The Nation Newspaper

Category: Issues

  • Powering cars with natural gas

    Powering cars with natural gas

    The total deregulation of the downstream oil sector has attracted mixed reactions from the populace because of the place of petrol in the movement of goods and services across the country. The Federal Government has however promised to reduce the impact of uncontrolled fuel price by encouraging the use of compressed natural gas (CNG), LUCAS AJANAKU writes of the prospects of the new line of thinking.

     

    FOR long, successive administrations could not summon the courage to completely deregulate the downstream oil sector. Nigeria, the sixth largest oil producer in the Organisation of Petroleum Exporting Countries (OPEC), depends almost entirely on imported petrol to run the engine of its economy. Fuel importation of course comes with its price in form of subsidy which became a cesspit of corruption and rent-seeking.

    The Petroleum Products Pricing Regulatory Agency (PPPRA), an agency created to monitor the downstream oil sector, especially petrol, said the Federal Government spent N8.94 trillion on oil subsidy between 2006 and 2015.

    According to a document it released on subsidy payment in Abuja, the subsidy was paid to oil marketers and the Nigerian National Petroleum Corporation (NNPC) during the period under review.

    A break down of the money indicated that in 2006 N257.36 billion was paid; in 2007, N271.51 billion while in 2008, N630.57 billion was paid to marketers.

    “Also, oil marketers in 2009 were paid N409.31 billion and N667.08 billion in 2010 respectively as subsidy claims,” it said.

    The document further revealed that in the year 2011, the Federal Government paid a N2,105.92 trillion an increase of N1,437.84 trillion from 2010 payment. The PPPRA in the document noted that in 2012, N1.35 trillion was paid as subsidy, the highest in the period under review.

    “A total of N 1,316.63 trillion in 2013, N1,217.35 trillion in 2014 and N653.51 billion in 2015 was paid as subsidy claims,” it added.

    The NNPC, since 2016 had been the sole importer of the product to the country and promised to release cash paid on subsidy before the deregulation of the downstream oil sector.

    The administration of former President Olusegun Obasanjo deregulated the markets of automotive gas oil (AGO) or diesel and dual purpose kerosene (DPK) but could not deregulate that of petrol. Former Group Managing Director of the NNPC Funsho Kupolokun, and Finance Minister Ngozi Okonjo-Iweala said oil majors would be mandated to refine 50 per cent of their crude oil in-country to stop the foreign exchange (forex) haemorrhage but could not implement the policy.

    This year, the pump price of petrol has been tinkered with about four times. It was N125 per litre in March, N123.50per litre in April, N121.50 per litre in June and between N140.80 and N143.80 in July before it was deregulated.

    Already, the organised labour has given the Federal Government notice to go on strike should it fail to rescind its decision of petrol pump price and electricity tariff hike.

    CNG option

    The Federal Government said it was going to encourage the use of Compressed Natural Gas (CNG) in the country because it is cost-effective.

    Minister of State for Petroleum Resources Timipre Sylva, who dropped the hint in Abuja, said: “To give it (deregulation) a human face, we are introducing an alternative fuel. We are giving autogas. Gas will now become fuel for our cars. This programme will be rolled out within the next month. So, if you go to a filling station and you convert your car to dual capability or dual fuel, then you drive into a typical filling station, you will find gas LPG (Liquified Petroleum Gas), you find CNG and LNG (Liquified Natural Gas) being sold.

    “So, if you look at the price of PMS versus the price of gas and you think that gas is cheaper which, of course, it is going to be. Gas will even be cheaper than PMS as it is today. So you see that we are also giving an alternative to ordinary Nigerians.’’

    To realise this, it was gathered that the Department of Petroleum Resources (DPR) had ordered about 9,000 filling stations across the country to start the installation of facilities for gas products. The move is expected to improve the utilisation of LPG, CNG, LNG, and Autogas as an alternative fuel for Nigerians.

    According to online knowledge bank, Wikipedia, CNG (methane stored at high pressure) is a fuel that can be used in place of gasoline, diesel fuel and liquefied petroleum gas (LPG).

    “CNG combustion produces fewer undesirable gases than the aforementioned fuels. In comparison to other fuels, natural gas poses less of a threat in the event of a spill, because it is lighter than air and disperses quickly when released. Biomethane — refined biogas from anaerobic digestion or landfills — can be used.

    “CNG is made by compressing natural gas, which is mainly composed of methane (CH4), to less than one per cent of the volume it occupies at standard atmospheric pressure. It is stored and distributed in hard containers at a pressure of 20–25 MPa (2,900–3,600 psi), usually in cylindrical or spherical shapes.

    “CNG is used in traditional gasoline/internal combustion engine automobiles that have been modified or in vehicles specifically manufactured for CNG use, either alone (dedicated), with a segregated gasoline system to extend range (dual fuel) or in conjunction with another fuel such as diesel (bi-fuel),” it explained.

    Natural gas vehicles are increasingly being used in Iran, Pakistan, the Asia-Pacific region, Indian capital of Delhi, and other large cities such as Ahmedabad, Mumbai, Pune, Kolkata—as well as cities such as Lucknow, Kanpur, Varanasi, and others. Its use is also increasing in South America, Europe and North America because of rising gasoline prices.

    In response to high fuel prices and environmental concerns, CNG is starting to be used also in tuk-tuk, pick-up trucks, transit and school buses, and trains.

    Experts say the use of alternative to fossil fuel guarantees increased energy security. According to fueleconomy.gov, natural gas is a domestically-available fuel; enhances public health and environment protection as it has between 60 per cent and 90 per cent less smog-producing pollutants and between 30 per cent and 40 per cent less greenhouse gas emissions.

    Challenges

    A study by Washington Metropolitan Area Transit Authority titled: Compressed Natural Gas Transit Bus Evaluation, the use of natural gas to power automotives faces challenges such as vehicle prices. Natural gas vehicles cost more because of onboard fuel storage and engine modifications.

    Another challenge is fuel availability. Refueling is certainly going to be less readily available outside major cities such as Lagos, Port Harcourt, Abuja and others.

