How Buhari, Saraki, And Malami Are Killing Nigeria Air By Oluwamayowa Tijani
I write for a generation that never flew Nigeria Airways, Virgin Nigeria nor Air Nigeria — and possibly will never fly Nigeria Air. A generation that has seen Nigeria let her down too many times, yet has done so much in keeping the country up. That generation, that has resolved and refused to pass a broken Nigeria to her own children. It is you, you who sails in the presence and absence of the Nigerian wind, it is you I write for.
Exactly 20 years ago, as Nigeria celebrated the end of Sani Abacha’s military rule and prepared for the entry of a new democratic system, I was at Air Force Primary School, Ibadan. In Ibadan, my primary school was located a few meters away from the Ibadan Airport. And my first encounter with an airplane was on one of our walks to the airport hanger, where we saw some old, wrecked planes. It was a relic of the past, but little did I know it was a prophecy for the future — this future, where we try to revive the relics of the past.
A lot has been said about the newly unveiled Nigeria Air; optimism has been cautious, skepticism has been loud, the economics of it all has been questioned, and of course, the politics of it has been X-rayed — like everything else in Nigeria. However, the political and business climate in the country may just be the biggest threat to the flight of this new Nigerian dream.
THE NEED FOR NIGERIA AIR
Africa is lagging behind in the air business, worse still, the rest of Africa has left Nigeria behind on that matter. Ethiopian Air, RwandAir, South Africa Air, EgyptAir and a shortlist of African carriers are doing way better than Nigeria did till 2003, when we closed the shop. As of 2016, 80 percent of air travel from Nigeria was done by foreign airlines. Today, that number is around 100 percent. Why? Ask Arik. Ask Med-View.
The facts of the situation are even more startling. To travel from one African country to the other, more often than not, you have to go through Europe. That is like travelling to Ibadan from Lagos, by first going to Abuja. Did you know it will take you twenty-three hours to Fly from Lagos, Nigeria to Yaounde, Cameroon? And cost you about N500,000? In that same time, and at about the same amount, you would have been to London, France and back to Nigeria.
Going to Cape Verde from Ghana, the only available flight is TapAir, which takes you to Portugal first, then Cape Verde. This will cost as much as N500,000. From Lagos to the same location, the only available flight goes to Morocco, then Guinea Bissau and then Cape Verde — 22 hours, stop over at two countries, and at over N500,000! Travelling within Africa is often via Frankfurt, Germany; Istanbul, Turkey; or Dubai, United Arab Emirates. If Nigeria Air has it as part of its mandate to make travelling within Africa easier for Nigerians, then it would make lots and lots of sense for businesses in Nigeria and Africa at large.
BUSINESS REASONS WHY NIGERIA AIR WILL FAIL TOO
Do you remember Kabo Air? Okada Air? They were from the 1980s. If you don’t, you should remember ADC, Chanchangi, Bellview, Sosoliso. All failed Airlines in Nigeria. Guess what else failed? Virgin Nigeria, Air Nigeria, Aero, and Arik.
According to Industry experts, 27 airlines have gone under in the last 25 years in Nigeria. The country’s aviation history also teaches that no privately-run airline in the country has lasted 30 years, the average lifespan is 10 years. This is how the story goes: First three years, we invest and make no profit, profit will come after three years. After three years, no profit, we then struggle to say, maybe by the fourth year. Then the fourth year passes, we accumulate more debt, and we struggle to pay these debts over the next three years of operation. By the seventh year, the death of the airline is in full throttle.
So what kills them so fast in Nigeria? Taxes, charges, and levies. It is of common knowledge that aviation charges in Nigeria are about the most expensive in the world. According to Akinwumi Adesina, the AfDB president, it is the same for much of Africa, where aircraft departure fees alone is 30 percent above the global average, while taxes, fees and charges are eight percent higher. Adesina says Africa may have an open sky policy, but then end up with empty skies.
The reality is more dangerous for Nigeria; the cheapest flight I have ever taken in my life was the AirPeace flagship N10,000 flight from Lagos to Akure, when the service kicked off in August 2017. Of that N10,000, about N6,000 was paid to the authorities in taxes, levies and charges. Today, that flight is N16,000, the same amount it takes to travel from Paris, France to Barcelona, Spain. Note: Lagos to Akure is 310 kilometres, Paris to Barcelona is over 1,000 kilometres.
Asides multiple taxation, airlines in Nigeria pay the five percent VAT, passenger service charge of N1000 per ticket, aircraft inspection fees, departure charges, landing charges, parking charges, terminal navigational charge, fuel surcharge, electricity charges, apron pass, just to name a few. Really, a few.
LESSONS FROM GHANA
Cecilia Dapaah, Ghana’s aviation minister, is also working on reviving the defunct Ghana Airways, but unlike Nigeria, the Ghanaians are putting the horse before the cart. Since Ghana started talking about reviving Ghana Airways, the country has scrapped 17.5 percent value added tax on air travel, and reduced the price of Jet A1 by 25 percent by removing some taxes. Both moves pushed down the country’s airfares, and has on the flip side led to almost 30 percent increase in air traffic, creating more jobs, and more revenue for both the companies and the government.
To all the taxes and levies in Nigeria, add the fact that Nigeria has about the most expensive Jet A1 fuel in the world — as at 2017, ours was 30 percent higher than the global average. How do we then expect airlines to survive?
THE BUHARI-SARAKI-DASUKI ANGLE
In 2016, I had an interview with Michel Arrion, the head of the EU business delegation to Nigeria. I asked him why big EU businesses were leaving Nigeria in their numbers and others were not willing to come in. He said: “They are convinced about the potential of Nigeria, but what is missing is to be sure of the protection of their investment.
“If they invest here, if they sign a contract, if they have a problem, can they go to court? Can they enforce their contracts? So the problem is the question of the rule of law,” he added.
Foreign investors, expected to partner with Nigeria on the national carrier are not getting any good signals to do so. The aviation business environment is hostile. Recent statements by Abubakar Malami, attorney general of the federation, blatantly ignoring the rule of law on the release of Sambo Dasuki, shows the world that we do not care about the laws. It tells you that when you are in bed with government and things go south, the courts can’t bail you out. Like Arrion said, your investment is not safe.
Aliko Dangote, whom Nigerians would regard as a friend of any government in power, says repeatedly that one of his biggest challenge in business is uncertainty/instability in government policies. Even Dangote.
The politics of 2019 is the biggest threat to Nigeria Air. With the Buhari-Saraki drama of the past few months, any investor is thinking; If Buhari loses, what becomes of the plan? The strongest opposition in the country, PDP, has already called the project a scam. If they win, it would not matter if the government owns five percent or 95 percent — down goes the airline.
To my generation, I ask, shall we have faith or shall we wait for another?
Follow Tijani on Twitter and other major social media platform @OluwamayowaTJ
