Aviation industry contributed 0.14% to GDP in 2019 – NBS

Despite challenges in the industry, air transport’s contribution to the country’s Gross Domestic Product marginally increased from 0.12 per cent to 0.14 per cent between 2018 and 2019, MAUREEN IHUA-MAD UENYI writes

Aviation industry’s contribution to the country’s Gross Domestic Product has risen to N198.62bn.

The industry contributed N149.35bn to the GDP in 2018 but this rose by 32.9 per cent to the current figure of N198.62bn recorded as of the end of 2019.

Figures from the National Bureau of Statistics indicated that the industry’s total contribution to the GDP rose from 0.12 per cent in 2018 to 0.14 per cent in 2019.

According to the NBS figures, among transportation sub-sectors, aviation recorded the fastest growing activities in the fourth quarter of 2019.

The Minister of Aviation, Hadi Sirika, said last year that the industry should contribute more to the GDP.

Sirika said the Federal Government planned to increase the industry’s contribution to the GDP in 2020 through its transformational plan.

Despite  the challenges in the industry, stakeholders see the potential and are committed to harnessing it.

The Managing Partner, Aglow Aviation Support Services, Mr Tayo Ojuri, attributed the increased contribution to the GDP to a number of events that occurred in 2019 such as the general elections and stability in government, increased Foreign Direct Investment and stable foreign exchange.

He said, “We had  stable elections in 2019 and a seamless handover, and then from the economic perspective, there was a drive towards capital expenditure in November and December, which ensured there was much traffic between the triangular routes of Lagos-Abuja-Port Harcourt.

“The other thing that drove that growth was secondary airport traffic in Benin, Asaba, Owerri, Akure and Kaduna airports, among others. They are traffic that are not driven by government patronage but by business and family visits.”

He, however, said the industry would have recorded more growth if the security issues in the country had been addressed, adding that they had negative impact, especially for those coming to do business in Nigeria.

The Secretary General, Airline Operators Association of Nigeria, Capt. Mohammed Joji, said the industry’s growth could be attributed to improved passenger confidence due to safety records.

Joji said many domestic carriers had undergone the International Air Transport Association’s Operational Safety Audit programme, an internationally recognised evaluation system designed to assess the management and control systems of an airline.

“Passengers are now more confident in our domestic carriers which are also consolidating their presence on international and regional routes, especially the West Coast. We should see more growth in the coming years,” he said.

The Managing Consultant, The Mavis Company, Mr Emmanuel Ukpong, said a lot of changes had taken place in the industry since 2017.

He said, “I am not surprised that aviation’s contribution to the GDP has notched up a bit. But the industry has the capacity to do more.

“A lot has been happening in the sector, partly because the minister has a great vision and is pursuing that vision aggressively.”

Ukpong said renewal projects across the industry, whether partly funded by the Chinese or not, had been part of the growth plan.

He said, “At no time in recent memory have we had so much going on in the air transport sector. If you want to know the level of development in a city, count the building cranes; same across our airports.

“Construction itself had tremendous multiplier effects on aviation, jobs for technical people and business for vendors.

“Port Harcourt and Abuja terminal buildings are up and running. It means tremendous opportunities for private sector participation through concession.

“Ultimately, it is a big boost to smooth facilitation and passenger comfort. Lagos and Kano airports are waiting in the wings for inauguration. Expect the same positive effects on the industry.”

He said the effects of the Ease of Doing Business policy introduced by the Vice President, Prof. Yemi Osinbajo, shortly after he visited the Murtala Muhammed International Airport, Lagos had also helped travellers as well as businesses.

“That explains in part why passenger traffic has improved. Look at the numbers. Lagos handled 7.319 million passengers last year as against 6.862 million passengers in 2018,” he added.

Ukpong said the future of the industry would be improved with increased private sector participation, adding that the Federal Government must continue to deliver an environment in which they could thrive.

Some stakeholders were however not sure that the growth would be sustained in 2020.

The International Air Transport Association recently updated its analysis of the financial impact of the COVID-19 public health emergency on the global air transport industry.

According to the IATA, an umbrella body for airlines, the 2020 global revenue losses for passenger business will be between $63bn in a scenario where COVID-19 is contained in current markets and $113bn in a scenario with a broader spread.

The association said the global passenger traffic data for January 2020 showed that demand rose by 2.4 per cent compared to January 2019 but was down from the 4.6 per cent year-over-year growth for the prior month and the lowest monthly increase since April 2010.

Ojuri stated that with the way the first quarter started in 2020, Nigeria’s aviation industry might not record the same growth rate this year.

“We started with the China-US trade war and now the coronavirus. There has been a lot of restriction of movements and passenger traffic forecast is already reducing,” he said.

He added that the global crisis would likely trickle down to Nigeria’s domestic aviation industry.
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