    There is also limited availability of original equipment manufacturer (OEM0 engines and vehicles. But by far, the greatest challenge that Nigeria may yet face is the cost of conversion. Wikipedia said the cost and placement of fuel storage containers is the major barrier to wider/quicker adoption of CNG as a fuel. It is also why municipal government, public transportation vehicles were the most visible early adopters of it, as they can more quickly amortise the money invested in the new (and usually cheaper) fuel. In spite of these circumstances, the number of vehicles in the world using CNG has grown steadily (30 per cent per year). Now, as a result of the industry’s steady growth, the cost of such fuel storage cylinders has been brought down to a much more acceptable level. Especially for the CNG Type 1 and Type 2 cylinders, many countries are able to make reliable and cost effective cylinders for conversion need.

  • Wealthy Africans, how valuable is your passport?

    Wealthy Africans, how valuable is your passport?

    Is your passport holding you back? The luxury of holding a second passport is fast becoming a necessity amongst High Net Worth Individuals (HNWI). The demand for citizenship by Investment programmes has grown increasingly in recent years amongst wealthy Africans looking to expand their opportunities and global reach.

    There is a lot to consider when evaluating your investor visa options and there is no “one size fits all” approach. The cost of such programmes can range from just over $100,000 to a few million dollars, so it’s imperative investors make the right decision. Simple but ineffective

    Whilst every country’s passport comes with its own visa-free travel list, a simple measure of how many countries it grants access to does not tell the full story. The “quality” of those countries matter. Access to France, for example, is more important than Kiribati in most people’s view.

    While “quality” is important when making an investment decision on a second passport, combination and fit with your current passport also matters. It’s what that second passport adds in terms of additional country access that gives you the value and return for your investment.

    What is the real value?

    La Vida Golden Visas, a private consultancy firm, headquartered in London, have developed a unique Passport Value Report that goes beyond simply counting visa-free countries. It helps prospective investors to see not only the true value of their existing passport but critically the incremental value of the second passport to consider as an investment. This is done through a combined measure of GDP (“wealth access”) and visitors (travel popularity) of the countries added through such investment in a second citizenship.

    The problem for Nigeria and South Africa

    Take the Nigerian passport as an example. Nigerian citizens have visa-free access to 54 destinations. That’s a modest 23.8% of the 227 countries and territories worldwide. It’s one of the lowest ranking passports among many of its West African neighbours, with Ghana at 73, Cameroon at 61 and Cote d’ Ivoire at 67. But the story does not end there. Nigeria’s visa-free list mainly consists of other African countries.

    It does not include destinations such as Europe, the USA, China, or the UK. Places where many Nigerians may strive to do business or visit for leisure. The shocking reality is that the visa-free countries Nigerians have access to equate to just 2.1% of the world’s GDP and 3.1% of the world’s international travel popularity.

    South African passport holders do slightly better. They gain access to a higher number of visa-free destinations at 112. Nearly 50% of the world perhaps? But let’s not get too carried away. In terms of “quality” this still only represents 20.2% of the world’s GDP and likewise misses out on visa free access to most of Europe, the UK,
    USA and China.

    How to fix the Problem

    La Vida offers eight-second citizenship by investment programmes but one of our most popular solutions amongst our African investors is that of Grenada, in the Caribbean. Citizenship by Investment in Grenada is a fast, efficient and straightforward process, taking as little as 60-90 days to process. Grenadian citizenship provides many benefits, including visa-free travel to over 140 countries, no tax on worldwide income and no wealth, gift, inheritance or capital gains tax.

    There is no interview, education, language test or management experience required, and dual citizenship is permitted. The entire process can be completed remotely.

    Importantly, Grenada is also an E-2 visa treaty country with the USA, meaning approved E-2 visa applicants are eligible to start a business and live in the USA with their family. The processing time for the E-2 visa is usually only two months.

    What value does Grenada add?

    Pair a Grenadian and Nigerian passport and the world begins to open up. You gain access to 163 destinations worldwide, which includes the UK, EU Schengen zone, China, and Russia. Now you have visa-free access to 58.7% of the world’s GDP, a huge improvement on the 2.1% that a standalone Nigerian Passport offers. Pair Grenada with South Africa and access to the world’s wealth climbs from 20.2% to 60.2%. Arguably increasing opportunity three-fold.

    According to Paul Williams, CEO of La Vida, ‘’Grenada is an effective solution for many nationalities. Almost all our African investors applying for Grenadian Citizenship have chosen the real estate investment route. With no need to visit Grenada during the application process, minimal processing fees, and no physical residency requirement, investors are finding this a very appealing option.”

    Real Estate and Kimpton Kawana Bay

    La Vida offers a selection of Government approved real estate projects, but there has been one clear choice for most of our applicants which is the popular Kimpton Kawana Bay resort.

    Ideally located on the world-famous Grand Anse beach, with magnificent views over the Caribbean Sea, the Kimpton Kawana Bay resort is the newest 5-Star luxury resort in Grenada. Currently under advanced construction and set for practical completion mid-2021, the resort will be run by the boutique operator Kimpton®Hotels & Restaurants, part of IHG (Intercontinental Hotels Group), one of the world’s largest hotel chains. The freehold condominiums are priced from US$220,000, comprising of one-bedroom suites and studios and include up to two weeks free usage per year. In addition, your property is put into the hotel rental pool, earning an annual return on your behalf via Kimpton. Investors can also disinvest after five years and recoup their initial property investment.

    Tom Scott, Managing Director of Kimpton Kawana Bay, recently stated, ‘’In 2019, 54% of all CBI real estate applications in Grenada were for Kimpton Kawana Bay, illustrating the confidence investors have in our project. We have seen a continued high level of sales in 2020, especially from our Nigerian clients”.

    Aside from the investment, Grenada enjoys a growing economy and stable democracy. Its citizens have access to top schools including 90% tuition fee discounts at Grenada’s, St. George’s University, the world’s largest offshore American accredited medical school. This has been another attractive feature of the countries Citizenship by investment programme.

    Grenada Citizenship by Real Estate Investment Highlights:
    ● Gain a second passport and visa-free travel;
    ● Own high quality, five-star, deeded freehold real estate;
    ● Owners receive two weeks of personal usage each year;
    ● Owners will receive a share of hotel revenue;
    ● Gain access to St. George’s Medical School;
    ● Gain access to the USA’s E-2 visa programme;
    ● Prices start from $220,000 plus application fees.

