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Good year for Nigeria’s aviation

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WOLE SHADARE x-rays the aviation sector in the outgoing year and posits that the industry performed relatively well.

 

Very eventful year
The aviation industry in the year 2017 is one that can be described as successful and eventful.
Nigeria asserted its relevance in Africa’s aviation recently and over the past couple of years. its airlines have rapidly expanded into West Africa, Europe, Middle East the United States.
As we enter into 2018, there is hope that there would be continued substantial activity, which is expected in that sector.
Despite some teething problems, it could be summarised as one of the best years for aviation in recent times.

Airlines profits, others waned
It was a year profitability dropped so sharply, no thanks to recession that ravaged Nigeria’s economy. Thankfully, Nigeria’s exit out of recession brought a glimmer of hope despite the fact that the economy is still very fragile.
The year brought excruciating pain to carriers, aviation agency and other support service providers, who depend solely on foreign exchange. There are three key factors threatening Nigeria’s airline industry.

Arik, Aero take-over crises
The take-over of Arik early in the year, precisely last February shook the entire sector. The signs that the carriers were haemorrhaging were visible. Arik’s case was more pathetic because it did not fulfil its potential as it left many disappointed. The carriers, particularly Arik were enmeshed in serious financial mess – leading the Asset Management Corporations of Nigeria (AMCON) to take-over the airline over alleged N500 billion debts.
The take-over exposed some management lapses in the private sector. Some analysts say subsequent revelations of misapplication of resources by Arik and Aero suggest supervisory laxity, which has led to the failure of the private sector, hitherto regarded as relatively reliable.
A source that pleaded anonymity, explained that both Arik and Aero were established by autocratic hands on founders who in the case of Arik Air, made horrible mistakes early on in the history of the airline and in the case of Aero – a series of missteps along the way.

Abuja airport runway ‘magic’
The year also witnessed the completion of the Abuja airport runway rehabilitation. The plan to shut the airport for repairs shocked everyone and was initially met with resistance. But the government’s decision to go ahead with it and to finish it within six months was remarkable.
The Abuja Airport became operational in 1982. The runway had exceeded its life span by over 14 years with its closure many said was inevitable because of the damage the potholed runway had caused to foreign airlines in particular.
The government was applauded for the feat of carrying out a major rehabilitation and reconstruction of the facility in just six months.

Olateru brings life to AIB
Since his appointment by the Federal Government on January 13, 2013, Commissioner, Accident Investigation Bureau (AIB) Akin Olateru, moved speedily to reposition the agency to one that is vibrant and result oriented by first resuscitating its almost moribund accident laboratory, training and retraining of workers, signing of a pact with University of Ilorin for students to use it for research purposes and the release of over seven accident reports, including that of Dana that occurred in 2012 in an unprecedented manner. These also included recommendations that are far reaching. Over 10 reports had since been released by Olateru since he assumed office.

Medview goes to the market
One other positive is the informed decision of Nigeria’s flag carrier airline, Medview to be quoted on the country’s Stock Market. Only ADC took such decision.
With the listing, the company is showing its commitment to a culture of strong corporate governance, excellence, professionalism and efficient services to its passengers, as well as providing increased returns to its shareholders.
The airline on December 7, 2017 began flight operations to Dubai, making it the Nigerian carrier ever to venture on Dubai route after Virgin Nigeria and Arik’s debacle on the lucrative route.
The country has always played in the biggest aviation league by consistently retaining the United States Aviation Category One Aviation status, which indicates that the country’s safety oversight is at par with other globally recognized countries.

Ease of doing business pays off
In June 2017, the Federal Government facilitated the ease of doing business in the country via the airports. Not a few believed that solving Nigeria’s aviation problem is not rocket science and one that is very achievable. Like magic, sanity returned to Nigeria’s premier airport, the Murtala Muhammed Airport, Lagos, courtesy Acting President Yemi Osinbajo’s executive orders, sought ways to ease difficulty in doing business in the country. First was resolving the chaotic and not too straight forward issuance of visa on arrival for foreigners coming to the country.
In other climes, it takes less than 20 minutes to check-in and go through screening. In Nigeria, it could take as long as three hours or more. The manual screening by the uniformed is not only archaic but also no longer in tandem with global practice.

