High interest rate by commercial banks, lack of alternative choice for credit facility and an over regulated financial system have been identified as funding obstacles that discourage investment in the aviation industry.
Also Nigeria’s poor credit rating close the door against international financiers that could give long term credit facility at single digit interest rate to those who may wish to invest in airline business.
Aviation Expert and Managing Director of Katari System Nigeria Limited, Ali Mohammed Magashi disclosed this in Lagos and listed other funding obstacles to the growth of Nigerian aviation to include; over regulated financial system, which according to him impedes on simple and genuine foreign currency transaction, over regulation and expensive procedures by the Nigerian Civil Aviation Authority (NCAA), which he said impede on start-up airlines.
According to him, poor and hostile business environment has not helped matters, noting that for the Nigerian aviation industry to grow the federal government must provide conducive climate for investors to invest.
He accused NCAA of using multiple inspections of aircraft, training facilities and maintenance facilities to equally impede aviation growth.
On financing model for Nigerian airlines, Magashi said there should be targeted and effective subsidy from the federal government and intervention guarantee funds with very low interest rate.
He also called for longer tenure reduction of multiple taxation, which he said impedes airlines revenue and creates easier access to foreign exchange from the Central Bank of Nigeria (CBN).
Other solutions he proffered as funding models for the country include reduced Customs and Excise tariffs on aircraft parts or local airlines, reduction of landing, parking, navigational charges for local airlines, lighting up airports and continuous maintenance of airport facilities.
On why the federal government initiatives did not achieve the desired results, Magashi explained that the Bank of Industry (BOI) initiative fund that was put forward did not benefit airlines but the banks that were owed by the airlines because there was poor monitoring of the process.
He cited a situation where aviation agencies which includes NCAA, the Federal Airports Authority of Nigeria (FAAN),the Nigerian Airspace Management Agency(NCAA) Nigeria Meteorological Agency(NIMET)and the Accident Investigation Bureau(AIB) are working as silos.
Katari appealed to industry stakeholders to work together if the Nigerian aviation must achieve any meaningful growth, adding that the aviation industry has become one of the pillars of micro economy of the Nigerian economy.
For years Nigerian airlines have complained about the high charges, the Customs tariff on aircraft parts and the hostile operating environment.
The CEO of Medview Airline, Alhaji Muneer Bankole said government must have to support the airlines to ensure they survive and continue to provide the critical job of moving decision makers and top officials of government and economic drivers quickly from one destination to another.
“I will tell you that some countries today don’t need any landing charges because their indigenous carriers are being supported by their government, they go out for business, they come back home, no charges. Because that is the only thing the government can offer to support the airlines. Let’s go back to history, who built the airport and which fund did they use in building the airport? It is our tax money. And who are we carrying? We carry the nationals of Nigeria,” Bankole said.