  • Options for indigenous carriers’ survival

    Options for indigenous carriers’ survival

    More than two months after domestic flights resumed, operators are still counting losses in billions of Naira, following reduced passenger traffic caused by COVID-19 shocks. Indigenous carriers have also scaled down flight rotations on some routes, as well as other cost-saving measures to keep their operations running. To reverse the trend, experts say a rejig of operational models in favour of equipment suitability and expansion into cargo and courier business can create new revenue streams to survive the hard times. KELVIN OSA-OKUNBOR reports.

    These are trying times for players in the global air transport industry, including Nigerian carriers. From airlines, aircraft manufacturers, ground handling firms, airport authorities, air navigation services providers, aircraft lessors, maintenance repair organisations and other players in the aeronautical value chain, it’s been a tale of woes since the outbreak of the Corona virus disease (COVID-19).

    From restriction of flights, lockdowns, closure of airspace and other continent-wide strategies put in place to contain the spread of the virus, the global economy has been brought to knees. According to the International Air Transport Association (IATA), carriers, including Nigerian airlines, lost an estimated $113 billion to the crisis.

    IATA’s  Director-General and Chief Executive Officer, Mr Alexandre Juniac, said it would take a longer time for the sector to recover.

    The Nigerian Civil Aviation Authority (NCAA) painted a clearer picture of the impact of the pandemic on Nigerian carriers.

    Its Director-General, Captain Musa Nuhu, said indigenous carriers needed to  create new businesses to keep afloat. According to the industry regulator, many carriers are yet to recover from the pangs of the deadly virus, which affected their revenue from passenger operations.

    The crisis, the NCAA added, also forced many airlines to retire some aircraft, send workers on furlough, and suspend operations on some routes. Many of them are also unable to meet obligations to agencies, catering firms, fuel suppliers, insurance firms as well as financial institutions.

    However, since July 8, when domestic flights resumed, carriers, including Aero Contractors, Arik Air, Air Peace, Overland Airways, AZMAN Air, Max Air, Dana Air and Ibom Air, have continued to experience dip in passenger traffic, which is dealing a blow to their operations.

    Reduced passenger traffic, investigations by The Nation show, remains a major headache for the airlines, with experts expressing worries that early recovery might remain elusive because of the poor purchasing power of Nigerians.

    To drive the sustainability of local airline businesses, experts said they must be more strategic by deploying suitable equipment on major routes to get round the lower passenger traffic.

    They noted that despite that COVID-19 continues to threaten the survival of airline business in Nigeria, the few carriers with the right capacity to play actively locally and internationally with the right mix of aircraft would ride the storm.

    For instance, the Group Managing Director, Nigerian Aviation Handling Company (NAHCO) Plc, Mrs. Adenike Tokunbo Fagbemi, said airlines with the right mix of fleet could expand beyond passenger operations and break frontiers in the cargo and courier value chain to survive revenue shortfall occasioned by the pandemic.

    She said besides seeking stimulus packages from the government, airlines, which would have mitigated the losses incurred during the pandemic, could design operational models that allow them to use their aircraft to ferry cargo on major routes to keep afloat.

    Mrs. Fagbemi said if there was right pricing of such services, airlines could leverage such to recover from loss of revenue that would have accrued from passenger operations.

    She, however, said the government had a huge role to play in driving the sector towards sustainability by providing financial palliatives for airlines and other players.

    “Palliatives are a way to help airlines recover,” she said.

    She also said despite the challenges COVID-19 posed for the sector, it had also create opportunities for airlines to deploy appropriate pricing for air fares to drive sustainability.

    Noting the need for smart airlines to adopt yield management system in their route planning and fare structure to maximise passenger capacity on their airplanes, she urged airlines to diversify into cargo operations, which could yield significant revenue if they rendered time-sensitive services.

    Apart from the delivery of time-sensitive services, Mrs. Fagbemi said lower charges and fares for cargo would increase the revenue net of carriers which were yet to tap into limitless opportunities in cargo business.

    Her words: “Though coronavirus has created distortions in the aviation sector, it also could bring in its wake windows of opportunity. This is the time for airlines and ground handling companies to think innovatively.

    “Significantly, airline business could be profitable if managers adopt appropriate pricing of fares to achieve yield management. This will assist the airlines to handle the fare structure of passengers in the aircraft and how to run profitably.

    “Airlines could delve into cargo business within the country at reduced prices to attract ferrying of goods. But the service must be time sensitive. If cargo arrives in good time, it could trigger patronage by people who had hitherto considered air travel and cargo elitist.”

    A United States Federal Aviation Administration (FAA)-licensed flight dispatcher, Mrs. Victoria Adegbe, said airlines could convert their passenger aircraft for cargo and courier operations to earn additional revenues post-COVID-19.

    Citing Air Peace, which has various aircraft in its fleet, she said such a carrier should use its equipment profile to navigate the challenging times by deploying its Boeing aircraft on busy routes when passenger traffic is heavy, but deploy its Embraer Regional Jets on not very busy routes where passenger traffic drops.

    Mrs. Adegbe said the COVID-19 pandemic has called to task the planning capacity of many indigenous carriers. It has also created new revenue earning opportunities if owners and managers could explore new areas of business such as cargo.

    She said though the government has a duty to assist local carriers with stimulus packages as other countries have done, operators should use the challenges thrown up by COVID-19 to examine new frontiers for survival.

    Mrs. Adegbe said: “As governments look to stimulus measures, the airline industry will need consideration for relief on taxes and lower charges. These are extraordinary times. Airlines are cutting capacity and laying off staff or asking them to take unpaid leave. This is the time for government to consider assisting local carriers in any way it considers relevant.”

    She said a carrier such as Air Peace, which operates on domestic, regional and intercontinental routes, could deploy the various aircraft in its fleet to consolidate cargo and courier operations.

    “There is apathy globally in the air transport sector because of COVID-19. Only carriers with the right mix of aircraft such as Air Peace, which has acquired more Boeing 777 aircraft for its international operations and its Embraer jets for local and regional operations, seems prepared for the task ahead.

    “That is the way to go for Nigeria, to put our carriers on the right path and give us the right representation at this time. All that indigenous carriers need is encouragement and support from government,” Mrs. Adegbe emphasised.

    She said, for instance, that an African carrier, Kenyan Airways, during the pandemic, applied the same model by converting some of its aircraft for passenger operations for ferrying cargo, medical supplies and other logistic engagement.

