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Aircraft Acquisition: Finally, Lessors Blacklist Nigeria

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  • Aircraft Acquisition: Finally, Lessors Blacklist Nigeria

Nigerian airlines will henceforth find it extremely difficult to acquire aircraft through leasing, except by outright purchase as major aircraft leasing companies in the world have blacklisted the country.

The blacklisting was as a result of the failure of some indigenous airlines to return aircraft to lessors after they defaulted on the terms of the acquisition of the equipment.

Checks from reliable industry sources that recent efforts by some domestic carriers to lease aircraft met a dead end as many of the lessors shunned the request while others gave outrageous conditions that could not be met by the operators.

The leasing companies may have decided to blacklist Nigeria after Top Brass, a charter service airline allegedly defaulted in leasing agreement with Seagold, Canada based lessor, which leased a Bombardier Q300 aircraft to the Nigerian carrier.

Investigation shows that efforts to recover the aircraft by Seagold was made difficult by Top Brass, which went to court to frustrate the recovery; until the Nigerian Civil Aviation Authority (NCAA) waded in and using the principle of the Cape Town Convention facilitated the Canadian company to recover the aircraft.

In reaction, Top Brass raised an alarm and accused Seagold of stealing the aircraft, which was deregistered by NCAA as a Nigeria aircraft and on arrival in Canada, was registered by the country’s civil aviation authority, Transport Canada.

The blacklisting was confirmed by the CEO of Aero Contractors, Captain Ado Sanusi, who noted that because of series of default by some Nigerian carriers, the lessors have decided not to lease aircraft to indigenous operators.

“Nigeria has reached to that point where there is subtle blacklisting. When a country is blacklisted there is no official letter written to you, telling you that you have been blacklisted. It is when you now go to the market to get these assets and you are turned down or you are given ridiculous and outrageous prices to discourage you from leasing the aircraft that you will know that your country has been blacklisted,” Sanusi said.

The Aero CEO said Nigeria domesticated Cape Town Convention (which enables commercial airlines to lease aircraft and other mobile assets without hindrances), in order to ease aircraft acquisition for Nigerian carriers, but one major condition for leasing aircraft was that in case of default or disagreement between the lessor and the lessee (the airline operator), the leasing company should be assisted to recover its equipment by the country’s government and civil aviation authority.

“The important thing is why did Nigeria domesticate the Cape Town Convention? The reason is so that Nigerian airlines can have easy access to acquisition of aircraft globally and we can pay our lease rentals as at when due.

“To give assurance to the owners of these assets, is that when they feel that there is default he can take back his airplane, his engine or whatever he has leased to you out of the country without any hindrance; be it from the regulator, be it from Customs or from the legal system. After that you can now start talking about the terms of the agreement and whether it was infringed upon,” Aero CEO explained.

The Director General of NCAA, Captain Muhtar Usman, recently raised an alarm and expressed the fear that the misconduct of some of the Nigerian airlines in defaulting leasing agreements with lessors might lead to the blacklisting of Nigeria.

The Director General singlehandedly took up the case of Seagold and made sure the aircraft was returned to the company in Canada in the effort to ensure that the Cape Town Convention principles were not breached.

“The aim of having the Cape Town Convention is to help, especially African airlines to be able to get leases easily and at affordable prices. Of course, it came with certain conditions because the people who are going to lease will always need to have some kind of comfort that if there is any default they will be able to recover their mobile equipment, aircraft, engine or anything along that line,” the DG NCAA had explained.

On the alleged stealing of the aircraft by Seagold, Sanusi said, “How in this day and age can anyone steal an aircraft when if you steal a phone you can be traced? If you steal a car from Europe to Nigeria, on arrival the car is demobilised.

“How can anyone steal an aircraft and fly it across Europe to Canada? It is not possible.”

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

Egypt Leads Nigeria, South Africa in Foreign Direct Investment

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Egypt Leads Nigeria, South Africa in Foreign Direct Investment

The United Nations Trade Association has Nigeria recorded a total of $2.6 billion in Foreign Direct Investment (FDI) in 2020, below the $3.3 billion posted in the preceeding year.