NAMA upgrades facilities
The Nigerian Airspace Management Agency (NAMA) took advantage of the Kaduna airport repair to upgrade its Instrument Landing System (ILS) to guarantee safer airspace.

Concession controversies
One issue that dominated and has continued to dominate discourse in the aviation industry is the planned concession of many of the international airports.
This has generated a lot of furore; unions and workers have rejected the policy, but stakeholders said it was the best way to guarantee efficiency and to provide world-class facilities.
Stakeholders implore the government to ensure transparency; accountability and fairness to all stakeholders and participants, which are the hallmark in a concessioning process and will advertently tally with the “Ease of Doing Business” model.
The government had last September approved the concession of the two main airports in Nigeria, located at Lagos and Abuja. Osinbajo announced the development at the presidential quarterly business forum in Abuja.

The Federal Government had made concessioning of the two major airports and the floating of a national airline as some of its plans for the aviation sector.

History-making airports certification
Last September, the Nigerian Civil Aviation Authority (NCAA) certified Murtala Muhammed International Airport in Lagos, showing that it had met all the processes of the International Civil Organisation (ICAO).
These aerodromes before now, particularly those in Lagos and Abuja had remained uncertified since over 60 years of aviation in Nigeria and 38 years since the Lagos airport was built.
This is coming 11 years after Nigeria first began the process but had consistently failed to get any of its international aerodromes certified to conform to international standards.
Presenting the certificate to the Managing Director of FAAN, Saleh Dunoma, the Director-General of NCAA, Capt. Usman Muhtar, said a lot of work went into making Nigeria’s biggest airports to scale some of the toughest hurdles in airports certification.
Muhtar disclosed that the first attempt to certify the Lagos airport started in 2006, adding that despite concerted efforts and continuation in 2008, certification could not be achieved.
Airport certification proves that you have met your states minimum requirements at the time of the regulator’s audit.
A visibly elated Managing Director of FAAN, Saleh Dunuma, said to achieve the success, careful planning and execution of these projects are the panacea for more profit for airlines just that it would help the aerodromes to maintain high safety standards.

Last Line
No doubt, 2017 proved to be a relatively very successful year for aviation in Nigeria. It is hoped that that 2018 will be a more successful year for the sector.

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JOHESU: Unresolved strike with many issues

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JOHESU

Year-in-year-out, labour and trade unions have tried to ensure their members’ rights are protected, especially on improved welfare. However, that of health workers, currently on-going, appears not to be on the popular side. REGINA OTOKPA reports

 

For decades, Nigerian workers have continued to press for better welfare packages and prompt payment of their entitlements from the government. This has led to series of strike actions by various unions fighting for workers’ rights.

The most recent is the agitation by health workers under the umbrella of Joint Health Sector Union (JOHESU). JOHESU comprises of Medical and Health Workers Union of Nigeria (MHWUN), National Association of Nigeria Nurses and Midwives (NANNM), Senior Staff Association of Universities, Teaching Hospitals, Research Institutes and Associated Institutions (SSAUTHRIAI), Nigeria Union of Allied Health Professionals (NUAHP) and Association of Medical Laboratory Scientists of Nigeria.

JOHESU’s Demands The first major bone of contention among the 15-point demands is the payment of over N20 billion adjusted Consolidated Health Salary Structure (CONHESS), which the government had already agreed to pay in 2017.

Others are immediate release of the harmonised scheme of service and circular on internship for nurses and midwives, upward adjustment of the CONHESS salary structure, immediate and full payment of arrears of salaries of CONHESS 10 skipping outstanding, payment of promotion arrears, same scale promotion/ redesignation, prioritisation of employment in the critical professional areas and enhanced entry point to accommodate all other graduates of other health care professionals.

