The nation’s agriculture has been characterised by early and strong rainy season in the South and long dry season in the North that affect crop and livestock production as well as have an impact on the well-being of farmers.The fear is increased poverty rate across the country. To militate against this, stakeholders say specialised agric weather and coordination is key to preparing farmers against environmental disasters, DANIEL ESSIET writes.

 

 

NIGERIA like other agrarian countries has suffered from the impact of climate change. While some parts of the country has seen little water to farm, many areas have seen heavy seasonal rain and flooding exacerbated by storms. In some of these areas, heavy seasonal rain that came too soon and failed flood mitigation measures prevented early planting.

Following the chain of hydro meteorological events, most of which involved crucial agricultural heartlands, there is worry that it will impact food security in the areas. Across the industry, there have been records of destruction wrought by catastrophic weather.

As   thousands of acres of farmland are under cultivation, farmers are struggling to  control erosion, improve soil health and trap carbon in the soil. Some acres last year were simply too wet to be planted, leaving farmers with significantly less income from little areas left for cultivation.

The extreme weather has sparked an increased interest in climate change. This is because of  its  impact on farm production. In some areas, a growing number of farmers are changing how they farm to be more resilient to climate change.

One of them is Debo Thomas, a farmer in Ogbomosho, Oyo State.

His concern is that smallholder farmers, responsible for the bulk of agricultural, are particularly vulnerable to changing weather patterns, calling for measures to build up climate resilience that can enable them to withstand climate change while maintaining agricultural productivity.

According to him,  there is a high demand for forecasts to help farmers to choose crop varieties that are optimal for the upcoming growth season.

He said the industry needs dependable agricultural weather advisory system to support farmers and agribusinesses to make weather-optimised decisions.

Using the forecasts, he added help farmers plan their agricultural activities and protect their crops when hazardous weather is forecast.  He cultivates maize and cashew.   However, he likes to plant when he is sure there will be enough rains to wet the ground.

Extreme weather events, such as excess rainfall, were a major cause of crop yield losses and food insecurity worldwide, according to analysts. Last year, torrential rains in most parts of the country soaked fields, leaving the sodden soil unsuitable for planting in most parts of the country.

One farmer who does not want to suffer losses as a result of climate change is Innocent Mokidi. He understands how weather challenges can lead to slim profit margins.

A farmer in Nassarawa, Mokidi is working smarter, more efficiently to produce crops with climate-positive production practices.

Mokidi said climate change poses problems for crops farmers. To mitigate this, he has deployed crop management strategies such as cultivating short season crops, shifting to new crops, legume intercropping, crop diversification and changing planting dates.

Mokidi believes it was important to implement measures that ease the adverse effects of climate change. This, he stressed, depends on dependable agric specific weather forecasts.

He said: “Because agriculture is timing and you need the right time to cultivate and the weather forecast will guide you on this. More also with the weather forecast you can understudy the rainfall pattern for wet season farm.”

According to him, accurate agric weather information offers potential ways to strengthen farmers’ response to climate change.

More and more agricultural areas are coming under the ambit of extreme weather events.

For this reason, a former Dean, Faculty of Agriculture, University of Ilorin (UNILORIN), Prof Abiodun Adeloye emphasised the need for agric specific weather forecasts that present analysis of rainfall patterns.

A past  President, Nigerian Meteorological Society (NMetS), Adeloye said weather forecast  was  critical for farmers to make the correct decisions on harvesting, processing, storage, and supply of their produce.

His words: “For farm work information such as soil temperature. Sunshine hours are very important along with conventional weather information, so forecasts specific for agriculture is important.”

He pointed that climate change contributed to outbreaks of disease among animals and poultry.

Last year, rains in most parts of the country late, which led to late planting and harvesting of some crops.  Delay in the arrival of rains force farmers to rethink their planting strategies.

While dry spell and weather in the North caused some challenges, a lot of farmers depend on irrigation to carry on with their activities.

In his  view, a  plant breeder, Prof  Onuh Martin  said locally specific weather forecasts and agricultural advice  will  help farmers in better adapt to increasingly variable weather .

He said the sector   was prone to various kinds of changing weather patterns and hazards that threaten farmers causing large-scale loss to the economy.

Why agric weather forecast matters

Martin continued: “Weather forecast is very important in agriculture for determining cropping period (time) for some crops, simulations of weather components and their possible effects on agric production. Also   determining the possible outbreak of pests and diseases and ways they can be controlled.”

He said the sector needs for proper planning of agricultural production, in terms ofw quantity and quality of rainfall, sunlight among others.

The Country Manager, OCP Nigeria, Mr Caleb Usoh was of the opinion widespread changes in rainfall and temperature patterns is threatening agricultural production.

He noted that the threats can be reduced by increasing the adaptive capacity of farmers as well as increasing resilience and resource use efficiency in agricultural production systems.