    The Chairman, Domestic Airport Cargo Agents Association (DACAA), Mr. Monday Subair, also weighed in on the issue. He said indigenous carriers were yet to fully exploit opportunities in the cargo and courier value chain with the possibility of air lifting over 15 tonnes of cargo monthly.

    He said airlines could earn huge revenue from such volumes of cargo if they deployed their aircraft for cargo haulage.

    Subair said with the challenges that the COVID-19 pandemic has thrown up, local carriers could tap into this revenue-earning business by expanding their operations at this time passenger traffic is waning.

    He said: “Airlines should look beyond passenger operations and expand into cargo, which could be a huge revenue earner. Airlines such as Air Peace, which has large aircraft in their fleet, could deploy some of them to service cargo.” The DACAA boss said indigenous carriers with good network of routes in the West African Coast could break new grounds in cargo operations to boost its revenue in Monrovia, Freetown, Accra, Dakar, Banjul and other destinations.

    Such operations, he said, could be extended to Middle East in Sharjah, Dubai, the United Arab Emirates (UAE). The Board of Trustees Chairman, DACAA, Mr. Ikpe Ukana, could not agree less. He said indigenous carriers needed to partner cargo agents to drive sustainability of their business as part of the lessons from COVID-19.

    His words: “Airlines should not depend on passenger operations alone. They should veer into cargo as part of COVID-19 lessons. Airlines need to partner domestic cargo agents to leverage opportunities in the cargo sub sector to keep their business afloat.

    The Head of Strategy, Zenith Travel, Mr.  Olumide Ohunayo, said despite the shocks of the pandemic, some indigenous carriers demonstrated their operational capacity to keep afloat by converting scheduled passenger aircraft for cargo operations.

    Such operations, he said, not only earned revenue for the airlines but also assisted in conveying medical supplies during the crisis.

    Ohunayo, who is an aviation analyst, said as part of strategy to keep afloat, carriers should begin to improve their systems and processes and look beyond passenger operations and point-to-point destination to drive capacity.

  • Forces against transition to digital economy

    Forces against transition to digital economy

    Globally, technological advancement has caught on like wildfire. In fact, experts predict that, by the end of this year, one million new devices will come online every hour. Nigeria is determined not to be left behind in the digitalisation race. This was why the Federal Government unveiled a new broadband plan and a digital economy blueprint. However, there are fears that without diligently implementing the plan and fixing existing challenges, the transition to a digital economy may be truncated. Assistant Editor LUCAS AJANAKU reports. 

    If there is any reason to doubt the resilience and capacity of the Information Communication Technology (ICT) sector to displace oil as the economy’s cash cow, the second quarter (Q2) report of the National Bureau of Statistics (NBS) must have erased that.

    According to the statistics agency, the country’s Gross Domestic Product (GDP) dipped by 6.1 per cent (year-on-year) in real terms during the period, largely due to significantly lower levels of both domestic and international economic activities necessitated by nationwide shutdown designed to halt community transmission of COVID-19 pandemic.

    The non-oil sector contributed 91.07 per cent as against the 8.93 per cent contributed to total real GDP by the oil sector, while the ICT sector contributed 17.83 per cent to the total real GDP, 54 per cent higher than its contribution a year earlier and in the preceding quarter, in which it accounted for 14.07 per cent.

    According to Cisco’s Digital Readiness Index Report, countries with the lowest digital readiness scores are primarily in Africa. They are countries such as Nigeria, Liberia, and Chad, and some in Asia, such as Cambodia. Yet, digitilisation will enable countries to maintain global competitiveness, increase GDP, foster innovation, and create new jobs.

    The impact of these is not completely lost on stakeholders in the industry, which was why the Federal Government launched the National Digital Economy Policy and Strategy (NDEPS) and the National Broadband Plan (NBP) which it hoped would provide the compass and fuel the nation’s digital aspirations.

    The Minister of Communication and Digital Economy, Dr. Isa Pantami, espoused the direction of the government when he said: “The strategic policy directions of the Federal Government include the inclusion of Digital Economy in the mandate of the ministry, the unveiling and implementation of the NDEPS and the National Broadband Plan, among others.

    “The GDP Report has shown how critical the ICT sector is to the growth of our country’s digital economy and, by extension, the general economy,” Pantami said.

    To sustain the gains, infrastructure, which is the foundation for digital connections and activities, is critical.

    It was on the realisation of the tremendous economic growth opportunities afforded by the deployment of broadband technologies, that the first NBP was launched in 2013 for a period of five years. The plan set out to achieve broadband access, defined as minimum download speeds of 1.5 megabytes per second (Mbps) with at least 30 per cent coverage. It also had the objective of achieving 3G coverage to at least 80 per cent of the population.

    But given the state of technology, development and applications of broadband technology, the 30 per cent penetration achievement fell short of the aspiration of the country, as the developed world marches towards widespread deployment of 5G technologies, while the Nigeria is yet to achieve significant 4G coverage and adoption.

    Pantami said as at last month, however, the broadband penetration stood at 42.02 per cent, translating to a percentage increase of almost double digits in less than one year. This is another remarkable achievement, he said.

    Realising that without the right level of infrastructure, the country will not be able to advance in its digital journey, a second NBP was launched.

    The new NBP was designed to deliver data download speeds across the country of a minimum 25 Mbps in urban areas, and 10Mbps in rural areas, with effective coverage available to at least 90 per cent of the population by 2025 at a price not more than N390 per 1GB of data (that is, two per cent of median income or one per cent of minimum wage).

    Studies have found a relationship between ICT or network readiness and a country’s GDP. For instance, the Inter-America Development Bank (IDB) found that a 10 per cent increase in broadband penetration in Latin America was associated with a 3.19 per cent increase in GDP and a 2.61 per cent increase in productivity.

     

    Hurdles

    Pursuant to achieving the goals of the NBOP, the CEO, Nigerian Communications Commission (NCC), Prof Garba Danbatta, said six infrastructure providers (InfraCos) have been issued licence, five on the basis of geo-political zoning and one for Lagos.

    He said based on the level of commitment displayed by each InfraCo, about N4 billion has been set aside for them to access as incentives. The InfraCos are expected to provide infrastructure such as fibre optic cables in their coverage areas.

    But a myriad of challenges such as insecurity, naira devaluation, right of way (RoW) palaver, dearth of Foreign Direct Investment (FDI), erratic power supply and many others stand to derail the realisation of the NBP and NDEPS of the government.