Others are advertisement of CMD/MD’s appointment without prejudice to any particular profession, nonseparation of teaching hospitals from their teaching hospitals and the eligibility for specialist allowance to accommodate two members of JOHESU.

The demand also include board appointment to institutions, promotion of health workers at Federal Medical Centre Owerri, who were being punished for embarking on strike to same level with their counterparts, adjustment of retirement age from 60 to 65, and immediate set up of a collective bargaining agreement committee to look at headship allowance, administrative allowance, professional allowance, excess work load allowance, health and safety site allowance for JOHESU members.

Broken agreement

The aggrieved workers claimed that previous administration of President Goodluck Jonathan agreed to implement these demands in 2015, but the Minister of Health, Prof Isaac Adewole, recently insisted that such was not the case, as there was no agreement between the Federal Government and JOHESU prior to the administration of President Muhammadu Buhari.

He maintained that what JOHESU brandished as 2014 agreement were minutes of meetings held with organs of Federal Government to reach a compromise, adding that JOHESU’s demands to be at par with doctors in terms of salary was neither practicable nor acceptable.

He said: “As a responsible government, we will do everything within our power to bring the ongoing strike action to an end as quickly as possible, but what JOHESU is asking for is parity with medical doctors which is neither practicable nor acceptable to the federal government.”

Adewole had said out of the 15 demands presented by JOHESU in September 2017, the government had implemented 14 while the last demand was being attended to, noting that the implication of when the agreement was reached is that JOHESU wants the government to pay arrears from 2014, and not September 2017, which the Buhari administration agreed to.

However, this is not the case, some of the 15-point demand by JOHESU has not been implemented contrary to claims by the Minister of Health. For example, the government has not increased the retirement age of JOHESU members from 60 to 65 years, skipping of Consolidated Health Salary Scale (CONHESS 10) arrears has not been paid as well as the implementation of the scale to scale promotion, especially on CONHESS 14 to 15. Other demands yet to be implemented includes employment of health workers to address the shortage of manpower in critical professional areas.

Service withdrawal

Poised to drive home their demands, especially the non-implementation of the new salary structure for other workers just as was done for doctors since 2014, the national wing of JOHESU withdrew their services at all federal health institutions on April 18, 2018.

The Government’s failure to arrive at a compromise after several meetings with the aggrieved health workers, two weeks after, led to an expansion of the strike from federal health institutions to states and local government hospitals on May 9. Meeting to receive and analyse the report of a six-member technical committee set up about two weeks ago to unravel the modalities to implement the adjusted CONHESS, the government and leadership of JOHESU, however, rejected the report and dissolved the committee, on the grounds that the report did not meet both parties’ expectations.

The national incomes, salaries and wages commission was immediately mandated to meet with JOHESU to produce a more acceptable template for implementation and to be presented at a rescheduled meeting.

NMA’s position

Despite government’s effort to reach an agreement with the striking health workers, the Nigerian Medical Association, NMA, has been a bone in the throat. Only recently, the new leadership of the union led by the President, Dr Francis Faduyile, had threatened to down tools should the Federal Government accede to any of JOHESU’s demands that violates its collective bargaining agreement with government in January 2014.

While claiming that allowing JOHESU assess to leadership positions in health facilities would only put the life of more Nigerians at risk of preventable deaths, NMA insists that JOHESU’s demands were not only an aberration considering international best practice that will add no value to clinical/patients’ care, but certainly worsens morbidity and mortality indices in Nigeria. “It is also pertinent to once again remind the government about the concluding part of our letter no.

NMA/PRE/SG/03/0751 of 21st March 2014, which states, “In view of the above, the NMA painfully wishes to inform the Federal Government of Nigeria that any award to the non-medically qualified health professionals that violates the January and July agreements of 2014 shall result in the resumption of the suspended withdrawal of service of 2014.

