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Stakeholders Laud FG’s Investment Plan for Nigeria Air



Nigeria Air
  • Stakeholders Laud FG’s Investment Plan for Nigeria Air

Stakeholders in the aviation industry have commended the Federal Government for the renewed interest in bringing the national carrier project to fruition.

Some of the stakeholders said the Federal Government had taken the right step by including the viability gap funding for the project in the 2019 budget.

Aviation industry consultant, Dr Al-Hameeda Fraser, said there was no reason funds should not be allocated for the realisation of the national carrier project in the 2019 budget, adding that the status of the project was that of an ongoing one which was only placed on hold due to gap funding issues.

According to her, due process stipulates a budget application and allocation for any funding requirement within the government ministries.

“The allocation of funds to ensure the implementation of the project is justifiable. The amount of N47bn is only over a $100m and that is not much in the aviation sector for government ‘s commitment and contribution towards the establishment of a national carrier. It signifies a very small percentage of the funding requirement which would be generated from investors and would provide the much needed confidence to encourage investors on the project,” she stated.

The Federal Government had last week approved N47.43bn for the Nigeria Air project in the 2019 budget, as a viability gap funding of $155m, which the Minister of State for Aviation, Senator Hadi Sirika, had explained was in line with the Outline Business Case that would enable the airline to start operations before the introduction of private equity funds.

Fraser said the most important aspect of the allocation was the fact that an OBC had been prepared for the project and the amount was based on the financial dimension and costing model which determined the total cost of funding including generating outline cash flow statements covering the project life.

She noted that the national carrier remained a laudable project and ought to receive the support of all Nigerians.

“It symbolises a gesture of our national rebranding besides justifiable reasons based on facts and figures of the huge traffic of travellers in and out of Nigeria since we are steadily becoming the economic hub of black Africa. So the project is worth whatever the government can afford to contribute towards its immediate implementation and realisation,” she added.

Aviation security expert, Group Capt. John Ojikutu (retd), said the Federal Government had said it would not have more than 10 per cent share in the airline, adding that the budgeted amount would be appropriate as the government’s contribution to the national carrier.

Ojikutu said, “N47bn is just about $130m and that can only fetch you not more than three fairly used medium-size modern aircraft. The minister said government would not have more than 10 per cent share, so I don’t think the amount is too much as the government’s share contribution.

“According to the minister, we are at the procurement stage where the participant should buy into it; foreign technical investors, Nigerian investors and later the public. Government must drive it not private. However, it is not a government airline but a national airline.”

Industry expert, Mr Tayo Ojuri, said the process was imperative to getting reputable investors with the technical and financial clout to invest in the Nigeria Air project.

He stated that there was still the need to develop a full business case and financial closure process in line with best international practice in Private Public Partnership implementation steps.

The Chairman of the defunct Air Nigeria Limited, Mr Jimoh Ibrahim, however, said the Federal Government should have a rethink on the proposed Nigeria Air project.

Ibrahim, in an interview said the only way for the national carrier project to be successful would be for the Federal Government to put systems and structures in place and not to make the airline government-owned or allow the government to lead it.

According to him, if the Federal Government must have an airline, it should consult with the few people who had operated airlines before to know the challenges they faced.

“I will not advise the Nigerian government, a developing country with a debt ratio of that magnitude, servicing 50 per cent of our gross income on debt to start an airline. I mean, that will be very difficult,” he said.

He stated that the idea of a national carrier would only become viable if the government allowed the private sector to drive the entire process.

He said, “The government cannot run an airline, it is not possible. Dubai Emirates airline remunerates about 20 per cent profit to the government. It is owned by the government but managed by the private sector. In this collaborative effort, the private sector takes 70 per cent of the profit and returns 20 per cent to the Dubai government and retains 10 as capital.

“If you do that in Nigeria, people will kill you. If President Muhammadu Buhari says I create Air Nigeria and put $5bn in it. At the end of the month, I make a profit of $1bn, I take $800m and give government $200m; what do you think will happen? They will burn down the place. They don’t want that. That’s why I said the government cannot run an airline.”

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

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Nigeria Spends N16.126 Billion Daily on Petrol Subsidy



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Nigeria’s daily consumption of Premium Motor Spirit (PMS) commonly known as petrol has risen to 80 million litres, according to the latest data from the Nigerian Petroleum Company Limited (NNPCL).

A breakdown of the data showed that 558.83 million litres of petrol were evacuated between March 4 and 10, 2023, translating to an average daily consumption of 79.83 million litres.

In February 2023, the Group Chief Executive, NNPCL, Mele Kyari had put petrol consumption at around 66 million litres of petrol and declared that the corporation was spending about N202 on every litre of PMS consumed across the country.

“Today, by law and the provisions of the Appropriation Act, there is a subsidy on the supply of petroleum products, particularly PMS imports into our country. In current data terms, three days ago, the landing cost was around N315/litre.