    Danbatta also identified underutilisation of the huge terabytes of broadband capacity of submarine cables such as Mainone, Glo 1, West African Cable System (WACS) and NITEL’s Sat 3, lying fallow on the shores of Lagos while the country struggles fruitlessly to achieve last mile deployment.

    President, Association of Telecoms Companies of Nigeria (ATCON), Olusola Teniola, said lack of access to forex was a danger to the sector. According to him, the sector is 100 per cent dependent on forex as essential components are sourced offshore. He appealed to the Central Bank of Nigeria (CBN) to allow telcos to access forex through its NAFEX window.

    The CEO, VDT Communications Limited, Biodun Omoniyi, agrees with Teniola, as he lamented that forex scarcity had already taken a toll on the operators.

    Like the Cisco’s Digital Readiness Index Report, which identified improvements in technology infrastructure, technology adoption, basic human needs, ease of doing business, and human capital development as essential factors to digital economy, Omoniyi urged the Federal Government to put the enabling environment in place to drive affordability and availability.

    He said the ecosystem is like a chain, adding that fibre alone cannot solve the problem as last mile providers needed to be supported financially, too.

    The Chief Executive Officer, Medallion Communications Limited, Mr. Ikechukwu Nnamani, said while states such as Ekiti, Kaduna and others had abided by the Federal Executive Council (FEC) agreement on N145 per linear metre for laying cables on RoW, the challenge of power remained daunting and excruciating.

    Nnamani urged the CBN to allocate 30 per cent of its proposed N15 trillion InfraCo Fund to the development of the telecoms sector while the CEO, Pan African Towers, Wole Abu, said the CBN should not leave the implementation of both the NBP and NDEPS to the NCC and the Communication and Digital Economy Ministry. He sought for a special finance to get these two initiatives working.

    Abayomi Adebanjo of MainOne, also underscored the importance of forex to NBP and NDEPS. He said operators must be given access to forex while loanable funds should be made available at single digit interest rate, arguing that until this was done, old and green projects would remain moribund.

    The Cisco study revealed that different targeted activities, investments, and interventions are needed depending on a country’s stage of digital readiness. It was found that countries beginning their digital journey such as Nigeria (the Activate stage) would primarily benefit from interventions focused on improvements in basic human needs and human capital development, especially growing foundational IT knowledge.

    “A key finding of this study is that human capital development is critical across every stage of digital readiness. Whereas digitisation can accelerate and differentiate a country’s ability to progress, lack of adequate digital skills can limit its potential to digitise and grow economically,” the report said.

  • Airlines as drivers of economic development

    The push for economic development through air transportation is increasingly gathering momentum at domestic, regional and international arenas, with experts saying adequate government support and a raft of intervention measures could reduce attrition rate of indigenous carriers in their roles as enablers and catalysts of economic development, writes KELVIN OSA-OKUNBOR

     

    The relationship between air transportation and economic development is increasingly gaining global traction, robust enough that the International Civil Aviation Organisation (ICAO), International Air Transport Association (IATA) and Airport Council International (ACI) are closing ranks to optimise the benefits of the air transport value chain.

    Significantly, the bodies have continued to roll out measures – in terms of policies, programmes and initiatives – that will not only attract, but sustain and protect investments in airline and allied businesses to keep economies running.

    According to IATA,  aviation remains a key driver of economic development. Over one third of all trade, by value, is sent by air which makes aviation a key component of business worldwide.

    The global body said the aviation industry supports 65.5 million jobs around the world.   Some of these roles are within the industry at airports, for airlines and in civil aerospace and air navigation services, while other jobs are supported by the economic activities that air travel creates.

    Besides, supporting $2.7 trillion of the world’s gross domestic product, air transport facilitates international trade, in particular valuables and perishable goods.

    Experts say the global aviation market is expected to grow significantly in the coming decades. By 2036, the global air transport is forecast to support 97.8 million jobs and will $5.7 trillion to the global economy.

    According to a global fact sheet for 2017  provided by IATA , over 4.1 billion passengers were carried by airlines in 41.9 million scheduled flights  flown across 7.75 trillion kilometres in 1,303 commercial airlines.

    At a time global carriers are filling in the gap, airlines in Nigeria are grappling to play their role as drivers of economic development.

    Besides Air Peace which currently parades a sizeable fleet of aircraft types – Boeing and Embraer – others are struggling to get their airplanes out of maintenance facility.

    Regrettably, the failure rate of Nigerian carriers in the last decade has called to question the role airlines could play as enablers of economic growth in a country where air transport still holds the key in accelerating the movement of passengers and cargo goods and other allied services.

    Besides Air Peace, which currently has the largest pool of airplanes and scope of operations; it is filling the gap as an economic enabler by providing air link between Nigeria’s commercial hub, Lagos, its political capital , Abuja and other major cities including Port Harcourt, Owerri, Enugu, Calabar, Uyo, Benin, Asaba, Warri, Sokoto, Yola, Kano , Kaduna and other cities it categorised as “under served “  and “unserved.”

    Experts say airlines’ role in the logistic value chain in the movement of passengers,  goods and services across the length and breadth of the country underscores the in  creasing value of air transportation mode.

    Besides, being the fastest and albeit safest mode of transport, airlines create job opportunities for millions of Nigerians in the aviation and allied sectors.

    Towards this end, experts say the health of indigenous carriers is directly proportional to their contributions to economic development.

    Air Peace’s Chief Operating Officer, Mrs Oluwatoyin Olajide, told The Nation that  the carrier in its few years of operation, has bridged the gap in connecting major cities in Nigeria’s air link by providing a window for people and cargo to move seamlessly thereby contributing to the gross domestic product.

    She said airlines remain key drivers in pushing national economic development through their on- time performance services, which has made seamless for organisations and individuals to move from one location to the other in the accomplishment of their corporate responsibilities.

    The airline COO said besides providing a platform for people and goods to move, airlines as key players in the logistic value chain have created job opportunities for many professionals in the aviation and related industry.

    But, experts say if local carriers must play their role as economic enablers, operators must step up on-time departure to reduce frequent incidents of flight delays which impact on the national economy for businessmen and women hoping to meet their schedules and appointment.

    Speaking in an interview in Lagos, Chief Pilot of Air Peace, Captain Victor Egonu, said domestic carriers will continue to contribute their role in national economic development, if government puts in place the right policies that will guarantee the sustenance of such carriers.