Usoh observed that agricultural output strongly dependent on the weather and that the National Meteorological Agency   needs to work with farmers to provide agric specific weather forecasts that will help famers to make profits.

While the coverage of weather related forecasts and extension information is improving, he said a lot more needs to be done to make reliable information accessible to farmers.

He said such information will further guarantee minimal losses from associated hazards, which are becoming quite devastating in this era of climate change.

He said the agency has the capabilities and the equipment to deliver reliable information for farmers to act on it.

At the International Conference and Annual General Meeting of the Nigerian Meteorological Society (NMETs) held at the Department of Meteorology and Climate Science, Federal University of Technology, Akure, Ondo  State, with the theme Climate Change: Challenges and Prospects , the Director-General/CEO, Nigerian Meteorological Agency (NiMet) Professor Sani Abubakar Mashi represented by Prof Peter Odjugo said NIMET was  deploying its expertise to combat climate change effects in Nigeria through mounting fully automated weather stations, generating data for research, seasonal rainfall prediction, quality weather review, and drought review and crop weather calendar.

Abubakar said climate change is evident in the gradual increasing temperatures, sea level rise, submerging of land surfaces, flooding of coastal area and desertification of the north. He said effects of climate change can be tackled by all with afforestation, healthy attitude and migration.

Early this year, NiMet has revealed that farmers who cultivate early were likely to have poor harvest.

“Farmers are advised to avoid planting during the pre-onset period. Rather, they should focus on land preparation,” it said.

A pre-onset period is the season that comes before the rainfall season.

“Before the full establishment of the onset of the planting season over the various ecological zones, a couple of rainfall events are expected to occur which could be enormous and tend to give a false start of the season,”.

Though such rainfall events are not uncommon, however, their frequency seems to be on the rise.

Some forcing functions have been observed to be likely responsible and will be monitored carefully and keep Nigerians informed, the agency said.

It highlighted that farmers should, therefore, avoid early planting during this period to avoid losses. In the document, farmers were encouraged to adopt climate smart agricultural practices that will boost the output for the year. “Authorities concerned should facilitate the provisions of early maturing and drought resistant varieties to guard against the risk of crop failure and poor yield, “ it said.

Also, soil and water management is essential for maintaining the production of food crops and folder under conditions with high water stress.

The forecast said soil erosion will be controlled through the introduction of various techniques, all which could also contribute to increased infiltration, improved soil fertility and water conservation to guarantee crop production in the country.

According to the document, cropping patterns adjustments can also help farmers adapt to changing weather patterns.

Additionally, conservation agriculture, which encompasses the techniques of minimum mechanical soil disturbance, aims at achieving sustained agricultural production and environmental conservation.

This year also, Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and the NiMet signed a Memorandum of Understanding (MoU) for the utilisation of meteorological data among other big data sets to enhance yield increase and productivity of farmers and avoidance of catastrophic weather risk events.

The Managing Director/Chief Executive, NIRSAL, Mr. Aliyu Abdulhameed, said the collaboration will ultimately lead to the generation and provision of agro-meteorological weather information and other strategic services for supporting finance and investment decisions.

He said the MoU represented a significant step towards achieving precision agriculture in the country as well as marked the start of a strategic partnership with NiMet, whose official mandate is to provide climate and weather data services to the country.

Abdulhameed said NIRSAL would under the partnership pursue strategies to downscale the Seasonal Rainfall Prediction (SRP) components including temperature, onset of rainfall and dry spells, cessation of rainfall, among others to farmers.

He said it will be an awareness campaign that will guide farmers against pre-onset rainfall (false-onset) and recommend risk measures in places that will experience severe dry spells namely Bauchi, Zamfara, Katsina, Kebbi, Borno and Yobe, where, the dry spell is expected to last between 10 to 21 days. He added that NIRSAL will use platforms like town hall meetings, radio jingles and other channels of mass media to ensure the dissemination of right information to farmers to support activities in the upstream farming segment of crop value chains.

The NIRSAL boss stressed that the partnership will further pursue the development of crop-specific calendars for NIRSAL’s focus commodities to provide precise information on planting, maintenance and harvesting within the ACEAs leveraging NiMet data.

The Executive Secretary, HEDA Resource Centre,Sulaimon Arigbabu   said rapid changes of weather affected crop production and requires , a strategy to deal with the ongoing climate change.

He said agriculture is a key sector in economy, providing livelihoods for majority of the population.

 

The services sector is the economy’s largest. It also holds the key to tackling the nation’s rising unemployment, because of its capacity to deliver high productivity jobs. But, the sector is on its knees, badly hit by containment measures to halt the spread of the COVID-19 pandemic. Assistant Editor CHIKODI OKEREOCHA reports.

It was a deft move borne out of survival instinct. To ride the storm tossed on its path by movement restrictions and other containment measures to stem the spread of the COVID-19 pandemic, car-hailing firm Bolt has rejigged its services.