Please take this as a notice sir,” NMA said. “The above reminder is predicated on the extension of the ongoing strike action embarked upon by the amorphous body called JOHESU, to States and Local government areas, the basis of which is to strengthen its callous and ill motivated agitation for pay parity between her members and doctors with the resultant erosion of relativity and further hierarchical distortion in the health sector vis-àvis her clandestine romance with some top government officials.

“We oppose vehemently, any adjustment in CONHESS salary scale with resultant pay parity between doctors and healthcare professionals allied to medicine, and hereby reaffirm that relativity is sacrosanct. “The demand for Headship of Departments/units in the hospital by members of JOHESU/AHPA will lead to unprecedented chaos in the health sector with ripple effect on the health of Nigerians.

We reaffirm our rejection of this demand.” Uncomfortable with NMA’s interference, the Minister of Labour and Employment, Sen. Chris Ngige, advised the association to be cautious in interrupting and meddling with the ongoing discussions between the health workers and the government to allow for a more peaceful and generally acceptable resolutions.

JOHESU had earlier accused Ngige and Adewole, who are both medical doctors, of bias and meting out unfair treatment to members of the union, with claims JOHESU was soliciting for equal rights with medical doctors.

JOHESU’s resolve

The national Chairman of JOHESU, Comrade Josiah Biobelemoye, had noted that the lingering strike was as a result of the unfavourable moves by the Federal Ministry of Health to frustrate all efforts of the union and the government from reaching an amicable settlement.

“The Federal Ministry of Health treat us like slaves; one of the lies they are telling Nigerians is that we are asking for equal salary with the doctors . Can you imagine that a doctor entering Civil Service enters with grade level 12 while we enter with level 8 and it takes nine years for our members to get to grade level 12,” he said.

“Since government has not shown enough commitment to tow the part of honour and meet our demands, especially, the core demanding for the upward adjustment of CONHESS salary structure as agreed in the Memorandum of Terms of Settlement signed on 30th September, 2017 with JOHESU.

“After three rounds of meetings held on Thursday, 26th April, 2nd and 7th May respectively, at the instance of the Minister of Labour and Employment to find a way forward, the Federal Ministry of Health is thwarting all efforts at reaching an amicable settlement of the issues of our demands, especially the upward adjustment of COHNESS salary structure.

“CONHESS review is the upward adjustment of the CONHESS Salary table on-line with the same principles used in adjusting the CONMESS table for medical doctors who work with use n the health team.

“Our own demand for the adjustment of CONHESS that affects over 85 per cent of the workforce nationwide has been frustrated, and part of the reason for this is that the minister of health as well as the minister of state for health are all medical doctors, while the minster of labour labour and employment, who should be neutral umpire in trade disputes is equally a medical doctor.”

Last line

If these issues are not properly attended to and addressed urgently, prospects of the ongoing strike being called off would continue to be a mirage. This has a huge consequence on the health of a vast majority, as the poor masses who are unable to attain health care services from private health facilities will continue to suffer unjustly.

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Reinsurers’ stake in short-term investment rises by N3.48bn

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Nigeria’s indigenous reinsurance firms, Continental Reinsurance Plc and Nigeria Reinsurance Corporation, have increased their stakes in short-term investment by N3.4 billion. Data released by the National Insurance Commission (NAICOM) revealed that both reinsurers had earlier committed a total of N8.17 billion into the portfolio before increasing it to N11.65 billion as part of their assets.

A searchlight on their assets revealed that out of the total investment, Continental Reinsurance put in N9.23 billion while Nigeria Reinsurance came far behind with a total of N2.43 billion. Further analysis of the data also revealed that their investment in real estate also grew from N17.94 billion to N18.54 billion.

Despite the competition for premiums with highly sophisticated and capital backed offshore reinsurers, the duo has been able to steadily grow their assets over time to remain in business. A recent report detailing global reinsurance rankings left Nigerian firms out despite having the potential to carry out and dominate business transactions in Africa and possibly beyond. They were conspicuously missing in the list as the N896.24 billion gross premium written within a period of five years was far below the ranking parameter, leaving only Africa Reinsurance Corporation among the top 50.

