MR PRESIDENT , I must confess that I am one of those who were surprised by
your long-pursued election. Your dexterity in fighting for what you believed in
for so many years has inspired many Nigerians including myself. Since that
historic election, I have paid a very close attention to the man and his
message.
One of your first messages which was delivered in the second
week after the election was that in 16 years the previous administrations which
was run by the People's Democratic Party PDP, destroyed all the major employers
of labour, you mentioned; Nigeria Airways Limited, Nigerian Shipping Line and
Nigeria Railway Cooperation.
This particular message resonated with me, for I was one of
those that were chased out of Nigeria's Airways Limited by agents of the state
who placed the gates of the company under lock and key, thereby destroying the
collective aspirations of many Nigeria and sending a lot of people to their early
deaths.
A lot of lies have been told about why the Airline was
liquidated by those who destroyed it. They said the Airline was heavily
indebted and her operations were being mismanagedand therefore there was no
need to put more money it. That is very far from the truth! Recently, Nigerians
read in the papers about recommendations advising Mr. President, that indebted
private airlines should be formed into a National Airline. Such life line was
never extended to Nigeria Airways Limited before her liquidation. That
notwithstanding, the recommendation will portend grave injustice to Nigerians
and will be a grave mistake which this government cannot afford. I shall return
to this later.
Nigeria Airways Limited: The Golden Geese When Nigeria
Airways was formed in 1958, after separation from West African Airways
Corporation (WAAC), it was to provide Air Transportation and also serve as a
backup to the Nigerian Air force. Over the years, NAL performed these functions
very creditably supporting troop movements, sports delegations hajj uplifts,
cash movements by the CBN etc. Often times the Airlines services were never
paid for, but NAL continued to fulfill the aspirations and mandates of her
shareholder the Federal Government of Nigeria. Unfortunately, as the years went
by there was no effort by successive administrations to re-fleet the Airline
and NAL began to lack capacity, but never capability for among her staff were
the best trained aviators any country can boast of.
What The President Needs to Know It has been said, that as
at the time of her forced liquidation, that NAL was indebted to the tune of
millions of dollars. This is a lie that has been propagated by those who had
other reasons to liquidate the Airline. The biggest debt which NAL owed at a
time was to Equator Leasing Cooperation(ELC). The amount of the debt was for
$31 million, which resulted from nonpayment of lease rentals of a DC-10
aircraft which NAL leased from ELC. I can authoritatively report that the debt
was paid by the General Abdul salami Abu-Bakr administration. Details of this
transaction still exist with the Nigerian High Commission.
The final document was signed off by the High Commissioner
and the money was released from the Federal Government accounts in London. The
truth is that as the time that Nigeria Airways was liquidated, the only debts
being owed were trade debts which are current operational debts.
It is a known fact that NAL was the biggest real estate
investor of all government Agencies. As at the time of her liquidation NAL
owned about 300 prime properties scattered all over the world. The last
valuation performed by ODUDU AND COMPANY, a real estate firm in Nigeria (valued
the properties at billions of naira), yet the company was sold. Some of these
properties included the large expanse of land beside Arch Bishop Vinning church
in Ikeja G.R.A, including the Ikeja golf course.
They also included properties that were returned by the
General Abacha family after the General's death. NAL had about five choice
properties on Kwairanga Street in Kano, the same street where the General
lived. Some of these properties were sold to the General's representatives by
NAL Management under a directive from the Ministry of Aviation. When the
General died NAL approached the representatives and these properties were
released. Now those properties were part of what was sold in the forced
liquidation of NAL, yet Nigerians are yet to be told how much was realized from
these sales.
Mr. President Sir, in 1998, the then management of NAL,
decided to create five profit centers from the core business of the Airline. Five
companies were set up. These included the following:
SKYPOWER AVIATION HANDLING COMPANY (SAHCOL) SKYPOWER HOTEL
AND CATERING SERVICES (SKYCATER still in existence) SKYPOWER PROPERTIES LIMITED(SKYPOL)
and, SKYPOWER PRINTING AND PUBLISHING COMPANY LIMITED(SKYPRINT). These
companies were set up to be fully owned subsidiaries of NAL. They were asked to
fend and survive their own. One of these companies, SAHCOL became very
successful and at a time was adjudged the best managed Government owned Company
by the Central Bank of Nigeria.
This particular money earner was sold by the past
administration as part of the liquidated assets of NAL and is now in private
hands and till date Nigerians' are yet to be told exactly how much the company
was sold for and what the money realized, was used for. The accounting firm of
Babington Ashaye & company were appointed liquidators of NAL and disposed
of all assets of NAL but not her liabilities especially to the staff.