Bolt, which has been confronted by plunging revenue caused by huge drop in demand for existing services, as customers cut down on non-essential trips due to the COVID-19 pandemic, may have set the template for operators in the nation’s services industry to weather the COVID-19 storm by throwing its hat in the delivery services ring.

The company launched its “Bolt Business Delivery” service in Lagos and Abuja, the epicenters of the COVID-19 lockdown measures. The service, The Nation learnt, boasts a simple, easy-to-use web interface that links businesses with couriers and allows vendors to place orders online to deliver products to their customers.

On the strength of the service, orders can be set to be picked up immediately or scheduled to be collected within 48 hours. When adding orders, vendors will receive a price estimate. Once they confirm request delivery, Bolt will dispatch a courier to collect the order at the specified time.

Bolt Country Manager for Nigeria, Femi Akin-Laguda, explained that in launching Bolt Business Delivery, the company had two key goals in mind.

The first was to make sure that drivers on the Bolt platform continue to earn a living safely. The other goal was to help businesses selling the essential products defined by the lockdown regulations to get orders to their customers quickly and safely.

Also driven by corporate survival, as the knock-on effects of the COVID-19 pandemic force not a few operators in the services industry to either scale down their operations or shut down, Uber, another ride-hailing company, has temporarily suspended its operations in Nigeria following the movement restriction order to stop the spread of the virus.

Uber, however, hopes to continue services when movement restriction is fully lifted. The company is also said to have pushed into grocery deliveries with its food ordering platform – Uber Eats, besides announcing a series of partnerships with supermarkets, convenience stores, and other businesses to offer home deliveries of essential items.

However, Bolt and Uber are just two out of several key players in the nation’s services industry hardest hit by containment measures put in place by the Federal and state governments to stop the spread of the COVID-19 pandemic.

Other major players in the services industry affected by the movement restriction and other containment measures include operators in tourism/hospitality, courier/logistics, transportation, and medical services.

Others are those in education, banking, insurance, waste disposal, telecommunications services, aviation, consultancy services, trade (wholesale and retail), and advertising, which is part of media and entertainment, among others.

The severity of the impacts of the containment measures has been evidently more pronounced on the services sector, because of its wide nature. The sector is widely acknowledged as the largest sector in the economy, accounting for 53.97 per cent share of the country’s Gross Domestic Product (GDP) in 2018, according to the National Bureau of Statistics (NBS).

The sector also has the highest employment elasticity, according to analysts at professional services firm PricewaterhouseCoopers (PwC Nigeria).

According to them, the sector is capable of delivering high productivity jobs with great potential for income generation and poverty reduction.

For instance, Partner and Chief Economist at PwC Nigeria, Dr. Andrew S Nevin, said estimates of employment elasticities suggest that Nigeria’s services sector has the highest employment potentialat 0.5, relative to agriculture’s -0.1 and manufacturing’s 0.3.

Given the huge number of Nigerians engaged in the sector, where they offer diverse services to businesses and individuals, it is hardly surprising that operators in the sector are among the hardest hit by the dislocation caused by containment measures to stop the spread of the COVID-19 pandemic.

The rampaging COVID-19 was first identified in Wuhan, Central China, last December. But it has since spread across continents from mainland China, its roots, to Asia, Europe, America and Africa, leaving in its wake tales of deaths and unprecedented disruption in business, economic and financial activities.

The pandemic eventually found its way into Nigeria on February 27, this year. The following month, precisely March 11, the World Health Organisation (WHO) declared it a global pandemic.

Rattled by the deadly bug, the Federal and State Governments swiftly responded by ordering several containment measures including partial and total lockdown in some parts of the country to control the its spread.

Expectedly, such measures, combined with the crash in oil price, which is being driven by geopolitics as well as reduced demand in light of the pandemic, forced operators in all sectors of the Nigerian economy to shut down their operations. Those still operating are forced to downside their workforce or compel them to work from home.

However, the first phase of the gradual and controlled easing of the lockdown and travel restrictions began last week Monday, May 4. But almost two weeks after the relaxation of the lockdown began, affected operators, particularly those in the services sector, are still gasping for breath. And they are, therefore, rethinking their strategies to remain in business post COVID-19.

 

Operators in tourism/hospitality hopeful

Even before the easing of the movement restriction, operators in the tourism/hospitality sector have put forward a number of options to ensure the sector’s recovery post COVOD-19, including the need for operators to embrace innovation, while the government removes Value Added Tax (VAT).

These were key highlights of a video-conference with the theme: “Impact of COVID-19 on the Hospitality and Tourism Sectors in Nigeria,” held on April 16, 2020 via Zoom.

A common thread that ran through the submissions and presentation by industry operators and experts at the conference was the need for operators to constantly innovate, as this will enable them stand the chance to ride the storm of the COVID-19 pandemic and also enjoy a rise in earnings in the last quarter of this year.