The ranking, which revealed that Swiss Re supplanted Munich Re as the world’s largest reinsurer, was based on the gross premium written within a period of time. In this case, Munich Re’s significant primary operations accounted for just over 30 per cent of its total GPW.

On the other hand, Swiss Re’s reinsurance/primary insurance split is more modest, with just over 15 per cent of GPW coming from insurance operations, putting it under the threshold to split out its insurance and reinsurance premiums.

Apart from Africa Reinsurance having its headquarters in Nigeria, jobs are also ceded to offshore firms due to fragile capacity among local industry players. According the Nigerian Insurers Association’s (NIA) digest, which gave a breakdown of performance within a period of five years, the total amount realised as premium by the reinsurers was N896.24 billion.

The transactions, according to the report, were specifically for general business, wherein the gross premium comprises mainly of businesses accepted from Nigeria by direct offices while local cession covers business ceded to reinsurance companies within Nigeria as well as direct companies for co-insurance jobs. According to the details, the areas covered include Motor, Fire, General Accident, Marine and Aviation, Workmen Compensation/ Employers’ Liabil-ity, Oil and gas, and Miscellaneous.

In 2011 precisely, the reinsurers accepted jobs worth N6.23 billion while it also ceded transactions valued at N44.80 billion. Following the same step in 2012, the operators accepted transactions worth N3.15 billion and ceded others amounting to N55.47 billion. Similarly, in 2013, while transactions worth N4.89 billion were accepted, the operators ceded N63.65 billion worth of deals. For the 2014 transactions, N1.98 billion worth of business was accepted as against N75.33 billion that was ceded out.

In the final year (2015) within the period, transactions worth N1.96 billion were accepted as against N75.44 billion that were ceded. Further details also revealed an increase in reinsurance ratio in 2015 (0.43) as against that of 2014 (0.42).

The reinsurance ratios for other years within the review period are 0.31 in 2011, 0.32 in 2012 and 0.37 in 2013. According to market statistics, European and other overseas reinsurers currently control about 65 per cent of the Nigerian business while African Re controls about 20 per cent.

The remaining 15 per cent is shared between Continental Re and Nigerian Re. Last year, the management of Africa Re pointed out that the dominance of foreign reinsurance firms in the country was due to total low underwriting capacity as reflected in shareholders’ funds compared to the size of total risk exposure.

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Nigeria’s agric and the challenges

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Recently, the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, linked private sector investments to the growing transformation in Nigeria’s agric sector. But these investors still have to contend with myriad of challenges. TAIWO HASSAN reports

 

On attaining the mantle of leadership as Nigeria’s president on May 29th, Muhammadu Buhari, without compromising his administration’s role, explained that he would give top priority to the agric sector. Particularly, President Buhari wooed the private sector to invest in agriculture, saying that this is the next ‘big thing’ in the country and it is being positioned to increase the country’s revenue generation.

Since President Buhari’s clarion call, the private sector have keyed in into the Federal Government’s diversification agenda, through their investments in Nigeria’s agric sector. Ogbeh has consistently reiterated that his ministry is fully committed towards the development of the agricultural sector, stressing that key developments in the sector would continually be private sector driven.

He said that the Federal Government would provide the necessary incentives to grow the sector by facilitating financing and support for Small to Medium Scale Enterprises (SME) through investment vehicles such as FAFIN.

Fixing Nigeria’s agric sector

The minister said that the burden of fixing Nigeria’s economy has fallen squarely on his ministry as the oil industry has floundered and the revenue originating from it had taken a plunge, adding that no serious government will fold its arms and watch without doing something. According to him, to fix agriculture and the Nigerian economy, what the administration need to do is to harness the good policies it met on the table and blend with those that they are currently fashioning out, in a coherent and consistent manner such that it will instill confidence in the citizens, investors, market operators, farmers, traders and everyone along the various agricultural value chains.

