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.
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.
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.
Port industry worse under Buhari administration –Amiwero
Lucky Amiwero is the President of the Council of Managing Directors of Nigerian Licensed Customs Agents and Managing Director of Eyis Resources Limited. In this interview with PAUL OGBUOKIRI, he says that the hype on ease of doing business in Nigeria is a ruse in the port sector. He posits that Nigeria’s ports, though large, are far from being modern and are the most expensive in the world with no access roads and riddled with decaying infrastructure
What is your assessment of the port sector of Nigerian ‘s transport system under the Muhammadu Buhari government?
Well, this is the worse we’ve ever had in the port industry. Our access roads are bad, our procedures are archaic and most of the agencies of government are not performing their core functions like the Nigerian Maritime Administration and Safety Agency (NIMASA) and Nigerian Ports Authority (NPA).
Nigerian Shippers Council (NSC) appears a bit better because of the court cases but in almost every other area of our port operation, it’s like we have gone backwards by more than 500 per cent from our former position.
NPA for instance is not established for revenue collection as its core functions. There are three components of its core responsibility: One is the port operation that was taken over by Terminal Operators. Another of its core function is commercial regulation, which is now being handled by the Nigerian Shippers Council. The last is marine operation, which is farming out to different private operators.
Our ports have been left unregulated and becoming one of the most expensive in the world that you pay as much as N20,000 per day for a container that is left lying in the port because you cannot access the facility on time with your truck due to bad roads.
Do an analysis of the cost of doing business in Nigerian ports and you will agree that it is the most expensive in the world. Trucks will spend two to three weeks to access the ports and spend about four days to exit the port after collecting your consignment. This doesn’t happen anywhere in the world.
When you exit the ports with your consignment, you begin a battle of worries over likelihood of containers falling off or accident. People are dying on the Lagos ports roads. Have you not seen or heard of containers falling off on people?
Aside the accidents, the stress level of the port user has increased under this regime and this is terrible.
Fixing the ports access roads is part of NPA’s core functions under section 32 of its enabling law. NPA should take all the blames for not fixing the roads. It is their primary function to make them accessible.
NPA and the minister should take the blame. We have five ports clustered around here and they account for about 80 per cent of the cargoes that come into Nigeria. The stakes are high for us as a country if we develop our transport infrastructure for ease of vehicular movements to and from the ports.
Over 70 per cent of our revenue from the maritime sector is derived from Lagos, but we are not giving it commensurate attention. We are not predictable, we are not consistent and we are not transparent. These are the tools for trade facilitation and if they are not there, nobody can come into your country to invest.
There is this Presidential Council on Ease of Doing Business. Has it impacted on the maritime industry?
That council knows nothing about the ports. Most of them in that council have not seen a port in their lives. You don’t just go and bring people from your church and put them in a council that should oversee sensitive economic issues.
You need experts who have been in the port system. The woman that is the head of Ease of Doing Business has never come to the port before. She knows nothing about the operations here. She doesn’t understand the system and procedures. On ease of doing business on trading across borders, Nigeria is the worst.
Trading across borders is an important component of what we are talking about.
The Minister of Transport just goes about talking about rail; he has not made any impact here. The man knows nothing about this sector and is unwilling to learn. Most of the international conventions Nigeria is a signatory to are domiciled in the Ministry of Transport.
Amaechi knows nothing about the FAAL Convention that was used in facilitating trade in our ports between 2006 and 2008 and in 1999 when we have most of the laws that was used to reorganise the ports and make several maritime related laws.
Our port looks disorganised; SON, NAFDAC and other agencies of government are all operating unregulated. No coordinating agency, no lead agency. In fact nothing is working.
Look at Benin Republic, they asked Antwerp Ports to handle their port for them that mean most of Nigeria bound cargo will be going there. We will now be moving our smaller ships to their port to pick our cargoes to our archaic ports.
Benin Republic doesn’t have cargo. They rely on our cargo. For them to ask an advance port operator to manage their ports, they will give Nigeria very serious competition using our own cargoes.
Too many agencies want to play regulatory roles in our port. In Ghana the government awarded a contract of $4.5 billion for the expansion of Tema Port. Our transit trade has been taken over by Ghana.
