Nigeria requires US $135billion to develop transport sector

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Nigeria aviation industry, marine transport and rail requires at least US$135billion to develop if the vision 2050 plan is to be a reality in the coming years.

Experts who discussed this stated that the aviation industry would need about $50 billion to develop the industry in the same year, while marine transport will require $50 billion to put the industry on the part of growth and rail also requires $35 billion.

Chief Executive Officer of RTC Advisory Services Limited, Mr Opeyemi Agbaje, made this known while presenting a paper titled, “Raising Capital to Finance a Vision 2050 Plan” at a Colloquium 2017 organized by Nigeria Travels Mart (NTM) at Renaissance Hotel, Lagos.

He also stated that Africa as continent requires about $800 billion to grow the sector in 2050.

Agbaje stated that in 2016, the total amount of Foreign Direct Investment (FDI) that came to Africa was $59.373 while he put the total FDI into Nigeria aviation at $4.447 billion in the same year.

He added that the answer to the development of aviation industry infrastructure challenges is global FDI.

On how to attract global FDI flows into Nigerian aviation, Agbaje stated that it requires a stable macroeconomic environment, forward-looking and proactive policy, a clear and compelling vision for the industry shared by all stakeholders including government and the private sector and regulation that seeks to foster industry transformation (not just collect revenues).

He added that when the above are put in place, the investors and financial institutions, global and domestic should do the rest.

On the establishment of National Carrier(NC) and the debate it has generated, the Chairman of Aso Savings and Loans PLC, Ali Magashi said that he supports the idea of Nigeria establishing one as against setting up flag carriers.

He said this while presenting a paper titled, “A national Carrier: An Option To Fastrack Growth,” at the event.

According to him a national carrier airline is an airline floated by government as sole shareholders; to operate in the name of government and represent the government in all aviation related bilateral services agreements.

Explaining further, he said that national carrier airline is an airline floated by government as sole shareholders, to operate in the name of government and represent the government in all aviation related bilateral services agreements.

While he defined a flag carrier as a privately owned airline that by agreement is designated to represent a government and fly on behalf of the government to represent it on all bilateral designated routes, adding that the paper he presented supports the creation of a national carrier airline for Nigeria.

He gave reasons for supporting the establishment of the national because aviation is part of the macroeconomic infrastructure of government and that it helps to support and stimulate other sectors of business and that the industry is also a high capital, high risk, long gestation and low margin returns business, as such it cannot favourably compete with other less risky and higher return private sector investment opportunities.

Magashi contended that the failure of Virgin Nigeria should remain a recent sore in our psyche and deter us from the experiments of flag carrier.

To buttress his point, Magashi cited the example of Kenya that doubled its tourism revenue by the creation of Kenya Airways and this has positively impacted on its GDP

On the role of National Carrier in the growth of tourism, said that a national airline is an embassy with wings, transporting its country’s talents, skills, commerce, culture, cuisine, human resource and goodwill around the world.

He also pointed out that Dubai and Singapore have successfully made their airlines their main brand, driving their national identity and growth strategy, and so have Ethiopian Airline and Egypt Air done here in Africa.

Magashi added that according to the World Bank, every one per cent of government fund spent efficiently on infrastructure leads to an equivalent one percent growth in GDP.

He listed challenges bedeviling the establishment of a National Carrier to include: political will and sincerity of purpose, adding that for this to work, the presidency will have to drive this with all the political might and sincerity of purpose to avoid political interference and that the process of aircraft purchase and other related procurement processes should be done government to government with governments of selected aircraft manufacturers, to avoid extra third-party added costs.

He said that the process of feasibility and business plan should be open and transparent and it should involve local stakeholders for hands-on local market input and in using Federal Character, merit should determine recruitment, not politics and/or federal character, especially at the executive management level. According to him,” Competence, experience and success story track records should guide the process of executive recruitment – for example a minimum qualification experience of managing an airliner with a minimum of a hundred-line airplane for accountable manager and post holders.”

Also speaking, the Founder of Evergreen Apple Hangar, Lagos, Dr Harold Demuren said that despite the challenges the Nigerian aviation is facing the future for the sector is bright, adding the United States is very proud today because it is driven by vision.

He pointed out that by 2050, Africa will grow and that Nigeria will be the epic centre for aviation

To buttress his point, Demuren cited the case of Ethiopian airline which according to him some years ago got 30 per cent of ticket sales from Nigeria aviation market.

He said,”Nigeria has a large population of youths who are very knowledgeable in Information Communication Technology (ICT), adding that this one area government should invest in.

Nigeria, he said is natural hub for aviation because it has population and a very large, market, which according to him are the attraction.

Demuren, he added that high-speed train will compete with aviation in 2050, adding that in the same year most of the airlines would go low-cost.

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