At the conference organised by Hotel Expo Nigeria (HEN) and supported by Women In hospitality Nigeria (WIHN), WIGN Founder Amaka Amatokwu, Eko Hotels Rooms Division Manager Jihane Khoury, and MP Hotels Managing Director Bruce Prins were unanimous in their submissions that the industry needed innovative ideas and concepts to continue to attract patronage from local and international guests.

The Managing Director of Dana Airlines, Obi Mbanuzuo, stated that while the Central Bank of Nigeria’s (CBN’s) plan to provide a stimulus package for the commercial airline sector was laudable, it would be more beneficial for the domestic carriers if the Value Added Tax (VAT) was removed.

However, the removal of VAT may be a hard sale to the Federal Government, as the Secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF), Boss Mustapha, had recently foreclosed the removal or reduction of VAT) from 7.5 per cent.

The SGF said in spite of the coronavirus pandemic that has ravaged the nation’s economy, the Federal Government cannot remove or reduce VAT from 7.5 per cent, insisting that the country’s purse was already bleeding. According to him,, the Federal Government takes only 15 per cent of the VAT while the balance is shared for states and local governments.       

The operators’ campaign to salvage the sector came following the barrage of travel restrictions, social distancing, isolations, curfews and total lockdown to contain the spread of the scourge. These forced a total freeze on all hospitality and tourism-related activities.

A Tourism Consultant and Vice President (South East), Federation of Tourism Association of Nigeria, Ngozi Ngoka, said the tourism/hospitality industry was the first and has been the worst hit so far.

She said this was because the industry is primarily involved in the provision of accommodation, transportation, entertainment, food and other services to individuals who move from place to place for business and pleasure.

According to her, restrictions of movement, gathering of people and closure of borders between states are all tourism activities that have been put to a halt. She said airlines, accommodation facilities, ground transportation, event centres, restaurants, beaches, nightclubs, museums, game parks/reserves and all tourism facilities are currently in limbo.

Even with the lifting of the restrictions, the tourism consultant believes that it will be a long and gradual process for tourists to have the confidence to move around or congregate freely.

Ngoka is right. At present, foreigners and expatriates who form the bulk of customers of hospitality and tourism-related outfits in Nigeria are yet to return to the country after they were evacuated by their home countries.

Countries, such as United Kingdom (UK), France and the U.S, have been evacuating their nationals in Nigeria, even though the death toll from COVID-19 outbreak is more in their countries than Nigeria.

Their action, The Nation learnt, was informed by the belief that Nigeria’s public healthcare system is unreliable and not robust enough to handle the treatment of COVID-19 patients especially as the number of confirmed cases in Nigeria has continued to rise astronomically.

For instance, from the first index case of an Italian who flew into Nigeria on February 27, last year, Nigeria now has 4, 399 cases of COVID-19 with 143 deaths and 778 discharged as at Sunday, May 10, 2020, according to figures on the Nigeria Centre for Disease Control (NCDC) verified twitter handle.

 

Fears over job, revenue loses

The implications of the evacuation of the foreign nationals from Nigeria on jobs and revenue are dire. For instance, the United Nations World Tourism Organisation (UNWTO) predicted that because of the unparalleled introduction of travel restrictions across the world, including Nigeria, international tourist arrivals will be down by 20-30 per cent this year.

The UN specialised agency for tourism in its assessment of the likely impact of the COVID-19 on international tourism stated that an expected fall of between 20-30 per cent in international tourist arrivals could translate into a decline in international tourism receipts (exports) of between $300-450 billion, almost one third of the $ 1.5 trillion generated in 2019.

“Tourism has been the hardest hit of all the major sectors as countries lockdown and people stay at home…Tourism is a lifeline to millions, especially in the developing world.

Opening the world up to tourism again will save jobs, protect livelihoods and enable our sector to resume its vital role in driving sustainable development,” UNWTO Secretary-General Zurab Pololikashvili said, last week.

Earlier, the World Travel and Tourism Council (WTTC) had also warned that the COVID-19 pandemic could cut 50 million jobs worldwide in the travel and tourism industry.

WTTC’s Managing Director Virginia Messina projected that of the 50 million jobs that could be lost, around 30 million would be in Asia, seven million in Europe, five million in the Americas and the rest in other continents, including Africa.

Messina said equivalent to a loss of three months of global travel in 2020 could lead to a corresponding reduction in jobs of between 12-14 per cent. She also estimated that once the outbreak is under control, it would take up to 10 months for the tourism sector to recover.

Although, the WTTC boss did not specifically say how many of this projected job cut will come from Nigeria, most hotels in Africa’s largest and most populous economy are  operating with less than 30 per cent guest occupancy rate.

