Tag: air cargo

Players in the aviation and allied sectors have called on the Federal Government to put in place appropriate policies to enable the industry tap into opportunities intended to transform Nigeria into a $1 trillion economy by 2030.

Air cargo if properly harnessed, could contribute significantly to Nigeria’s non-oil export and revenue receipts for the growth of the economy.

Already about 13 airports owned and managed by the Federal Airports Authority of Nigeria (FAAN), on behalf of the Federal Government has been designated as agro- cargo terminals to drive the export of non- oil export.

The terminals are: Abuja, Akure, Calabar, Ilorin, Jalingo, Jos, Kano, Lagos, Makurdi, Minna, Owerri, Port Harcourt and Uyo airports.

Experts said the existence of intentional policy and regulatory framework would make Nigeria seek greater participation in the global air cargo market capable of generating over $6 trillion worth of goods each year, constituting  about 35 per cent  of global trade by value.

To tap into this burgeoning market, experts say Nigeria needs to improve facilities at its airports designated for cargo to boost the packaging, processing and facilitation of air freight for produce including : minerals – such as   gold, diamonds,platinum;  agricultural products   including :  coffee, cocoa, tea  as well as   manufactured goods.

Speaking in separate interviews, an aviation industry strategist and former Rector of the Nigerian College of Aviation Technology (NCAT), Captain Samuel Caulkrick , former military commandant of Murtala Muhammed International Airport and Chief Executive Officer of Centurion Security  Limited , Group Captain John Ojiktu (rtd) said air cargo holds the ace in generating huge revenues for the continent.

According to Caulkrick, to unlock the missed opportunities in the air cargo business in Nigeria would require thinking outside the box by taking advantage of what many people believe is a waste of resources by many states in Nigeria building airports.

The former rector of NCAT said one of the ways to achieve cost effectiveness for  food to be air freighted must be processed and packaged in the producing states by extracting water to reduce weight.

He said the window of moving agro – cargo by air will assist to achieve food security and eliminate the myriads of challenges associated with transporting perishable by other modes of movement such as road.

He said there is a need to compare the high cost   of road haulage to bustling cities of Abuja and Lagos when compared to air transportation costs.

Caulkrick said  poor road conditions  continue to cause delays and damage to goods, with the associated police checkpoints and  exploitation do add to the costs and hijacking risks , which constitute a threat to  safety of goods and personnel.

To drive air cargo business in Nigeria, the aviation expert said : “ Utilizing Nigeria’s multiple unused state airports for air freight can unlock significant opportunities for growth. To capitalize on this potential, state governments and air carriers must invest in airport infrastructure by  developing access roads to facilitate the movement of goods to and from the airports.

“ They can acquire smaller air freighter aircraft such as  the CRJ200 cargo or ATR42 freighter, which are suitable for shorter routes and smaller cargo volumes.”

He said there are lots of benefits the development of air cargo infrastructure could bring to the country.

The expert said : “ It can  generate employment opportunities in the aviation and logistics sectors.It could also  stimulate economic activity in rural areas and promote trade. It could accelerate the drive to achieve food security. By  enhancing the transportation of perishables, reducing spoilage, and increasing access to fresh produce, it could also reduce  congestion on Nigerian roads.  Mostly,  federal roads , which would alleviate pressure  reduce the environmental impact of transportation – a bargaining point for the federal government’s support by reducing taxes on the air cargo operators.

Read Also:Traditional institutions key to Nigeria’s health sector reforms – Minister

“If we invest in air cargo infrastructure and services, Nigeria can tap into the vast potential of its aviation sector, driving economic growth, and improving the lives of its citizens.”

On his part, Ojikutu said operators are not tapping enough benefits into the burgeoning opportunities in the air cargo sector.

He said : “ Over 10m tonnes of cargo are available on our roads annually but less than half a million tonnes of cargo are on air freight. If the Ministry of Agriculture is also responsible for Food security as it is said now, how much of the budget spent on security is on transportation or don’t those in the administration of the government know that transport is a function of national security?

“There are over 5000 tonnes of perishable agriculture/food products  that their movement is days and perished on the roads  but would need air transportation support from the ministry of food security.

 “Government can cause the airport service providers to reduce charges on aeronautical services, landing and parking and the  five per cent  sales charges on local food and medical cargo.

“These cargoes would be coming from airports that are not active for air passengers and cargo freighting can make one million from some of them thereby increasing the annual national freight cargo from less than half a million tonnes now to over a million within a year.”

Nigeria will require over $5 billion investment to fix air cargo infrastructure in at least 24 of its airports nationwide in order to position it as one the major players in the air cargo/ freight, courier, logistics and agro- allied value chain, the Managing Director/ Chief Executive Officer of Red Star Express Plc, Mr Auwalu Badamosi Babura has disclosed.

Babura, who disclosed this in an interview in Lagos said without sufficient investment and intentional policy to drive the growth of air cargo in Nigeria, the expected gains from the eco- system would not be achieved.

While calling for advocacy by industry players to impress on the government to create a more enabling environment for the value chain to thrive, Babura said some intensive intervention, including an estimated $30 trillion lifeline to modernize economic infrastructure in the next three decades remains key in unlocking the huge potential in air cargo business.

Besides the huge capital injection, which could be leveraged through private sector participation, Babura said the Federal Government must take urgent steps to address lingering challenges affecting the growth and development of air cargo.

He listed them to include fluctuations in aviation fuel price, regulatory bottlenecks with bilateral air services agreement with the United Kingdom (UK) and the United Arab Emirates (UAE) as well as high cost of ground handling equipment.

Read Also: Nigeria seeks more participation in $310b air cargo business

He listed other constraints to include poor airport infrastructure and absence of economies of scale, extremely high insurance premiums, high taxes and cost of operations and other factors.

Babura canvassed the re- negotiation of bilateral pacts with the UK, UAEs’ airports/ terminals for Nigerian airlines.

He said: “Air cargo could be a major contributor to Nigeria’s gross domestic product with the total air freight forwarding business / market projected to reach $178 billion by the end of 2024. This is hinged on the fact that Nigeria’s GDP recovery depends on air cargo development.

“ For this to happen, the Federal Government through the Central Bank of Nigeria (CBN), must initiate policy to support freight forwarders involved in export have access to foreign exchange for international settlement of partners.

“Subsidies should be given to airlines and cargo handlers who do not have enough foreign exchange liquidity in their asset base to safeguard jobs and investment as well as explore opportunities for tax reductions.”

On other measures to be taken by the government, Babura said: “The Federal Government should develop and deepen specialized temperature control storage and processing warehouses for pharmaceuticals and agro – perishable.

“Nigeria air freight market can scale through electronic commerce, cross border shipping, direct currency settlement by applying no duties for small items.

“As at 2018, Lagos International Airport remains the largest in terms of freight kilometres . There remains an urgent need to deepen cargo traffic across other cargo passenger airports.”

The Red Star Express boss said if the government fixes some of the listed challenges, Nigeria is projected to reach over 19 million tonnes kilometres of air cargo by 2025 with adjustments expected from the impact of COVID – 19.

But, to take Nigeria to the projected level of growth, the government , Babura insisted, must take urgent steps to re-write the narrative, in fixing the convenience of airport operations which still puts it in poor rating  as the sixty eight out of over 150 nations in the air trade facilitation index.

He said: “We must make frantic efforts to improve from the poor rating of number thirty sixth among 135 nations in the electronic freight friendliness index. Work hard enough, to step higher from the current rating of number 127th among 136 nations in the enabling trade index.”