    He said domestic carriers,including Air Peace will be excited if the relevant agencies could fix sore points at major airports to reduce the burden of airlines.

    He listed such sore points to include flooded and undulating runways at some airports, night landing facilities at some secondary airports in addition to multiple screening points at airport terminals to improve turnaround time for indigenous carriers.

    He said:. ‘’Any measure or step that could be taken by government to reduce the burden on domestic carriers will put them in a vantage position to contribute significantly to national economic development.

    “It is time government should start considering domestic carriers as partners in progress.

    The whole idea is to empower these carriers so that they could improve their operations both domestically, regionally and intercontinentally in the bid to advance the economic development of the country.”

    In his views, former Secretary General of African Airlines Association (AFRAA), Mr Nick Fadugba said government should design policies that should support local carriers to remain in business and make their lofty contributions to the development of the national economy in the provision of travel services, aviation fuel supply, airline  catering aircraft maintenance and repairs and other support services.

    Also speaking, Executive Chairman of Airline Operators of Nigeria (AON), the umbrella body of indigenous carriers, Captain Nogie Meggison said local airlines would have contributed more to the development of the national economy if they get the support of government.

    He said : “ The operating environment for local carriers is very harsh. Multiple charges and taxes , unpatriotic policies by government, these factors are militating against the potential of Nigerian carriers to contribute significantly to national development. “

    Look at an airline like Air Peace, which in the last five years has taken on many battles and challenges . Such an airline should be supported by government as a strong carrier which is flying the flag of Nigeria in the international scene.

    Government needs protective policies , the way other countries such as United States and the government of the United Arab Emirates are supporting the Gulf Carriers. That is what Nigerian government should do to local airlines.”

    He cited the patriotic services Air Peace carried out a few months ago, when it evacuated over 520 Nigerians trapped in the xenophobic attacks in South Africa.

    Read Also: NCAA moves to prevent new airlines debts

     

    Speaking in an interview, Chairman of Air Peace, Mr Allen Onyema said local airlines need support from government to enable them accelerate the growth of the economy by providing a platform of movement for trade, commerce and industry.

    He said local carriers contributed significantly to the over 14.2 million passengers recorded in Nigeria in 2019. He said the passenger traffic figure compared to 11.2 million flown the previous was enough evidence of the commitment of local operators.

    He said : “ Though the Nigerian Civil Aviation Authority has not released passenger figures for this year, the figures of last year speaks volumes of the exploits of local airlines, including Air Peace, which continue to weather the storm in an unfriendly business environment. “

    He said local carriers could do better if government reviewed sundry charges under the guise of taxes and levies at airports nationwide accounting for over 65 per cent of revenues accruing to airlines.

    The airline boss said : “ What local carriers are asking from government is an enabling environment that will make things work.

    We look forward to a time when the taxes will be streamlined in such a way to help local carriers help the government and help the country by contributing to the national economy and by extension national economic development .”

    Also speaking, Chief Executive Officer, Nigerian College of Aviation Technology (NCAT), Captain Abdulsalami Mohammed said domestic carriers could contribute to economic development if they explore economies of scale, cooperate and forge alliances.

    He said one of the ways they could be stronger as economic enablers is by pooling their expertise and equipment together. Mohammed said: “ Airlines will continue to play greater role in economic development, when the operators evolve sustainable operational plans.”

     

  • FAAN, FCI sign pact on construction of Aviation Expo centre

    Efforts to improve the airport landscape received a boost at the weekend as the Federal Airports Authority of Nigeria (FAAN) signed an agreement with FCI International Limited  to build an Aviation Expo Centre at the Murtala Muhammed International Airport (MMIA), Lagos.

    The Aviation Expo Centre will serve as a venue for major industry events.

    Disclosing this while handing over the letter for the land lease agreement to the Managing Director, FCI International Limited, Mr Fortune Idi,  FAAN’s Managing Director, Captain Hamisu Yadudu, said the facility will serve the needs of the industry.

    Yadudu’s message was conyeyed in a letter conveyed to Idu by the Company Secretary / Legal Adviser as well as Head of Directorate of Legal Services, Mr Clifford Imade Omozeghian.

    The terms of the agreement include  setting up a permanent befitting centre for development and international trade promotion within the corridor of the Murtala Mohammed International Airport called the Nigeria Aviation (NIGAV) Conference and Exhibition Centre.

    The 2500 square kilometer  centre, according to the FAAN boss  is to project the best of Nigeria’s businesses and enterprises as well as stand as a centre for the promotion of industry   excellence.

    The centre  billed to  take off early next year is planned through three development stages as envisioned by Mr. Idu.

    Read Also: FAAN cautions airport users on facilities

    He said : “ The first stage is to develop a 1000 sitter capacity hall that can hold 100 exhibition booths where all kinds of industry activities including open-to-public ceremonies can be held.

    “Then the second stage is to expand by building meeting rooms, cafeteria for workshop and business hub meetings and the third stage will be a multistory facility with aerial hall, underground parking, meeting rooms, recreation and learning facilities.

    “Centres of such at the international airport axis’s   are often considered as investor’s gateway and the foresight to sign this project by the Managing Director of FAAN is in line with the President Buhari’s administration’s mandate of increasing indigenous capacity in creating wealth by opening a platform within the airport corridors where the numerous indigenous produce can be showcased for export market using the air cargo services.

    “Exhibition and conference is a uniting force and it will bring people from all over the world to Nigeria. This of course means greater air traffic flow to Nigeria and with direct impact on the aviation economy and the Nigeria economy too.”

    He described the NIGAV centre as  a win-win for the air transport industry and Nigeria.

    He said : “ It is planned to start hosting events from February 2020 such as the Airport Business Summit and Expo, OPITeX for the oil and gas pipeline expo, NIMPORT, Agro Air Logistics Conference, WedExpo and hopefully the next Nigeria award will be held at the centre in 2020.

     

  • Tackling the menace of bird strikes

    Flying birds ‘interface with aircraft is increasingly becoming a recurring headache for  the global aviation industry. Huge cost borne by airlines to replace  damaged engines and the attendant  effects on  air safety is forcing airport authorities to evolve containment measures,  writes KELVIN OSA OKUNBOR.