The President, Federation of Tourism Associations of Nigeria (FTAN), Alhaji Saleh Rabo, said because of the toll COVID-19 is having on his members’ business bottom-line, many of them have been forced to downsize in order to reduce cost and save their businesses from shutting down completely.

Rabo said, for instance, that FTAN members are the largest investors in Nigeria’s tourism industry, including investments in hotels, resorts, transport services, tour operations, travel agencies etc. And they have been providing thousands of direct and indirect jobs to Nigerians.

 

Transporters, travel agencies count losses

Operators in the transport/travel agency sub-sector are also agonising after reportedly losing over N160 billion to the COVID-19 outbreak. Rabo attributed the heavy financial hemorrhage by travel agencies to mass flight cancellations by domestic and international airlines.

The National President, National Association of Tour Operators (NATOP), Bilkisu Abdul, also said the pandemic has taken its toll on efforts to boost tourism in Nigeria. “We are all scared because of this COVID-19.  A lot of our planned trips have been put on hold,” he said.

Abdul, who is also the Chief Executive Officer (CEO) of BBOOG Travels and Tours, said, for instance, that her planned trip to Turkey with about 60 people was billed for April, but she had to put that on hold as a result of the scare. “You can imagine the losses,” she complained.

 

Courier, logistics operators also

Even before the impacts of the lockdown started manifesting on operators in the courier/logistics industry, courier operators had kicked against their inclusion in the lockdown order announced by President Muhammadu Buhari.

As part of the containment measure to break the transmission of COVID-19, the president had on Sunday, March 29, 2020, announced a 14-day total lockdown in Lagos and Ogun states, as well as the Federal Capital Territory (FCT), Abuja.

The directive, however, allowed companies that render essential services in the affected states to continue operations. Companies in that basket include food and drug companies, medical/health institutions, oil installations, utilities, certain transport companies and members of the press.

But the non-inclusion of courier operators in the essential services basket did not go down well with courier operators.

The operators under the aegis of Association of Nigeria Courier Operators (ANCO) argued that the courier services industry is among the few critical ones that should be exempted from the lockdown.

The aggrieved operators, who spoke through their National President, Okey Ubah, said the exemption government gave to the communications industry ought to have been extended to courier operators since their services are also communication, though ground communication.

As a result of the restriction on movement, vendors of courier services are also allegedly being harassed by some enforcement agents, a development that has forced many of them to either scale down or suspend their operations.

Retailers in limbo

Wholesale and retail sale (trade) is the second largest sectoral contributor to the nation’s GDP, accounting for 16.4 per cent of GDP in 2018, with an estimated market size of $109 billion.

Nigeria also ranks as the eighth most attractive investment market for retailers in Sub-Saharan Africa and 28th globally, largely based on its volume of consumers and its growing middle class.

The burgeoning sector has attracted a wide range of foreign investors, including South Africa’s Shoprite, the continent’s largest supermarket chain, SPAR, the Dutch retailer, and Pick n Pay, another South African retail giant who is in partnership with a local chain-store operator, AG Leventis & Co.

However, operators in this segment are ruing the impacts of the COVID-19 lockdown on wholesale and retail trade, both online and traditional. They lamented that the shutdown of factories, reduced access to raw materials and commodities due to supply chain challenges affected the supply of products to them

To salvage the situation, Partner, KPMG in Nigeria, Mr. Ajibola Olomola, said there is need to intensify efforts towards building domestic capacity across critical sectors and also increase investment in technology that would optimise existing business processes (e.g. digital and online presence).

Olomola, who spoke at a recent forum organised by the Lagos Chamber of Commerce and Industry (LCCI) in Lagos, also said there was the need to experiment on the possibility of large-scale remote working for employees and its impact on productivity, as well as reconfigure supply chain (e.g through backward integration for input that can be sourced locally).

The KPMG tax expert stated that the COVID-19 crisis has given rise to both challenges and opportunities, with unforeseen events playing a big role in the transformation and reshaping of the retail industry.

He said, for instance, that emerging community shops and online shops are increasing their trading volume and attracting a mass of new customers.

Jumia Nigeria appears to have ceased the opportunities presented by the COVID-19 crisis. The e-commerce operator has been promoting its ‘cashless’ payments and ‘contactless’ delivery of prepaid packages to curb COVID-19.

The innovation entails taking measures that keep its customers, delivery agents and partners safe by leveraging on JumiaPay payment platform, which allows consumers to make prepaid payments for products online and get them delivered without a direct body contact or cash exchange with the delivery agents.

“The health and safety of our customers and delivery agents are our absolute priority. We are uniquely positioned to step up and be part of Africa’s response strategy in this challenging time.

“We have implemented a “contactless” delivery option, which eliminates any possibility of physical contact. Convenience, social distancing and cashless measures are woven into one solution to combat the situation,” CEO of Jumia Nigeria, Massimiliano Spalazzi, said.