Cargoes that should move from here to Niger, Chad and other countries are now moving from Ghana even though Ghana is longer, it is being patronised because their processes are better and easier.
Ghana has a more efficient system. The have an electronic tracking system tracking containers on transit, you don’t need Federal Operations to escort containers with guns. This is a small country that developed their system and we have so much to learn from them.
They are taking over our cargo and developing their system deploying technology to surpass Nigeria. Smaller countries are developing their ports to take Nigerian cargoes.
What is the implication of losing our cargoes to the ports of these neighbouring countries?
Soon bigger vessels with 20,000 TEUs capacity won’t be coming to Nigeria, they will be taking Nigerian cargoes to those ports. Within the West and Central African regions we need at least two transshipment centers. Some ports in the region are acting as centers already. Coted’ Ivoire, Ghana, Benin Republic and Togo are already operating as transshipment centers.
There is going to be a siphoning of most of our cargoes through their operations. The employment advantage will be in their favour. Where a ship berths, some jobs are created. The entire freight component, benefits of shipping companies, customs agents, terminals and others goes to the country where the ship berths
Most of our policy makers are ignorant about these things and the country is paying dearly for it. As a country, we seem not to have learnt anything from our mistakes. We keep going round the same circle of complaints because everyone in government or position is concerned about self enrichment.
Benin, Togo, Ghana and Coted’Ivoire have higher draft. This is not all about politics or getting favourable stories out in the media, it’s more about what your country put in place for economic growth and business development. Most of the ships coming here are smaller ships that have berthed in other countries and gotten the cargo transshipped. We have lost the economic advantage of having the mother ship calling in our port first hand.
For Ghana to have invested $4.5 billion in port development with careful project implementation agenda, they mean business. Nigeria has never done that. We either deploy funds that are not used well or we devise slogans to create impression that things are working.
Nigeria is not investing in the right directions. Our port concession has remained faulty from the foundation. No one has been able to look into what infrastructure the Concessionaires have built or real value they have added to what they met on the ground.
Ghana has dropped terminal handling and terminal delivery charges, our transport minister here is doing nothing. We have the market, we have the ports, we consume higher cargoes but we don’t have the infrastructure in place to accommodate large ships.
We have lost over two million jobs through a failing port system; Chad, Mali and Burkina faso are no more looking up to Nigeria for their cargoes because they are getting the service more efficiently from somewhere else.
We are in a very fierce economic battle with our neighbours in terms of ports development and maritime activities.
What are your views about emerging ports being planned by some state governments? Edo is talking about Gelegele Port, Akaw Ibom is talking about Ibaka Deep Seaport while Cross Rivers talks about Bakassi Deep Seaport and many more?
All these ports cannot work. I call them ‘political ports.’ Some people just want to pour money into them, abandon them and go away. Nigeria doesn’t need multiple transshipment centers now.
One of the core components of transshipment port is destination of cargoes. Do you have enough cargoes in Ondo, Edo Bayelsa, Akwa Ibom and Cross Rivers that all of them are talking about having deep seaports?
Ships you see coming to Lagos is because Lagos has potentials to consume cargoes, it has factories that need raw materials and many more including it’s population. Ships will not just move to any place just because you are constructing an emerging port there. Those things may just end up as abandoned projects.We have largely idle ports in Sapele, Onitsha, Burutu, Calabar, Warri. Ask yourself, how many ships are going there? Now some governors want to spend scarce resources to build more ports. Weeds and rats have overtaken some of these ports and you want to sink money into building new ones. It doesn’t make sense.
Lagos has what it takes to attract cargoes. Most of these states owing workers should not go into constructing political ports because they will amount to waste.
For instance, you cannot divert Lagos cargo to Calabar because you may not have the infrastructure to move it from Calabar to other parts of the country. These governors should look for something better to do with their funds and time. They should not go into expensive port construction projects that may end up being abandoned midway or being idle after completion.
Kaduna Dry Port, do you see the milestone as a major step forward in port infrastructural development?
The project remains an uncompleted one. They should finish it. As things stand, there is no law establishing the Kaduna Dry Port. So you need the National Assembly to do that with proper legal framework.
If the president or minister designates that facility as a Dry Port, what are they relying on to do so, is it NPA Act or Shippers Council law?
