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According to the government, the strategic partners are expected to run the airline as a private sector initiative to avoid suffering the fate of defunct Nigeria Airways.
The previous national carrier, the Nigeria Airways, founded in 1958, was wholly owned and managed by the Federal Government before it went under in 2003.
Hadi Sirika, the Minister of State for Aviation, said on Wednesday that the government would not own more than five per cent of the new carrier. He made the comments while giving details of the airline at the Farnborough air show in England.
The government plans to launch the airline in December, making good on President Muhammadu Buhari’s election campaign promise.
Decades of neglect and lack of investment have left Nigeria with low-quality infrastructure seen as a hurdle to prosperity. The government has said that upgrading it would require private investment. “The initial capital is likely to be in the range of $US 150 to $300 million, in- vested in tranches over time from start up through the first five years of operation,” a government document stated.
It said the government would provide initial capital but did not state the sum or give further details.
The government will “facilitate the process for opening up the capital of the airline to private sector financial investors”, the document stated.
A private operator, sought through a Public Private Partnership (PPP) process, will manage the airline without interference, it said.
Nigeria Air would serve domestic and international markets and expect to have a fleet of 30 aircraft in five years with hubs in Lagos and Abuja, Nigeria’s two main cities.
British billionaire Richard Branson set up domestic and international carrier Virgin Nigeria in 2000, but pulled out in 2010 over what he said was interference by politicians and regulators.
The airline he created, which was later rebranded Air Nigeria, closed in 2012 after collapsing under N35 billion of debt which left it unable to pay staff, a former finance director of the company said at the time.
Nigeria is overhauling its aviation infrastructure and handing over its airports to private managers in order to improve the business environment for the industry and to attract investment, the document said. It said current air traffic in Nigeria is around 15 million passengers which is expected to grow at five percent per annum through to 2036.
Source: Sunday Sun.
The Nigerian government has announced that USD$322 million (£244 million) stolen by Nigeria’s former military ruler, Sani Abacha, has been returned by the Swiss authorities.
Abacha, an army general who was head of state from 1993 until his death in 1998, is suspected to have embezzled between USD$3 to 5 billion of public money.
Plans have also been announced to distribute the recovered loot to around 300,000 households in 19 of Nigeria’s 36 states. Under the plan each household would get around USD$14 a month. The handouts would be paid to poor Nigerians for about six years.
Roberto Balzaretti, one of the Swiss officials involved in the negotiations with Nigeria, reported that there would be strict conditions attached to the transfer of the money back to Nigeria. Nigeria has signed a memorandum of understanding with Switzerland and the World Bank agreeing the modalities for the return of the stolen funds.
The Nigerian government has opted for cash payments to be made to help poor families as part of the Nigeria National Social Safety Net Program. The money is to be paid in instalments and in small amounts under the supervision of the World Bank, which will also conduct regular audits. If the first instalment is not properly accounted for, subsequent payments will be halted. This is to prevent the funds from being stolen again.
But there are fears that this is not the best way to use the recovered funds and that the “distribution” is just a ruse to influence the Nigerian elections next year. Concerns have been raised that it’s an easy way for the ruling political party to score cheap points ahead of the 2019 polls. And there are strong views about how the money can be better spent, particularly on the country’s crumbling infrastructure.
The money is being returned to Nigeria at a delicate time. Nigerian President Muhammadu Buhari has announced that he will be seeking reelection next year. This despite his ill health and corruption scandals.
Nigerian politicians are infamous for buying votes.
Suspicions that the redistribution scheme is another vote buying ruse have been fuelled by the fact that the government plans to give money to only 19 states out of the 36. The government has said that 17 states where excluded from the scheme because they didn’t have the “appropriate platform” to implement the conditional cash transfers.
There are also fears that the recovered loot might end up in the coffers of ghost beneficiaries.
The Nigerian house of representatives – the lower house of Nigeria’s bicameral National Assembly – has passed a motion that the money must be distributed in line with the country’s revenue sharing formula for disbursing money to all 36 states.
The Socio-Economic Rights and Accountability Project, a Nigerian nongovernmental anti-corruption agency, has added its voice to criticisms of the plan. It has pointed out that the distribution of funds is
mis-targeted and would not bring any tangible benefits to the beneficiaries.
The project argues that the president should renegotiate the memorandum of understanding with the Swiss authorities in consultation with the communities affected by grand corruption so that the recovered loot can be put to better use.
A better way?
Is there a better way to utilise the recovered loot?