This Firm took over all assets all NAL including over 300
real estate, which were all sold. These assets were one of the main reasons why
NAL was prematurely liquidated! Since Government is the single share holder of
NAL, her assets therefore belongs to the Government and the Nigerian people.
The liquidators of NAL are duty bound to account to Nigerians about their
investments.
NAL's Staff Emoluments The airlines staff were among the
best in the world of aviation. They included members of the elite Presidential
fleet who flew Nigerian Presidents from the days of President Gowon. Some of
them are still in service, yet some were allowed to die unsung by a Government
they dedicated their lives to.
A case in point is Captain Abdullahi Shehu, a first class
Pilot who served several years on the Presidential fleet but died at the Ilorin
General Hospital for lack adequate medical care. He is eminently qualified for
a posthumous Presidential honour. Since the liquidation ofNAL,Nigeria have lost
over 400 professional Aviators who served in the Airline but were refused their
due by the Government. The government of President Shehu Musa Yaradua paid five
years salary arrears to the staff, with promise to pay the balance, but he did
not live to fulfill that promise.
If the proceeds of the liquidation of NAL are to be properly
accounted for, it will be enough to pay the benefits and set up another airline
without taking money from the government coffers.
Involvement of Virgin Atlantic and Other Vested Interests
Mr. President, the traffic pattern between Lagos and London is for upper class
passengers who fly British Airways Limited, the Middle class passengers and
others who flew Nigeria Airways limited, Virgin Atlantic and the rest. The
competition was actually between British Airways and Virgin Atlantic. Their
battle ground however shifted to NAL, Lagos -London route being by far one of
the most lucrative routes of these airlines. When Virgin started making
overtures to the government to partner with NAL, British Airways fought back
and went as far as letting NAL fly one of her Aircraft for free.
Nigeria AirwaysManagement resisted this intrusion by Virgin
Atlantic using our Government. The Managements warning about the true
intentions of Virgin Atlantic fail on deaf government ears and NAL was forced
to go into a forced marriage with Virgin Atlantic. The predatory business
practices of the Virgin Mamagement were one of the final straws that destroyed
the Airline. With Nigeria Airways out of the way, Virgin Management sold
another dummy called Virgin/Nigeria to the government. Thiscontraption was
never planned to fly as the agreement was skewed to fail and fail it did.This
cleared the way for two predatory Airlines from Britain to occupy the Nigerian
airspace without any competition whatsoever!
The Advice of The Handover Commitment Nigerians learnt from
the pages of Newspapers that this committee advised that some local airlines
which are heavily indebted should be formed into a National Airline; this will
be a huge mistake and shows a lack understanding of the aviation industry by
the members of the Committee. Several questions needed to addressed. · What
will become of the huge debts of these airlines? · Will they relinquish their
shares to the Government? · What about their labor issues, will the government
pay off their staff before paying off NAL staff who actually worked for the
Government?
These and several other questions are reasons why this
recommendation is not workable. In the very recent past they Government of
Nigeria invested over NGN35 billion in a private Airline called NICON Airline
from the so called Aviation Intervention Fund. That Airline is now history yet,
they promoters are yet to account for the money they received from the
government
THE NEED FOR A NATIONAL AIRLINE The President recognized
theneed for National Airline in the second week after his historic elections
and I will amplify them. The return on investment(ROI) in the aviation industry
hovers around 13-15%, yet countries continue daily to shore up their national
carriers for reasons that I will mention a few bellow:
Nigerians are travelers. They are the darling of most
airlines and that is why most of the Airlines will use every diplomatic muscle
to come to Nigeria. Nigeria is also mainly a cash economy, so people daily buy
ticket with cash. These monies are then moved out of Nigeria by these foreign
Airlines without investing anything in the economy. A national Airline will
retain these funds in Nigeria.It's estimated that capital flight in the
Aviation industry will reach over N350 billion by the end of 2015. Nigeria can
no longer afford such wanton exploitation of our airspace!
A national airline will invest in adequate manpower
development for the industry. That was one of the duties performed by NAL and
today all those trained by NAL are either dying off or becoming old. So we are
left with the importation of manpower for a sensitive industry such as
aviation, without any care as to the various implications especially to our
national security.
A national airline brings in tourists and businessmen who in
turn, bring in much needed foreign exchange to support the economy. This is why
the British Government supports British Airways; KLM is supported by The
Netherlands, Air FRANCE by the French Government, Emirate Airline by the
UAE,Lufthansa by the Germans, Ethiopian and Egyptians Airlines by their
respective governments. Nigeria should follow the examples of theses developed
economies that support their national airlines, with the attendant and
accruable benefits to the country.