He said that President Muhammadu Buhari has given his support for the interventions that could move agriculture forward and contribute to repositioning the economy and diversifying it away from overreliance on oil.Ogbeh said : “We have taken up the challenge of boosting local production of food as we reduce our dependency on food imports, boost domestic food production, revive rural economy and expand export earnings.

“With the huge agricultural potential of over 84 million hectares of land, abundant water bodies, particularly the various rivers, all-year-round favourable weather conditions and a variety of agro-ecologies suitable for agriculture, Nigeria is well positioned to feed its population as well as produce for export.

“The policies of my ministry will be proactive and responsive to the stakeholders’ peculiar needs. We will be nationalistic and patriotic in our approach. “We will support genuine investors and we will ensure that food is produced in abundance while we also boost the prospects of investors in the agricultural sector.”

Private sector investments

The increasing attention of the private investors in agriculture is a testimony to the fact that there is a lot of prospect in the sector. Particularly, the private sector investment in various agricultural value chains in Nigeria has re-positioned agriculture in the country in all ramifications. Indeed, the private sector investment has also provided an opportunity for the national agriculture community to familiarize themselves with the Federal Government’s priorities and plans for the sector.

No doubt, statistics revealed that private sector investments in the country’s agric sector has surpassed N1 trillion. Hence, agric experts have advised that the government needs to give more support to the private sector in order not to lose the goodwill the country had been enjoying in agriculture.

“There is risk of reduced investment spending that can lead to loses of opportunity for job creation by 16 priority investors due to lack of satisfaction with government support,” the UNDP Deputy Country Director of Programmes, Mandisa Mashologu said. He added that nascent system of coordination and inconsistency of policies, regulations, laws and administrative practices, which were key challenges, must become a thing of the past, if Nigeria must maintain its enviable leadership position in Africa’s agricultural transformation. Some of the multi-billion naira private sector investments in Nigeria’s agric sector are geared towards guaranteeing abundant food sufficiency and security.

Cosmas Maduka, Chairman of Coscharis Group, a foremost automobile dealer in Nigeria, has invested a fortune on rice production in Anambra State to the tune of 3,000 hectares and promised to increase it to 6,000 hectares soon.

Alhaji Sani Dangote, the vice chairman of Dangote Group, has indicated the commitment of his conglomerate in agricultural mechanisation. Dangote Group was among the investors who witnessed the flag-off of the second phase of the Mechanisation intervention of the Federal Government.

The company is among others taking up Agricultural Equipment Hiring Enterprise centres in Nigeria. Sani Dangote, who is also the chairman of the Nigeria Agriculture Business Group (NABG), said: “There is an urgent need for private sector stakeholders in agriculture to work together towards growing Nigeria’s agriculture, diversifying from oil and gas dependency, encouraging agricultural industrialization, and creating an enabling environment for agribusiness to thrive.”

On rice production, Africa’s richest man, Dangote, announced earlier this year that he was making a $1 billion investment in Nigeria’s rice production, which seemed to vindicate the government’s approach.

The Dangote Group plans to produce one million tonnes of parboiled milled rice over the next five years, equivalent to 16 per cent of domestic demand. Other big players have also jumped in, including the Lagos- based conglomerate TGI, which opened a rice mill in August with a capacity of 120,000 tonnes, and Olam Nigeria, part of Singapore-based Olam International, which plans to boost its existing rice output.

Constraints

However, despite the efforts of the private sector investors to boost Nigeria’s agriculture, they are still facing challenges in their farming businesses, including access to credit, access to land, land analysis, land management and security on farms. Also included are market access, standardization and post-harvest losses. All these challenges are currently affecting their huge investments in the sector.

Last line

With the huge private sector investment in Nigeria’s agriculture, experts have called for creation of enabling environment from government in order to safeguard their investments in the sector.

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