Nigeria needs proper procedures to manage recovered money as it continues with its anti-corruption agenda. The government will be better placed in the future to manage recovered funds if it has a coherent plan detailing how they should be handled. The plan will need to be overseen by the country’s anti-corruption institution.
Infrastructure projects, such as proper transport systems and power generation, also have the advantage of being highly visible and could be easily tracked through Budgit and Tracka. Construction projects would also create jobs.
There is a clear link between infrastructural development and economic growth – an area where Nigeria could really do with some help. The country struggles from infrastructure deficits, particularly in power generation, transport, education and health care.
Experts also argue that giving the money to poor households will only serve as temporary respite from poverty. Investing in infrastructure that can improve growth, employment, production, education and health care would create better and longer-term value.
The government might be wise to listen to these views.
The Federal Government of Nigeria have unveiled the branding and livery for the new national carrier, Nigeria Air, and stated that the airline would be inaugurated at the end of this year.
According to a statement issued by the Ministry of Aviation in Abuja, the Minister of State for Aviation, Senator Hadi Sirika, unveiled the carrier at a press conference during the Farnborough Air Show in London.
Sirika was quoted as saying, “I am very pleased to tell you that we are finally on track to launching a new national flag carrier for our country, Nigeria Air. We are all fully committed to fulfilling the campaign promise made by our President, Muhammadu Buhari, in 2015. We are aiming to launch Nigeria Air by the end of this year.
“We obtained the Certificate of Compliance from the Nigerian Infrastructure Concession Regulatory Commission two weeks ago and can now go into the investor search. I am confident that we will have a well-run national flag carrier that is a global player, compliant with international safety standards and one which has the customer at its heart.
“We hope to establish an airline that communicates the essence of our beautiful country; an airline we can all be proud of.”
The ministry said the branding and naming of the new national carrier came after a social media campaign that was undertaken by the Ministry of Transportation (Aviation).
It said invited Nigerian youths were asked for their input in order to come up with a name for the new flag carrier, adding that the ministry’s Facebook page and website engaged over 400,000 people.
The ministry said extensive market research was carried out, which involved focus groups across the country, and over 100 interviews with aviation stakeholders and professionals, politicians as well as business owners.
It also stated that it was currently running an aviation road map that includes airport concession, aerotropolis, an aircraft Maintenance, Repair and Overhaul centre, agro allied terminals, the national carrier and an aircraft leasing company.
“The government will support the launch of the new flag carrier with viability gap funding in a public private partnership arrangement to deliver a national flag carrier guided by international standards,” the ministry added.
Sirika said the Federal Government had learnt a lot of lessons from the experience of the defunct Nigeria Airways, and was now determined not to repeat the mistakes that led to its demise.
Meanwhile, Sirika has stated that the Federal Government has selected 81 routes for the commencement of operation of Nigeria Air.
Speaking at the Farnborough Airshow in London following the unveiling of the new national carrier, the minister was quoted to have said that for a start, the airline would operate 40 domestic, regional and sub-regional and 41 international routes.
He added that the airline would operate on a Public-Private Partnership model, while investors and strategic partners would decide who would run it.
He said, “This airline is a business and not a social service. It is not intended to kill any airline in Nigeria but complement it and promote it. It must be done in the right way so that it will be here to stay.
“Government will not hold shares beyond five per cent at the topmost. This airline has the backing of the government. Government will come up with funding according to the business case that has been delivered to the government. We will engage the youth of Nigeria because we do believe in the ‘Not Too Young to Run’.
“We engaged them in the campaign to name this airline. We engaged 400,000 Nigerian youths to arrive at the name of the airline. All of their ideas were taken and digested and we came up with what is an average. The airline will take into cognizance the multicultural nature of the nation through its diversity. We want to use this airline to make a statement that yes, we can do it.”
The minister also said the government would fast-track the airline’s International Air Transport Association’s membership and safety audit.
An aviation expert, Group Capt. John Ojikutu (retd), however, stated that the Federal Government’s route plan was not properly thought out.
He said the routes were already saturated with the new airline’s competitors, adding that this might stifle its growth.
“Whoever is planning these routes for the new national carrier should go into records and see what happened along same routes between Nigeria Airways and KLM; Nigeria Airways and South Africa Airways and Nigeria and Virgin Atlantic. You cannot go into the same business with your competitor(s) as partners,” he said.
Sometimes a throwaway sentence is more illuminating than it ought to be. A line in an article in Roads & Kingdoms in January about the Chinese in Lagos did just that. Near the end of the piece, the author wrote:
On my final night in Lagos, Fang invites me to the Huawei offices for dinner, handing me a guest pass and taking me through a winding corridor that opens out into a futuristic canteen. Staff can pay for their meal through Wechat, the Chinese social media app.