South Africa, Africa’s most industrialised nation, reported $2.5 billion during the same year, slightly below Africa’s largest economy and 50 percent below the $4.6 billion attracted a year earlier.

The report also noted that Africa recorded a total of $38 billion FDI in the same year, representing a 18 percent decline from the $46 billion posted in the corresponding year of 2019.

However, Egypt led Nigeria and South Africa with $5.5 billion FDI, an increase of 38 percent from the preceeding year.

The report read in part, “FDI flows to Africa declined by 18% to an estimated $38 billion, from $46 billion in 2019. Greenfield project announcements, an indication of future FDI trends, fell 63% to $28 billion, from $77 billion in 2019. The pandemic’s negative impact on FDI was amplified by low prices of and low demand for commodities.

UNCTAD also noted that global foreign direct investment declined by 42 percent to an estimated $859 billion, down from $1.5 trillion in 2019.

The decline was concentrated in developed countries, where FDI flows fell by 69 percent to an estimated $229 billion. Flows to Europe dried up completely to -4 billion (including large negative flows in several countries). A sharp decrease was also recorded in the United States (-49%) to $134 billion.

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FG to Partly Fund Six Rail Projects Connecting All Regions

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FG to Partly Fund Six Rail Projects Connecting All Regions

The Federal Government will pay a total sum of N71 billion to partly fund six rail projects connecting all regions of the country.

In the report obtained from the Federal Ministry of Finance, Budget and National Planning, the six rail projects marked for development this year are Lagos-Kano rail line (ongoing), Calabar-Lagos (ongoing), and Ajaokuta-Itakpe-Aladja (Warri).

Others are the Port Harcourt-Maiduguri railway, the new Kano-Katsina-Jibiya-Maradi line in Niger Republic and the Abuja-Itakpe and Aladja-Warri Port and refinery/Warri new harbour.

The Buhari administration will also spend N15.1 billion on the development of safety and security of critical projects, airport certification, runway construction, terminal building, among others in the aviation sector in 2021.

Last week, Rotimi Amaechi, Minister of Transportation, said the Lagos-Kano line would be connected from the Ibadan end of the Lagos-Ibadan railway and would cost $5.3 billion.

We are waiting for the Chinese government and bank to approve the $5.3bn to construct the Ibadan-Kano. What was approved a year ago was the contract,” the minister said.

He added, “The moment I announced that the Federal Government had awarded a contract of $5.3bn to CCECC (China Civil Engineering and Construction Corporation) to construct Ibadan-Kano, people assumed the money had come in; no.

“We have not got the money, which is a year after we applied for the loan. We have almost finished the one of Lagos-Ibadan. If we don’t get the loan now, we can’t commence.”

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Economy

FG Launches E-ticketing Platform to Deepen Train Usage and Convenience

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FG Launches E-ticketing Platform to Deepen Train Usage and Convenience

In a bid to improve the usage and enhance the convenience of train transport in Nigeria, the Federal Government on Thursday announced the launching of the Electronic Ticketing platform for the Kaduna-Abuja rail services.

The N900 million E-ticketing platform was introduced by the Minister of Transportation, Chibuike R. Amaechi, and the Nigerian Railway Corporation.

Amaechi said the new platform would improve efficiency, promote accountability, reduce leakage and enhance economic growth, as well as save time.

The E-ticketing platform was a Public-Private Partnership project done in conjunction with Secure ID Solutions, who provide and would manage the system for 10 years in an effort to recoup its investment before the Nigerian Railway Corporation take charge.

Kofo Akinkugbe, the Chief Executive Officer, Secure ID Solutions, said as the new E-platform issued 25,000 tickets after a successful pilot test on Thursday.

Potential Travelers can book via three ways:

1. Mobile app
2. Website
3. POS or Cash at the station

A validator would be used to scan the ticket barcode to ascertain its authenticity before boarding.

Amaechi further announced that self-service ticket vending machines at various train stations would be introduced soon.

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