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| Opeyemi Agbaje |
About $800 billion would be required to fix critical
transport infrastructure deficit in the next 37 years, a finance expert,
Opeyemi Agbaje, has said.
Agbaje, who is the Chief Executive Officer of RTC Advisory
Services Limited, said aviation alone
would require about $50 billion to address gaps in airport and air navigation
facilities.
He disclosed this in
Lagos while delivering a paper at the NigeriaTravelMart Colloquium 2017, with
the theme: “Vision 2050: how to fast track Nigeria’s aviation.”
According to him, Foreign Direct Investment (FDI) in the
global aviation industry last year, was $1.764 trillion while only $59.373 billion came to Africa within
the period.
Besides, Nigerian aviation industry only attracted $4
billion FDI, which indicated that the country did not encourage private
participation.
He said despite the potential in the country’s aviation industry, Nigeria was yet
to attract FDI, adding that for the country to attract FDI, it would need a
stable macroeconomic environment and should be forward looking in its
activities.
The Federal Government, he said, would not be able to
provide funding to address infrastructural gaps in the country’s aviation
industry until it puts measures in place to attract robust capital through
foreign investment.
He said: “The entire transport system is not keeping pace
with the Nigerian economy. Our government still relies on crude oil, but the
private investors have diversified.”
Speaking on the topic entitled: “National carrier – An
option to fast track growth, investment and resource”, an aviation expert, Ali
Magashi, said Nigerian aviation could only make significant progress if the
government reconsiders the setting up of a national carrier.
Magashi said a national carrier would be preferred to flag
carriers operated by private sector players, which have over the years failed
to deliver air travel services on international routes.
He said given the huge cost implications and attendant low
returns on investment, only government is better positioned to mobilise the
required capital to set up a national carrier with innumerable strategic
benefits for the economy.
Magashi said the leading 20 global carriers, including
United Airlines, Delta, U.S. Airlines, Lufthansa , British Airways and Air
France / KLM Airlines are still owned by their governments.
Other airlines under government ownership, he said, include
Turkish Airlines, Qantas, China Southern Airlines, China Eastern, Singapore,
Japan, Cathay Pacific, Malaysia, Emirates, Qatar , Etihad , Ethiopian , Egypt
Air and South African Airways.
He said countries such as Kenya that have opted for the flag
carrier model have not done well due largely to its ownership and codeshare
structure.
He said the
re-establishment of a national carrier for Nigeria would lead to the creation
of leasing companies, maintenance hangars and reduce capital flight.
He urged the government to eschew federal character, especially
at the executive management status, and called for open and transparent
mechanism in running such airline.
Magashi said: “I am in support of a national carrier for
Nigeria because private sector players will not invest the huge capital
investment in such enterprise with the attendant high risks and low returns .
“If as a country we want to achieve development in aviation,
the government must make the initial investment and can only stop to invest
until the airline develops with the right institutional compliance and maturity
before it can be privatised’’ . Until then, the government will continue to
support and bail out the airline.”
He continued: “For the proposed national carrier to succeed,
the government must demonstrate the political will, handle issues bordering on
vested interest and get directly involved in the process of aircraft purchase
and other related procurement processes.
“The approach should be government to government in providing sovereign guarantee for purchase
of airplanes. The governance structure should include stakeholders and sector
integration in support of aircraft maintenance and manpower training. Above
all, the government must eschew the principle of Federal character in the
recruitment of personnel and ensure that the executive management level is
determined by competence and experience.”
In his presentation entitled: A template for fast tracking
Aviation by 2050, Chief Executive
Officer, Evergreen Apple Nigeria Hangar, Dr Harold Demuren, said for the sector
to grow, the government must increase its budget on air side infrastructure at
the airports.
Besides, Demuren said the government should facilitate zero
interest capital, address poor corporate governance issues and protracted
litigation.
However, he said for
Nigeria to fully benefit from the expected growth in aviation, the government
must invest in infrastructural development
and develop human capacities.
“Government must take a serious look at how to attract zero
interest capital, investment in both the land and airside of airports and
ensure that aviation fuel is clean, available and affordable,”Demuren said.
Also speaking , Chief Executive Officer, Ropeways Nigeria
Limited, Captain Dapo Olumide, said
domestic carriers will continue to fail until issues concerning their
operational structure, ownership model and the use of operating equipment were
re-examined.
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