Being fairly acquainted with Nigeria’s tech scene and mobile money regulatory environment the last sentence jumped out at me—paying for things with WeChat is not something that is currently available to Nigerians as an option. I asked a couple of my friends in the Lagos tech scene how the Chinese were able to do this in Lagos and they simply shrugged and said “they are running their own little country here.”
It is not hard to come by data showing the scale of China’s investments and influence in Africa—the China Africa Research Initiative at the Johns Hopkins University estimates that, from 2000 to 2015, the Chinese government, banks and contractors extended $94.4 billion worth of loans to African governments and state-owned enterprises.
From a few million dollars in 2000, the amount of loans topped $16 billion in 2013 alone. Whether or not these loans are value for money or just a flow of money from the Chinese government to Chinese companies via Africa remains a matter of debate. A $600 million Chinese loan to fund the installation of CCTV cameras across the Nigerian capital Abuja has since been mired in corruption and scandal. It is hardly an isolated story.
But there is another part of the Chinese story in Africa that is rarely documented. That of the ordinary businesses who head to Africa, often without state backing, seeking to make a fortune. These businesses have mostly been careful to remain outside the spotlight and rarely ever speak to local media. A surprising McKinsey report from June 2017, based on extensive fieldwork, estimated that there were more than 10,000 Chinese owned firms operating across Africa, nearly four times what the numbers from the Chinese Ministry of Commerce (MOFCOM) showed. No one can say for sure—not even the Chinese government—how many Chinese businesses are in Africa, never mind what they are doing there.
One of the McKinsey report’s authors, Irene Yuan Sun, has however written a book—The Next Factory of The World: How Chinese Investment Is Reshaping Africa—that helps to illuminate the experience of Chinese businesses in Africa. Being of Chinese descent herself, she was able to get Chinese business owners in Africa to open up in a way that they almost never do to local media. What emerges is a surprising mix of success and failure with a good dose of fear and loathing thrown in. As someone who grew up in Nigeria until a decade and a half ago (and still maintains strong ties to the country), I found the book to be full of surprises and insights.
A broad pattern to these businesses can be sketched out—a Chinese business finds business increasingly hard to do in China, mostly due to rising costs and fierce competition. The business owner embarks on an exploratory trip to an African country and makes a decision to invest on the spot. In short order, they are pouring millions of dollars into building a factory in the African country. Beyond the narrow sectors of the economy in which they decide to operate, the Chinese businessmen remain almost completely out of sight to the local population. When Chinese businesses get reported on in the local newspapers, it is almost always about the maltreatment of local workers or a racist incident (often borne of misunderstanding).
In Nigeria, I am yet to hear of a marriage between Chinese and Nigerians in Nigeria and in my frequent visits to Nigeria, it is hard to recall bumping into Chinese revelers on a night out or sharing a restaurant or bar with them. Nigerians and Chinese in Nigeria are, to borrow Longfellow’s famous phrase, like ships that pass in the night and speak to each other in passing. This was comically illustrated by a line in Sun’s book where the author interviews a Chinese businessmen about the seemingly permanent tension between Chinese factory owners and Nigerian workers. In frustration, the Chinese businessman said, “Nigerians complain that Chinese people spit. But they pee in public on the side of the road all the time!”
Some of them have had spectacular success such as the Tung family who run a billion dollar steel business and sit on the board of one of Nigeria’s premier development finance institutions—Africa Finance Corporation.
Then there’s the Lee family whose Lee Group produces everything from bottled water to bread as well as 1.2 million pairs of flip-flops everyday, retailing them for around a dollar a pair. They have practically a 100-percent market share of the flip-flop market in Nigeria and West Africa but this monopoly is not visible to most people purely because they have achieved it through very low prices making it impossible for smugglers to compete against them and crucially, dispensing of the usual practice of local businessmen to get the government to ban or impose tariffs on the competition for them.
Yet there is more to the story. The Tungs and Lees are only the surviving two families out of four that settled in Nigeria decades ago. The other two lost their businesses in one of Nigeria’s many economic shocks. There have been plenty of Chinese failures across the continent and in Nigeria, in particular. The stories of Jason Han and John Xue are particularly instructive. In their 50s and seemingly bored in semi-retirement in China, they heard about a Chinese company that was struggling to develop a free trade zone with a state government in Nigeria’s south west.