Hard Facts About the Aviation Industry's Capacity to Boost
the Economy and Provide over 100,000 Jobs in the Next (5) Years The Oxford
Economics in their report on the Nigerian Aviation industry gave the following
facts,
"The aviation sector contributes NGN 119 billion (0.4%)
to Nigerian GDP. This total comprises: NGN 59 billion directly contributed
through the output of the aviation sector (airlines, airports and ground
services); NGN 34 billion indirectly contributed through the aviation sector's
supply chain; and NGN 27 billion contributed through the spending by the
employees of the aviation sector and its supply chain. In addition there is NGN
78 billion in catalytic benefits through tourism, which raises the overall
contribution to NGN 198 billion or 0.6% of GDP.
Major Employer The aviation sector supports 159,000 jobs in
Nigeria. This total comprises: 44,000 jobs directly supported by the aviation
sector; 64,000 jobs indirectly supported through the aviation sector's supply
chain; and 51,000 jobs supported through the spending by the employees of the
aviation sector and its supply chain. In addition there are a further 130,000
people employed through the catalytic (tourism) effects of aviation.
High Productivity Jobs The average air transport services
employee generates NGN 3.5 million in Gross Value Added (GVA) annually, which
is nearly seven times more productive than the average in Nigeria.
Contribution to public finances The aviation sector pays
over NGN 8.5 billion in tax including income tax receipts from employees,
social security contributions and corporation tax levied on profits, with a
further NGN 17.0 billion of revenue coming from VAT on domestic and
international flights originating in Nigeria. It is estimated that an
additional NGN 8.9 billion of government revenue is raised via the aviation
sector's supply chain and another NGN 7.1 billion through taxation of the
activities supported by the spending of employees of both the aviation sector
and its supply chain.
The above are bare facts about this hugely neglected
industry. The truth will become more apparent when we have a national carrier.
The verifiable estimation is that if run properly a new national carrier will
generate an additional 100 000 jobs in the next five (5) years". The above
facts and much more are part of the reasons why Mr. President should urgently
fix this industry.
Investment/Hidden Funds in Aviation The big question will be
about the source of funds assuming the Federal Government decides to embark on
this venture. I have shown that when the proceeds of NAL'S liquidation are
accounted for, the Government will realize enough money to invest in this new
venture. In addition to the above is the issue of BILATERAL AIR SERVICES
AGREEMENTS BETWEEN NIGERIA AND OTHER COUNTRIES (BASA). Air spaces are valuable
property owned by the Government. Where country A decides to fly into country
B's airspacesix times a week, countryB must be able to fly into country A's the
same equal times as B. If for any reason country B cannot fully use her capacity
which is called frequency in aviation and A is doing more flights than B, such
excess frequency are monetized.The details of these agreements and much more
are what is contained in Bilateral Air Services Agreements between one country
and another and is known as BASA.
Before the liquidation of NAL,she was in charge of Nigeria's
BASA rights and moneys accruing from these rights came to NAL. With the
liquidation of NAL, the Ministry of Aviation assumed this responsibility. The
money is warehoused at the Central Bank of Nigeria with certain percentage of
the proceeds going to the Nigerian Civil Aviation Authority NCAA. The funds in
this account runs into millions of dollars and this is verifiable. Assuming
that the Government cannot find funds, BASA money is more than enough to start
two new Airlines!
Yet, there are better alternatives. Nigeria is a country
that is blessed with so much intelligent and brilliant minds. In these group
you find entrepreneurs who given the right incentives will invest with the
government to give Nigeria a befitting National Airline. Government's equity
will come in form of her BASA rights and provision of Sovereign guarantees.
These guarantees will assist the new start up airline to access funds from so
many finance agencies that are ready to advance funds to institutions giving
the right parameters. These institutions include but are not limited to the
following:
AFREXIM BANK (A PAN
AFRICAN BANK BASED IN CAIRO) · BOEING FINANCE CORPERATION · AFRICAN DEVELOPMENT
BANK ADB and; Several other leasing agencies across the world. There are many
other financial arrangements and scenarios which can be used to access funds
from the international financial market for projects such as this. In
conclusion, I have shown that the decision to liquidate NAL were for reasons
that were very inimical to the economic well being and corporate existence of
Nigeria.
I have also shown that proper accounting of proceeds from
NAL'S liquidation can settle her staff benefits and set up a new National carrier.
I have also provided alternative sources of financing which are practicable and
will help Mr. President bequeath a functional and sustainable aviation industry
to generations yet unborn.
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