    Birds strike is causing incalculable damage to the global air transport industry forcing airlines to incur huge costs in replacing vital parts damaged by flying birds.

    Bird strikes have  become a major threat to air safety globally. Over the years, collision between birds and aircraft has resulted in the death of hundreds of people due to crashes, and have resulted into losses estimated at over  $1.2 billion to the global aviation industry.

    Nigerian carriers are not insulated, as they  continue to grapple with the challenges of bird strikes. In Nigeria,   data from the  Nigerian Civil Aviation Authority (NCAA) indicated that between 2005 and 2010, a total of 209 strike incidents were reported.

    Bird strikes not only lead to carriers losing money, it causes flight delays and disruptions to the operations of airlines.

    As a global challenges, airlines, regulatory bodies and airport authorities are rethinking their strategies on the best containment measures.

    In the United States, about $650 million is lost annually as a result of bird strikes.

    There are bird strikes all over the world, resulting in emergency landings and damaged aircraft. The aviation industry spends a minimum of US$1.2 billion  per year on bird strike damage and delays, according to  John Allan, Head of the National Wildlife Management Center, which is part of the UK Animal Health and Veterinary Laboratories Agency.

    Statistics for bird strikes are murky. In 2012, there were 10,726 wildlife strikes in the U.S., the vast majority of which involved birds, according to the Federal Aviation Administration. The UK Civil Aviation Authority reported 2,215 bird strikes.

    But reporting standards, differ based on  each country’s experience,  according to  Allan, former chairman of the International Bird Strike Committee.

    He is a  specialist in bird strike prevention in  England over the past 25 years. Allan said airlines and airports must work together to keep bird strikes to a minimum.

    Different countries across the globe have mapped out various strategies to keep  birds far from their airports.

    Singapore Changi Airport, for instance , has a 12-member wildlife management team that conducts daily patrols to monitor the movements of birds and other animals. Mynas, sparrows, egrets, crows and kites are common in Singapore.

    Singapore Changi Airport  broadcasts bird distress calls and puts anti-perching devices on railings near  runways and taxiways.

    Managing bird strikes is a never-ending job for  many airports across the world.

    Investigations revealed that Nigerian airlines  lose  over  N20 billion to bird strike annually as the frequency of such incidents  increased over the years without sufficient  efforts to curtail it.

    Some airline operators, who declined to be named said,   bird strikes have become very regular that they have to make provisions for the possibility of changing aircraft engines many times in a year.

    Bird strike incidents usually affect the engines of aircraft, which cost about $1.5 million (N547.5 million) to replace, depending on the type and capacity of the aircraft involved in the incident.

    This is apart from the cost of shipping the engine into the country.

    Read Also: ‘Air transport supports 65.5m jobs, $2.7tr economy’

     

    Between 2016 and 2017, Nigerian airlines experienced  no fewer than 27 bird strike incidents recorded across the country’s airports.

    Statistics obtained from the Nigerian Civil Aviation Authority (NCAA) indicated that airlines encountered 14 bird strikes during take-offs and another 13 on landings, with half of the incidents happening at the Murtala Muhammed International Airport, Lagos.

    In the period under review, Dana Air, Medview, Arik Air aircraft were hit by birds.

    The Nigerian Civil Aviation Regulation 2006/2009 Part 18 Offenses – Paragraph 23 (1), states that an aerodrome operator can be liable to a fine of N2.5 million in case of a bird strike. But  the regulatory agency is yet to sanction the Federal Airports Authority of Nigeria (FAAN) for any bird strike incidents at the nation’s airports.

    An aircraft engineer with the defunct Nigeria Airways, Chris Amokwu blamed  FAAN for the massive losses recorded by the airlines due to bird strike incidents.

    He said : “  FAAN is just looking at the airlines and allowing them to bear the cost alone through their insurance companies. Our approach to the menace has to be forensic because you need to know the kind of birds that are coming around. It is so deep and a lot of people who work in wildlife here just scratch the surface. They are not helping the airlines.“

    In 2017, many Nigerian carriers including Arik Air spent about N3.2 billion to fix its aircraft which recorded 15 incidents of bird strike within twelve months.

    Aero on its part spent over N2.1 billion to fix  its aircraft involved in eight incidents of bird strike within 24 months. Medview experienced three incidents on bird strike forcing it to spent over N1.2 billion on the replacement of its aircraft engines.

    Dana Air , which recorded a single incident of bird strike, spent N547 .5 million to fix its aircraft  engine affected by strike within 12 months.

     

    Intervention

    FAAN said it is responding to the menace of bird strike by putting in place measures to tackle it.

    Investigations revealed that FAAN has observed the presence of various habitat close  to the Lagos Airport where no fewer than 5,000 birds of varying species mill during the day. The birds   rest at night only to cause damage to aircraft when they fly off.

    According to the airport authority, for over 20 years, the birds have bred, hunted and fed in this habitat, multiplying exponentially.

    In  the United States alone, there are over 13,000 bird strikes annually and despite this, they have found a way around the hazard to operate their aircraft.

    Nigeria is not insulated  from bird strike related incidents as between 1990 and 2019, there were  about 700 reported cases  of bird strikes.

    However, FAAN is looking at ways to either eradicate or reduce the threat.

    On assumption of duty about seven months ago,  Managing Director of FAAN ,  Captain  Hamisu Yadudu  had a meeting with the Wildlife Control and Hazard Unit  on how to resolve the problem.

    Yadudu scheduled a meeting with the property owners  around the Lagos Airport  to enable the Wildlife Unit evolve measures to identify the birds.

    Following the intervention, trained ornithologists in the Department of Wildlife Control, were able to identify birds that create  problems for airlines and the things that attract birds to the airport. The team also evolved measures on  how to reduce or disperse birds from the airports, without  hindering  safe  flight operations.

    A  source in FAAN’s Department of Wildlife Control said the agency had embarked on a project, tagged,  Roost Dispersal Operation of Murtala Muhammed Airport, which led to ornithologists discovering and categorizing and dispersing several species of birds at the  airport.

    Investigations revealed that in the last six to eight months, there has not been a reported case of bird strike around the nation’s airports and this is because the authority took time to identify the problem and has done something differently that turned this near-monthly occurrence around to the point of near eradication.