They embarked on a week long trip to Nigeria, their first ever visit to the country, and while there concluded that they could help the state turn around the project. In a matter of weeks they had moved to Nigeria and taken over the running of the free trade zone. In four years under their management, the zone managed to attract 24 businesses and provide employment to 4,500 people, with only 200 of those being non-Nigerians. The zone was praised by the Nigerian and Chinese governments as a shining example of China-Africa relations.
And then the music stopped. The old management company which had been terminated still had friends in the state government and decided it now wanted the zone for itself again. A campaign of harassment and intimidation was launched against Han and Xue including the detention of one of their managers for two weeks. Jason Han appealed to the Nigerian president in an open letter about their ordeal but in the end, they were forced to abandon the zone and leave Nigeria.
This illustrates a particular kind of risk faced by Chinese businessmen in countries like Nigeria—politicians are able to trample on their rights without consequence because the Chinese are still viewed with some suspicion by the average Nigerian. The Chinese are thus ever only one infraction away from being scapegoated by a politician seeking cheap popularity or votes (all Nigerian politicians are populists) and the Chinese government is always reluctant to come to the aid of private Chinese businesses in Africa, if it even knows they exist at all.
What then to make of all of this? The most obvious is that there are a very large number of Chinese businesses on the ground in Africa making their way in often impossible circumstances. Many of them have met with great success and many others have lost everything.
Even after spending decades in the country, you often cannot find any meaningful reporting on them in the local media as is the case with the Lees and Tungs in Nigeria. Meanwhile the western media tends to focus, sometimes anxiously, on the government side of the relationship that comes in large dollar numbers but is often far less than meets the eye. The Chinese and their hosts continue to live side by side but far apart—the gap between them inevitably filled by mutual suspicion. The Chinese in Lagos retreat into their own world where they can make payments with WeChat, just like in China, thousands of miles away.
One can be optimistic or pessimistic about the future of this relationship. Much of it is useful in providing cheap products and employment while a lot of it remains frustrating borne of the seeming refusal of the Chinese to engage with their hosts creating a kind of standoff.
Even after many decades of doing business in Africa, Chinese businesses in Africa can hardly claim to be friends with their hosts. Like ships that pass in the night and speak to each other in passing.
Credit: Nigerians in South Africa
President Muhammadu Buhari on Monday in Abuja inaugurated National Food Security Council, to among others, explore and nip in the bud, issues capable of creating food security crisis in the country.
The council, which comprises six governors drawn from six geographical locations of the country, and ministers and security agents, has among its key mandate to continuously assess existing food security policies, trade and national planning programmes "thereby guaranteeing that they achieve their full potential."
While inaugurating the council which is chaired by himself, the president said the council "shall also develop new programmes and projects that will protect and indeed, create more jobs in farming, fisheries, animal husbandry and forestry."
He also said the council would look at other issues with the capacity to impact on food production ambitions such as population growth, urbanisation, industrialisation, rural infrastructure development and climate change.
"These factors will also stress and stretch our land and water resources. This means we must invest in research and development to enhance yields and outputs. Moreover, we are not insulated from global and regional events.
"Accordingly we develop local programmes, but not lose sight of events from a far and their impact on us. Specifically, issues such as smuggling and dumping, it is our responsibility to ensure we develop and enforce strategies to protect Nigeria from these illegal and unhealthy imports.
"The council includes governors representing the six geopolitical zones. Some geopolitical zones have similar eco climatic conditions. The council is therefore a platform to further enhance the collaboration between the federal and state governments. We shall share success stories and collaborate to address common threats.
"We will also engage key stakeholders representing the core sectors of the Food Value Chain. Regular consultations will be held with investors, development partners, financiers, academia and our friends and allies abroad.
"Our deliberations will look into all the issues and our decisions will be implementable and impactful. We shall stay focused, first and foremost on securing our food requirements and employment for our people, especially the youths. We shall feed ourselves and build an inclusive Nigeria for ourselves and for future generations," he said.
Briefing journalists at the end of the inauguration, Kebbi State Governor, Atiku Bagudu, said the president had captured the main objectives of the council to include strengthening all existing policies on food security including policies on trade, agronomy, national planning and national security.
Okowa said in the last few years, a lot had been done on rice production which he said had reduced the amount of money hitherto spent on rice importation adding that the trend had given confidence that in no time, Nigeria would be self-sufficient in rice production.
He listed challenges confronting rice production in Nigeria to include influx of rice through the borders which he said needed to be addressed.
He also said the council discussed the need to develop oil palm plantations and spend a lot of money on wheat production with a view to achieving food sufficiency.