Our port related laws talks about navigation. It is centered on the marine sector. No provision has been made for Dry Ports in our laws. Part of our problem is that we don’t follow due process. That Kaduna facility can only be operated as a Customs Port or Bonded Terminal.
Stakeholders: Auto policy, not executive order will boost industry
President Muhammadu Buhari penultimate week signed an Executive Order aimed at boosting domestic production of goods and creating jobs in science, technology and engineering in the country, but PAUL OGBUOKIRI reports that auto manufacturers will not be able to take advantage of the ‘legislation’ unless the Federal Government summons the courage to implement its auto policy
President Buhari, has frequently spoken about ending Nigeria’s dependence on oil exports while also creating jobs by boosting local food production.
Months after he came to power in May 2015, the Central Bank of Nigeria (CBN) restricted access to foreign currency to import certain goods in a bid to stimulate local manufacturing.
To further give a stronger effect to promote production and consumption of made-in-Nigeria goods, the president recently signed the Executive Order to boost domestic production of goods and service.
“I have repeatedly emphasised my vision for a Nigeria that produces what it consumes. To attain that vision, it is vital that local companies get preference in planning, designing and executing Sci, Tech & Eng. projects,” Buhari said on his official Twitter feed two weeks ago.
But speaking on the order, auto manufacturers in Nigeria under the aegis of Nigerian Automotive Manufacturers Association (NAMA) who were encouraged to invest in the sector by the country’s auto policy of 2013, are saying their investments are suffering, even as the second hand auto market is being tacitly promoted and allowed to flourish by the Federal Government.
“The Federal Government seems to be more focused on short term goal of earning more revenue from Customs Duty paid by second hand vehicle importers, than the implications of its action on industrialisation, economic activities, employment and vision 20:20:20”.
In a statement issued recently in Lagos, NAMA, which is an association of all vehicle companies, like the older PAN Nigeria Limited and ANAMMCO, as well new comers like Innoson in Nnewi, Coscharis Ford etc; argued that the negative impact of the policy shift on the economy will outweigh the short term benefits.
The statement said: “The Federal Government seems to be more focused on short term goal of earning more revenue than the implications of its action on industrialisation, economic activities, employment and vision 20:20:20”. It, therefore, called for stricter control of the inflow of the vehicles.
According to them, the age limit of 10 to 15 years would only add to the common scenario where our highways and roads are littered with broken down motor vehicles with their attendant impact on human lives and the environment.
The association called for a full implement of the 70 per cent tariff on imported second hand vehicles
“Compared with all other developing countries with vehicle assembly plants, our import duty on fully built up vehicles is the lowest. These countries charge import duties of between 30 per cent – 100 per cent and even impose other charges”.
The Nigerian auto industry imported and sold just between 8,000 and 10,000 new vehicles in 2017, a figure that is lower than the 15,000 projected for last year and is over 80 per cent fall from the 2014 to 2015 figures.
The Managing Director, Toyota Nigeria Limited, Mr. Kunle Ade-Ojo, gave this figure at the company’s forecast for the Nigerian automobile industry in 2017 at Toyota’s quarterly briefing in Lagos.
He said that the data showed that “imports dropped by about 90 per cent between 2016 and 2017 first quarter. In terms of retail sales, we are estimating, based on the information we have, that the auto market did about 2,000 vehicles compared to about 5,000 vehicles that were sold in first quarter of 2015, bringing it to a drop of over 50 per cent when you look in terms of retail sales.”
Meanwhile, Ndy Ekere a former Dean, Faculty of Science and Engineering, and a Professor of Manufacturing at the University of Wolverhampton, United Kingdom has said successive governments in the country have recognised the strategic importance of the Nigerian auto industry and its great potential in terms of job creation, contributions to foreign exchange earnings/savings, technology acquisition and skills development. For these reasons, the auto industry was seen as a key strategic driver for industrialisation, and an important component of the Nigeria Industrial Revolution Plan (NIRP) which was launched in 2014.