     

  • CIoTA mulls integration of transportation modes

    The President, Chartered Institute of Transport Administration of Nigeria (CIoTA), Dr. Bashir Jamoh, has said that the way to go in seeking solution to the perennial gridlock in the port city of Apapa, Lagos, is to turn to the railway and barges for the movement of containers. This is aside the urgent need for the expansion of the ports, especially as the present Apapa and Tin-Can Island ports have lost spaces where containers would have been, to concessionaires, who are in charge of the terminals.

    Jamoh, who spoke ahead of a planned summit aimed at taking a holistic look at the entire transport value chain in the logistics sector, disclosed that when  to  have rail tracks to move cargo from the ports to the outside would be a paramount discussion at the summit, with emphasis on same in terms of policy, advisory, human capacity, and skill acquisition for the association members across the various agencies in the maritime industry.

    According to him, CIoTA, at its 2019 National Transport Summit,  with the theme: Unlocking the Potentials of Transportation for Sustainable Development, holding from December 3 – 5 at the Musa Yar’Adua Conference Centre, Abuja, pushes for policies to enable seamless integration of the different modes of transportation in the country a focal point. This, he reckons, will ensure that smooth logistics that would help improve cargo movement from the ports to final destinations, are explored and formulated. Besides, it would also create an avenue to address the silo nature of the modes of transportation in the country, which have not been beneficial to the trade supply chain.

    Jamoh, who is also Executive Director, Finance and Administration, Nigerian Maritime Administration and Safety Agency (NIMASA), further explained that the event would also avail the stakeholders in the sector an opportunity to learn how best they can get the needed value in the supply chain, noting that trade is only complete when goods can get to their final destination in efficient manner.

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    “We can see that the challenge has been the non-integrated approach of the various transportation modes, making it difficult for movement of goods from the ports to various locations. We shall be looking at solutions that would integrate the road, rail, air, and water transport systems. We are looking to push for policy to uphold seamless integration of the transport modes to support trade, in terms of easy movement of cargo across locations,” Jamoh said.

    He revealed that the Chairman Presidential Economic Council, Dr. Doyin Salami, will lead other speakers at the event. Other speakers lined up include Director-General of NIMASA, Dr. Dakuku Peterside; Founder, Centre for Value in Leadership, Professor Pat Utomi; Managing Director of Nigerian Ports Authority (NPA), Hadiza Bala-Usman; as well as  retired Merchant Navy Captain, Emmanuel Iheanacho; The Managing Director, Nigerian Railway  Corporation , Fidet Okhiria, Prof. Innocent Ogwude and Chris Asoluka, Chairman Onne Oil and Gass Free Zone.

    President Muhammadu Buhari will be the Special Guest of Honour at the three-day summit.

     

  • Expert to Fed Govt: Ignore AMCON on national carrier

    KELVIN OSA OKUNBOR

    Aviation consultant Mr. Chris Aligbe has called on the Federal Government to ignore the proposal by the Chief Executive Officer (CEO) of Asset Management Corporation of Nigeria (AMCON), Ahmed Kuru, to convert Arik Air and Aero Contractors to national carriers. He urged the Minister of Aviation, Captain Hadi Sirika, to take urgent steps to facilitate the formation of Nigeria Air.

    Aligbe, who spoke in an interview in Lagos on Monday, said there was no going back on achieving a national airline because of booby traps associated with converting the two carriers – Aero and Arik Air – private carriers, into a government airline.

    He said if the two carriers were owned by government , they would have been taken over by the Ministry of Aviation and not AMCON which major brief was to recover debts.

    Aligbe said the option of converting two carriers not doing well into a national carrier  was fraught with lots of challenges, which will serve as disincentive to would-be investors.

    Aligbe said the clamour for national carrier has become imperative because of the grossly inadequate operational strength of domestic airlines.

    He said: “Today, virtually the entire industry and, indeed, the vast majority of stakeholders are either clamouring for or desirous of a befitting national carrier.

    “There are still a few who believe that Aero and Arik are airlines that belong to the government. It is not true. If they were, they  would be under Aviation not AMCON that has no statutory responsibility on aviation but rather on debt collection.

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    “Any attempt to move outside this statute will occasion international litigations that could be unresolved for many years. This is because both the original owners and creditors will head to court to challenge the Federal Government.”

    He posed a few questions : “Can any healthy and virile establishment be founded on the back of unhealthy and struggling entities?

    “Will any sensible investor invest in such establishment?

    “Where no investors come, such a national carrier will exist on 100 per cent  government equity, just like the liquidated Nigeria Airways.

    “Have we so soon forgotten the bane of Nigeria Airways?

    “Can AMCON’s liabilities from Aero and Arik, vicariously or inferentially, be assigned simplicter to the Federal Government?

    Ditto the assets?

    “If not, then the argument of Federal Government owning two airlines – Aero and Arik fails to sail.”

    “Have AMCON and Supporter – Proponents stopped to consider the

    “Outline Business Case” (OBC) of its proposition on the use of Aero-Arik merger to float a national carrier?

    “I ask these because in our present dispensation, all such proposals/promoters must first submit an OBC to the Infrastructure Concession and Regulatory Council (ICRC) for evaluation, guidance and approval.

    Aligbe said for those who are not aware, the Nigeria Air national carrier project had gone through this process, passed two to three approvals  by the Federal Executive Council (FEC), and successfully concluded the Development stage and was at the procurement stage in compliance with ICRC approvals and guidance.

    “My simple advice to the Minister of Aviation is to just ignore Kuru and his AMCON and move on,” the expert maintained.

  • ‘Borders closure undermining economy’

    By Musa Odoshimokhe

    The continued border closure has been described as an approach capable of undermining the  economy.

    This is the position of Babatunde Gbadamosi, a Lagos State gubernatorial candidate of the Action Democratic Party (ADP), in the last general election.

    Gbadamosi, who spoke at the Salem Touch Awards, held at Lagos State University (LASU), Ojo, Lagos, where he was honoured with the “Creative Exponent Award” recently, said the closure was taking a toll on the citizenry.

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    “It is clear that the agenda behind it is completely not for economic growth, because it will diminish the earning capacity of people, and if it happens, people will suffer. Consequently, many sectors of the nation’s economy will be affected and the neighbouring countries that have built doses of subscriptions on us,” he said, adding that government needs to open the economy in such a way to attract more trade and industries.

    He argued that there are numerous ways the borders could be closed to check arms smuggling and crimes like banditry without total closure, and urged the country