Operators in other segments of the services industry including advertising, banking, insurance, telecommunications and aviation, among others, are also mapping out strategies to stay afloat post COVID-19. But the coming weeks, perhaps months, will determine whether or not such measures will guarantee their survival.

 

Coronavirus (COVID-19) pandemic continues to impact the global aviation arena with its debilitating economic effects. The effects, among others, include flight suspensions, airports closure, grounding of aircraft/redundancies and huge loss of revenue to airlines, ground handling firms, JET-A1 suppliers and other service providers. With over 25 million jobs under threat globally, airlines and Original Equipment Manufacturers (OEM) are evolving a raft of measures, including pay/job cuts, to navigate around the unprecedented crisis, KELVIN OSA-OKUNBOR reports.

 

The survival of global air transportation is precariously hanging in the balance. No thanks to the devastating effects of COVID-19, which continues to claim thousands of lives across the globe.

Airlines across the world are in  dire straits with challenges ranging from liquidity crisis to job insecurity with over 25 million people directly and indirectly dependent on  aviation, including others in tourism and the hospitality sectors.

The International Air Transport Association (IATA) says the  industry is in the throes of an unprecedented crisis. It’s Director-General/CEO, Alexandre de Juniac, says airlines are facing the most critical period in the history of commercial aviation.

In the last few weeks, global aviation has witnessed distortions  occasioned by the continuous spread of COVID-19, manifesting in  travel ban, flight restrictions, closed airspace and airports, among strategies designed as containment measures rolled out by countries to arrest further spread of the virus.

According to experts, the aviation sector is worse hit by COVID-19 as the movement of passengers and commercial cargo has been halted because of travel restrictions imposed by many countries across the continents.

The effect is that airlines, airport authorities, ground handling companies, aviation fuel suppliers, airline caters/suppliers and others in the value chain  have been hard hit.

As a fallout, many airlines have initiated a string of measures to get over the effects of the pandemic on global air travel in the face of dwindling revenue.

 

Global job loss

As a consequence, international airlines have started reacting to the negative economic impact. Reports indicate that Virgin Atlantic has fired more than 3,000 workers, including 600 pilots. Finnair returned 12 planes and laid off 2,400. Ryanair also grounded 113 planes and got rid of 9,00 pilots with indications that over 450 would be sacked in the coming months, while Norwegian stopped its long-haul operations and the Boeing 787s it earlier leased have been returned to the lessors.

In the same vein, SAS returned 14 planes and fired 520 pilots.

Also, Etihad Airways has cancelled 18 orders for Airbus 350, grounded 10 Airbus 380 and 10 Boeing 787 in addition to laying off 720 staff members.

Emirates has grounded 38 Airbus 380. It has also cancelled all orders for the Boeing 777x , which is 150 aircraft, the largest order for this type. The airline said about 56 members of the workforce may retire. Also Wizzair returned 32 Airbus A320s and laid off 1,200 people, including 200 pilots with another wave of 430 layoffs, planned in the coming months with the remaining employees seeing their wages reduced by 30 per cent.

Eurowings has gone into bankruptcy and Brussels Airline has reduced its fleet by 50 per cent. German mega carrier, Lufthansa said it plans to ground 72 aircraft in two installments, while Hop is studying the possibility of reducing fleet and staff by 50 per cent.

Reports also indicated that there are 60 new aircraft stored at Airbus with no buyers in sight, including 18 Airbus 350.

Industry insiders project that there would be a minimum of 8,000 grounded planes by September. With an average of 5.8 crews per plane, medium and long haul combined would result in more than 90,000 pilots unemployed.

Elsewhere, Qantas has put 20,000 staff on leave, while Air Canada has done the same for about 15,200 employees. Norwegian Air said it could run out of cash by mid-May. At American Airlines, about 4,800 pilots have agreed to take short-term leave on reduced pay and more than 700 are taking early retirement.

 

British Airways to axe 12,000

British Airways on its part is set to cut up to 12,000 jobs from its 42,000-strong workforce due to a collapse in business because of the coronavirus pandemic.

The airline’s parent company, IAG, said it needed to impose a “restructuring and redundancy programme” until demand for air travel returns to 2019 levels. IAG also owns Spanish airline Iberia and Ireland’s Aer Lingus.

The company said it would take several years for air travel to return to pre-virus levels, a warning that has been echoed by airlines across the world.

BA Chief Executive Alex Cruz wrote in a letter to staff members: “In the last few weeks, the outlook for the aviation industry has worsened further and we must take action now. We are a strong, well-managed business that has faced, and overcome, many crises in our hundred-year history.”

About 4,500 pilots and 16,000 cabin crew work for BA.

 

Original Equipment Manufacturer too

The effect of the pandemic coursed through the travel industry forcing equipment manufacturers, including the Boeing Company, to axe jobs.

Boeing plans to cut 10 per cent of its workforce and reduce its plane production rates as it braces for years-long industry recovery from the aviation crisis induced by the coronavirus pandemic.

