.30 million litres per day.

Also, a total of 223.55Billion Cubic Feet (BCF) of natural gas was produced in the month of January 2021, translating to an average daily production of 7,220.22 Million Standard Cubic Feet per Day (mmscfd).

The 223.55BCF gas production figure also represents a 4.79% increase over output in December 2020.

Also, the daily average natural gas supply to gas power plants increased by 2.38 percent to 836mmscfd, equivalent to power generation of 3,415MW.

For the period of January 2020 to January 2021, a total of 2,973.01BCF of gas was produced representing an average daily production of 7,585.78 mmscfd during the period.

Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and Nigerian Petroleum Development Company (NPDC) contributed about 65.20%, 19.97 percent and 14.83 percent respectively to the total national gas production.

Out of the total gas output in January 2021, a total of 149.24BCF of gas was commercialized consisting of 44.29BCF and 104.95BCF for the domestic and export markets respectively.

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Economy

NNPC Says Pipeline Vandalism Decrease by 37.21 Percent in January 2021

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The Nigerian National Petroleum Corporation (NNPC) said vandalisation of pipelines across the country reduced by 37.21 percent in the month of January 2021.

This was disclosed in the January 2021 edition of the NNPC Monthly Financial and Operations Report (MFOR).

The report noted that 27 pipeline points were vandalised in January 2021, down from 43 points posted in December 2020.

It also stated that the Mosimi Area accounted for 74 percent of the total vandalised points in Janauray while Kaduna Area and Port Harcourt accounted for the remaining 22 percent and 4 percent respectively.

NNPC said it will continue to engage local communities and other stakeholders to reduce and eventually eliminate the pipeline vandalism menace.

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Economy

Nigeria’s Food Inflation Hits 22.95 Percent in March 2021

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Food inflation in Africa’s largest economy Nigeria rose by 22.95 percent in March 2021, the latest report from the National Bureau of Statistics (NBS) has shown.

Food Index increased at a faster pace when compared to 21.70 percent filed in February 2021.

Increases were recorded in Bread and cereals, Potatoes, yam and other tubers, Meat, Vegetable, Fish, Oils and fats and fruits.

On a monthly basis, the food sub-index grew by 1.90 percent in March 2021. An increase of 0.01 percent points from 1.89 percent recorded in February 2021.

Analysing a more stable inflation trend, the twelve-month ended March 2021, showed the food index averaged 17.93 percent in the last twelve months, representing an increase of 0.68 percent when compared to 17.25 percent recorded in February 2021.

Insecurities amid wide foreign exchange rates and several other bottlenecks that impeded free inflow of imported goods were responsible for the surged in prices of goods and services in March, according to the report.

The Central Bank of Nigeria-led monetary policy committee had attributed the increase in prices to scarcity created by the intermittent clash between herdsmen and farmers across the nation.

However, other factors like unclear economic policies, increased in electricity tariffs, duties, subsidy removal and weak fiscal buffer to moderate the negative effect of COVID-19 on the economy continue to weigh and drag on new investment and expansion of local production despite the Federal Government aggressive call for improvement in domestic production.

Nigeria’s headline inflation rose by 18.17 percent year-on-year in the month under review.

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