According to him, the National Automotive Industry Development Plan (NAIDP) which was subsequently launched in 2014 is aimed at attracting Direct Foreign Investment (DFI), reviving the comatose plants, attracting new automotive assembly and manufacturing plants, and encouraging the transfer of modern and advanced manufacturing technologies required for the production of affordable vehicles in the country. “Another strategic objective of NAIDP is to curtail Nigeria’s dependence on imports by meeting demand with domestic production and in the longer term to make Nigeria a regional automotive hub.”
He further said that the auto industry is widely recognised as the greatest engine of economic growth in the world and has been famously called “the industry of industries” by Peter Drucker.
In spite of the challenging global economic recession, it remains a key sector of the economy of every major country in the world today, and is vast, accounting for more than one in ten jobs in industrialized countries. He said: “It is for these reasons that most developing countries look to their local automotive sector to serve as the catalyst for economic growth and for technological development by capitalising on the many linkages that the auto industry has to other sectors of their economy.” Nigeria cannot realize its economic potentials without a viable the automotive industry which drives its content locally.”
To this end, the Minister of Transportation, Rotimi Amaechi has expressed concern over the continuing neglect of the country’s automotive policy by Nigerians, saying the preference for used cars popularly known as Tokunbo is killing the economy.
Amaechi, who spoke at a two-day workshop for chief executives of mass transit organisations on the topic: “A National Agenda for Sustainable Mass Transit Operation and Development, said that the potential in the nation’s automotive policy has been largely undermined by tastes for foreign used cars, a development he said accounted for most of the road accidents across the country. He explained that the Federal Government had deliberately crafted the Nigerian automotive policy to facilitate procurement of brand new made in Nigeria cars by Nigerians, instead of depending on importation of used cars at the detriment of development of the nation’s automobile industry.
The minister said the policy was also designed to create jobs through local manufacture of cars in the country, while lamenting the amount of foreign exchange that is pumped yearly into importation of used cars, a situation he said has kept the economy down.
“As you are aware, the key objective of the Nigerian automotive policy is to make new cars more affordable for Nigerians, while at the same time discouraging importation of used cars called Tokunbo.
The Federal Government believes that the policy will create significant employment as well as improve quality of manufacturing. However, till date, no major investor has taken full advantage of the automotive policy, apart from Innoson Vehicle Manufacturing Company,” he said.
FG sets new target for completion of Tin Can Trailer Park
The Federal Government has expressed it desire to ensure that the Tin Can Trailer and Truck Park at Apapa is completed this year, saying the cost has been raised to N9.55 billion, from the initial N8.66 billion budgeted for the project.
The Minister of Power, Works and Housing, Babatunde Fashola disclosed this while briefing newsmen in Abuja. Fashola said the truck park was part of the measures by the Federal Government to address the issue gridlock on Apapa Port access roads. He said: “The Ministry of Power, Works and Housing presented only one memo – a memorandum seeking the augmentation of the price due to the need for increased scope of work especially shoreline protection of the Tin Can Trailer and Truck Park, which is almost finished.
“It is an ongoing project. We sought council’s approval to augment the price from N8.66 billion to N9.553 billion which was an augmentation of N892.177. 289million. We expect that truck pack will now be completed this year and it will be one of the many multi-prong efforts being pursued to give relief to the Apapa area, to facilitate vehicular truck and trailer movement and also maritime and import and export business and general economic activity for Apapa in particular, Lagos at large and the country as a whole. The memorandum was approved.”
He disclosed that a design on a portion of the Apapa Creek Road and Coconut bridge has been handed over to the Dangote Group.
He further explained that what his Ministry intends to do would be to go for procurement process and FEC approval so that the project would take-off.
Fashola said, “I think road development is clearly the mandate of the Ministry of Power, Works and Housing, especially the work sector by legislation. There is multi-agencies’ collaboration. The Nigerian Port Authority, the Apapa Port, Tin Can Island that are critical to the economy are affected. So, there is multi-agencies’ interaction and that is what we have been having really and truly.
“You will recall that I briefed you about a four-kilometre stretch between the bridge from the Apapa Police when you are coming from Ijora, just to the junction of Point Road right through to Wharf Road, to the entrance of the Apapa Port. That is the stretch that the Dangote Group, the Flour Mills, and the NPA agreed to do as Corporate Social Responsibility as soon as possible. That is going on. It is a problem because after the works started, we found that the gas lines that supported most of the industries there and keep them in operation were within the right of way.
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