The aerospace company said that the staff reductions will include voluntary layoffs (VLO), natural turnover and involuntary cuts as necessary.

“We’ll have to make even deeper reductions in areas that are most exposed to the condition of our commercial customers – more than 15 per cent  across our commercial airplanes and services businesses, as well as our corporate functions,” Boeing President/Chief Executive Officer (CEO) Dave Calhoun said in a letter to employees. “The aviation industry will take years to return to the levels of traffic we saw just a few months ago.”

Calhoun added the demand for commercial airline travel has fallen off a cliff, with U.S. passenger volumes down more than 95 per cent compared to last year. Globally, commercial airline revenue is expected to drop by $314 billion this year, according to Boeing.

As a result, airlines are delaying purchases for new jets, putting the brakes on delivery schedules and deferring elective maintenance.

“We’re also seeing a dramatic impact on our commercial services business, as grounded airline fleets decrease the demand for our offerings,” said Calhoun.

“We will have to reduce commercial airplane production rates. The sharp reduction in demand for our products and services over the next several years simply won’t support the higher levels of output.”

The workforce and jet production reduction announcement comes as Boeing posted an adjusted first-quarter loss of $1.70 billion, or $1.70 per share, compared with a profit of $1.99 billion, or $3.16 per share, a year earlier.

The coronavirus pandemic has put pressure on Boeing’s cash flow. The company has taken steps to preserve liquidity by reducing operating costs and discretionary spending, suspending dividend payments and stock buybacks, and by cutting or deferring the research and development and capital expenditures. In addition, Boeing is exploring potential government funding options.

 

Nigerian experience

With Nigerian airports remaining closed for scheduled commercial flights, except Lagos and Abuja, where evacuation and essentials are permitted, huge aircraft maintenance costs have piled for over 125 airplanes parked at the air side. Some of the aircraft, experts say, would have attained their flight cycles for periodic and routine maintenance, which the carriers could ill-afford.

They say airlines are not the only losers, others which depend on the movement of aircraft from one location to the other, such as car hire operators, travel agencies, bureau de change operators, airport shops and restaurants, ground handling companies remain “infected ” in the value chain.

Not left out in the in economic “infection” are aeronautical and regulatory agencies – Federal Airports Authority of Nigeria (FAAN), Nigerian Airspace Management Agency (NAMA) and Nigerian Civil Aviation Authority (NCAA).

The agencies have lost billions in revenue.

Revenue tied to flights include landing and parking fees for aircraft, ground rent,  passenger service charge, ticket/cargo sales charge, terminal/en route navigational charges among others.

Besides government agencies/concessionaires who operate at airports have also been hard hit. Job losses loom in the sector.

 

Arik Air example

Flag carrier, Arik Air last week took  drastic measures as it announced 80 per cent cut in the salaries of  workers for last month.

Its Managing Director, Captain Roy Ilegbodun, made this in a message to workers.

The decision to cut salaries, the Arik Air chief said,  was a fall out of careful deliberation and analysis by the management  for last month.

Since last week  about 90 per cent of  its staff members have already  proceeded on leave without pay.

The Arik Air boss said:  “While we are not unaware of the challenges that each and every one of us may face during this difficult period, we join you in remaining hopeful that this ugly situation will abate in the shortest possible time and our organisation will come out stronger in the long run.

“We are confident that the steps we are taking now are in the best interest of all and will see us through this difficult epoch in the history of mankind.

“To date,  the situation created by the COVID-19 pandemic remains dire with a high level of uncertainty, even within medical circles regarding the containment of the pandemic.

“Our situation in Nigeria appears to be getting worse.With the trend of events, it is prudent to lean on the assumption that the situation is likely to persist for a while longer.

“Of huge significance to us is that we have suffered a sharp decline of over 98 per cent in our revenue streams since the suspension of our scheduled flights almost four weeks ago.

 

Lamentations from FAAN

The crisis triggered by COVID-19 is yet to abate. The Management of the Federal Airports Authority of Nigeria (FAAN) last week expressed worry over the dwindling revenue of the agency following the continued lockdown due to the  pandemic.

Company Secretary and Legal Adviser, FAAN, Dr. Clifford Omozeghian,  made this known at the Murtala Muhammed Airport, Ikeja.

He said the FAAN Management would liaise with the Federal Government to see how the issue of revenue generation would be addressed to meet up with airport infrastructure challenge.

He  said  only last month’s salary  of FAAN workers had been  paid in response to   the Federal Government’s directive.

He said: “Revenue for FAAN has dwindled drastically, management will liaise with the Federal Government to see how this issue of revenue generation would be taken care of because it may be difficult to pay salaries but I know that with federal government on our side, certain measures will be put in place.’’

Omozeghian said  the pandemic has already triggered a global economic recession, which has also affected FAAN with a dip in  its revenue generation.