“Our customers are here; we are transferring to each of them at N113/litre. That means there is a difference of close to N202 for every litre of PMS we import into this country. In computation, N202 multiplied by 66.5 million litres, multiplied by 30 will give you over N400bn of subsidy every month,” the GCEO had stated.

Therefore, going by Kyari’s estimation that Nigeria spent N202 a litre as a subsidy will put Nigeria’s daily petrol subsidy cost at N16.126 billion and N483.769 billion per month.

However, the national petroleum corporation has been lamenting the huge resource spent on subsidizing fuel when the majority of people benefiting from it are a few criminals smuggling it to neighbouring countries.

NNPCL explained the danger of the continued practice on the corporation’s cash flow, adding that the funding had been ongoing without refunds from the Federal Ministry of Finance, Budget and National Planning, despite the fact that subsidy had been budgeted for in the Appropriation Act.

“But there is a budget provision for it (subsidy). Our country has decided to do this. So, we are happy to deliver this, but it is also a drain on our cash flow, and I must emphasize this.

“For as we continue to support this, you will agree with me that it will be extremely challenging for us to continue to fund this from the cash flow of the company when you do not get refunds from the Ministry of Finance,” Kyari had stated in Abuja.

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Scarcity of Fuel and Naira Set to Plunge Over 28 Million Nigerians into Crisis



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A latest report by Cadre Harmonise has revealed that over 28.4 million Nigerians in 26 states and the Federal Capital Territory are expected to face severe crises between June and August this year due to the scarcity of fuel and naira.

This projection includes 18,000 Internally Displaced Persons (IDPs).

Cadre Harmonise is a tool developed as an early warning system to prevent and manage food and nutrition crises in Nigeria.

The report was released in Abuja on Thursday, covering 26 states in Nigeria. It was also stated that about 17.7 million people, including 14,000 IDPs in 26 states and the FCT, were already in crisis or worse by May 2023.

The report pointed out that the naira redesign was one of the major drivers of the crisis in Nigeria, as the withdrawal of old naira notes from circulation created a serious bottleneck to households’ ability to access cash and food commodities.

The prolonged scarcity of Petroleum Motor Spirit commonly called petrol, and the associated hike in the pump price of the commodity across the states led to an astronomical rise in transport fares and cost of food products in Nigerian markets.

The report also highlighted the consistent rise in the price of food commodities and agricultural inputs across Nigerian markets as a major driver of food insecurity. For instance, the consumer price index, which measures inflation, grew from 15.7 percent in February 2022 to 21.9 percent in February 2023 (that is a 39.49 percent point increase) year-on-year.

Insecurity, especially insurgency in the North-East states, particularly in Borno, Adamawa, and Yobe, was also identified as a persistent challenge in the report.

The Cadre Harmonise report was produced with technical and financial support from global, regional, and national partners including the United Nations Food and Agriculture Organisation, World Food Programme, Save the Children, UNICEF, Mercy Corps, among others.

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Cash Crunch, Economic Uncertainty Bolster Inflation Rate to 21.91% in February – NBS



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Nigeria’s inflation rate continues to upward trend in February as economic uncertainty amid a chronic cash crunch crippled economic activities.

The Consumer Price Index (CPI), which measures the inflation rate, grew at 21.91% rate in the month of February, a 0.09% increase from 21.82% recorded in January, the National Bureau of Statistics (NBS) stated.

On a yearly basis, the inflation rate was 6.21% higher than the 15.70% filed in February of 2022.

According to the NBS, the headline inflation was bolstered by Bread and Cereal (21.67%), Actual and Imputed Rent (7.74%), Potatoes, Yam and Other Tubers (6.06%), Vegetable (5.44%) and Meat (4.78%).

On a monthly basis, inflation moderated by 0.16% in the month under review to 1.71% when compared to 1.87% reported in January 2023. Indicating that in February 2023 price level was 0.16% lower relative to January 2023.

The percentage change in the average CPI for the twelve months period ending February 2023 over the average of the CPI for the previous twelve months period was 19.87%, showing a 3.15% points increase compared to 16.73% recorded in February 2022.

Food Inflation

Nigeria’s food inflation rate grew at a whopping 24.35% rate on a year-on-year basis in February 2023 as a few money continues to chase limited food items due to the nation’s new bank policy that made it impossible for people to access their deposited money in the bank.

This was 7.24% points higher when compared to the 17.11% recorded in February 2022. The rise in food inflation according to NBS was caused by increases in prices of Oil and Fat, Bread and Cereals, Potatoes, Yam and Other Tubers, Fish, Fruits, Meat, Vegetable, and Food Product etc.

On a monthly basis, the food inflation rate was 1.90% in February 2023, representing a 0.18% increase from 2.08% in January 2023.

However, the average annual rate of food inflation for the twelve-month ending February 2023 over the previous twelve-month average was 22.12%, which was a 2.44% points increase from the average annual rate of change recorded in February 2022 (19.69%).

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