He expressed optimism that the present situation would be  addressed so that FAAN would not have issues with the payment of salaries as well as how to  take care of very critical projects that are essential in the industry.

 

Shareholders of Access Bank Plc have approved payment of a total dividend of N23.1 billion as cash payouts for the 2019 business year amid commendations for the impressive performance of the bank.

At the 31st annual general meeting (AGM) of Access Bank in Lagos, shareholders applauded the board of directors, management and staff of the bank for the impressive performance in the 2019 financial year. The meeting, which was held by proxy due to the COVID-19 pandemic, had three leaders of various shareholders’ association present.

Shareholders approved payment of N14.22 billion as final dividend for the 2019 business year in addition to interim dividend of N8.89 billion earlier paid by the bank, bringing total dividend for the year to N23.11 billion.

With this, shareholders will receive a final dividend of 40 kobo per share in addition to interim dividend of 25 kobo per share, representing a total dividend per share of 65 kobo. The dividend per share of 65 kobo represents an increase of 30 per cent on total dividend of 50 kobo per share paid for the 2018 business year.

Key extracts of the audited report and accounts for the year ended December 31, 2019 showed that the top-line rose by 26.1 per cent while pre-tax profit rose by 11.8 per cent. The top-line performance was driven by a leap of 40.9 per cent in the bank’s core banking interest income.

Gross earnings rose to N666.75 billion in 2019 as against N528.74 billion recorded in 2018. Profit before tax increased from N103.2 billion in 2018 to N115.4 billion in 2019. Profit after tax improved from N94.9 billion to N97.5 billion.

The balance sheet showed a stronger market share as customers’ deposits rose by 65.9 per cent from N2.56 trillion to N4.26 trillion. Total assets jumped from N4.95 trillion in 2018 to N7.15 trillion in 2019. Shareholders’ funds also increased from N482.64 billion to N601.66 billion.

Sir Sunny Nwosu of Independent Shareholders Association of Nigeria (ISAN), Mr. Owolabi Peters of Integrated Shareholders Association of Nigeria and Mrs. Bisi Bakare of Pragmatic Shareholders Association of Nigeria agreed that despite the challenging operating environment,  Access Bank recorded improved results and also rewarded shareholders with good a dividend that is very timely given the difficulties created by the COVID-19 pandemic.

Nwosu said Access Bank had a good foresight by merging with defunct Diamond Bank Plc, noting that the professional and seamless manner with which the integration was done should be commended.

According to him, the future remains very bright for all shareholders considering the synergy the merger has brought to the bank and the expertise the management and staff continued to deploy to ensure Access Bank maintains a leading role in the retail banking space.

Nwosu also commended the leading roles being played by Access Bank in the private-sector led Coalition Against COVID-19 (CACOVID), which is supporting the Federal Government to fight the pandemic.

Bakare noted that unlike some of its competitors, Access Bank has recorded  increased profits  in the past three years noting that shareholders have confidence in  the board and management to continue to deliver improved performance going forward.

Group Managing Director, Access Bank Plc, Dr. Herbert Wigwe, said the strength of the bank’s performance reflected a growing franchise supported by digital capabilities and improving customer service touchpoints.

He noted that the bank’s retail business gained momentum, leveraging opportunities in key sectors to consolidate market share dominance through its digital loans while the wholesale business also continued to soar in the year, following intense marketing drive and continued investment in the sector to deliver stronger synergies.

Wigwe said the merger with Diamond Bank produced a truly diversified institution with remarkable retail presence and solid wholesale market share.

“This has propelled us towards achieving our five- year strategic objectives to create the largest bank in Nigeria by total assets as well as largest in Africa by customer base with over 36 million unique customers across the network.

Using an agile approach and with strong dedication, we  have achieved a significant milestone in financial services on the continent whilst delivering the fastest and most seamless customer Day 1 integration globally,” Wigwe said.

According to him, with the emergence of the new entity, the bank is well- positioned to cater to the retail business through a broader reach and product offerings tailored to individual customer needs and delivered efficiently.

“Access Bank is now a tier one retail banking franchise with strong digital payments capabilities and benefiting from a diversified business mix,” Wigwe said.

He said the bank was already addressing the issue high operating expenses and taking drastic  measures to ensure that expenses are reduced significantly, adding the effect would be felt mostly in the second, third and final quarter of 2020.

On how the bank is running its business in the COVID-19 period, Wigwe assured that the bank has put in place a robust business continuity process enough to sustain the bank’s performance going forward.

“Access Bank was well prepared for the COVID-19 early enough and created ways of working from home and working with our customers. We   set up links with our customers and many ways of reaching out to our customers three or four times in a day.

This happened even before we started working with the larger society and enabled us to start fighting this pandemic. So Access Bank has put a system in place and now working with CACOVID to make sure that everyone knows what he is doing,” Wigwe said.