In his own briefing, the Chief of Defence Staff, General Gabriel Olonisakin, said the military was aware of security challenges facing the country and listed such challenges to include: farmers-herders clashes and militancy, which he said all had direct effects on food value chain.
Submitting that the job of the military is to ensure that a safe environment is guaranteed for food production, Olonishakin listed measures put in place by the armed forces to achieve such a safe environment to include operations Lafiya Dole, Nawase in Niger Delta, Sarendaji in North-west and Safe Haven in Jos, North-central.
In his own submission, the Minister of Trade, Industry and Investment, Dr. Okechukwu Enelamah, said the newly inaugurated council looked at all dimensions of food security including the amount of money invested in food production and industry value chain.
In the same vein, the governor of Lagos State, Mr. Akinwumi Ambode, said the inauguration of the council marked the beginning of a paradigm shift in the economy of Nigeria.
According to him, the decision of the president to personally chair the council marked the commencement of the framework meant to take Nigeria from a monolithic economy to a diversified economy.
He said the council would address issues bordering on agriculture and national security, emphasising that everything that will guarantee the security of the nation in all spheres is encapsulated in the council adding that the council is absolutely being supported by governors brought into the council.
On his part, the Minister of State for Environment, Malam Usman Jubrin, said climate change would be on the front burner of the pursuits of the food security council, explaining that if Nigeria must move forward, issues bordering on climate change must be addressed especially as they affect agricultural activities including pollution in the Niger Delta.
Nigerian President Muhammadu Buhari’s visit to the Obama White House three years ago was ecstatic. By contrast, his visit this week to the Trump White House will be awkward. This time around, his host is a president who has referred to African states as “shithole countries” and remarked that Nigerians would never want to leave the US to “go back to their huts”.
Given Trump’s unpalatable statements about Africans in general, and Nigerians in particular, it’s fair to wonder why Trump invited the leader of a country he despises so much for a state visit. And also why Buhari accepted the invitation.
One answer is that the meeting offers both leaders a platform to promote their various political goals. Trump could use the occasion to showcase his credentials as an indefatigable fighter against terrorism. And he could pledge to help Buhari defeat Boko Haram in northern Nigeria, much as he has done with ISIS in Syria and Iraq.
For his part, Buhari is headed for a tough re-election bid a year from now and may believe that a visit to the White House could boost his international profile. His prolonged absence from office last year due to illness led some observers to believe that Nigeria had abandoned its role as a leading voice for Africa.
It’s not inconceivable that Buhari’s visit to the White House has little to do with economic relations, but more about the political gains both leaders can make. Buhari’s US visit comes on the heels of a recent visit to Downing Street, and will soon be followed by another visit to the Elysee Palace.
What must not be forgotten is that US dependence on Nigerian oil has increased dramatically with imports jumping threefold in 2016 driven by uncertainties in Iran and Venezuela. This suggests that both countries have a common interest in maintaining a close relationship.
What will be on offer
One deal that’s likely to be consummated during the meeting is the planned sale of up to 12 Embraer A-29 Super Tucano attack planes to the Nigerian Air force for about USD$600 million to help fight Boko Haram. Trump is also likely to announce the deployment of more military advisers to assist Nigeria in fighting Boko Haram.
But fighting Boko Haram requires much more. As the commander of the US Africa Command, General Thomas D. Waldhauser, recently observed,
Unrest within West Africa is driven by local grievances, corruption and weak governance, human rights violations, and imported religious ideology.
Buhari could also do with substantial non-military assistance. In particular, he needs help to address two huge social problems in Nigeria: the fact that 70% of Nigerians live in abject poverty, and that more than 50% of the country’s young people are jobless.
But Buhari should not count on Trump to increase aid for the kind of economic transformation the country needs. In the 2017 financial year, the US budgeted a mere USD$608 million in foreign assistance to Nigeria, a number which eerily echoes the price tag for the 12 fighter jets Nigeria wants to buy.
US assistance is unlikely to increase for two main reasons. First, Trump is pursuing his “America First” philosophy and has vowed to slash its foreign aid budget. In 2017, the budget was USD$34 billion, or 0.2 percent of US budget, out of which Africa received 21%.
The other reason the aid taps are unlikely to be opened is that Trump has threatened to withhold aid to countries that supported the UN resolution condemning his administration’s decision to recognise Jerusalem as Israel’s capital. Nigeria is one of the several African countries that voted for the resolution.
Nigeria is America’s 56th largest goods trading partner. The US exported goods worth USD$1.9 billion in 2016, and imported goods worth USD$4.2 billion that year, leaving the US with a trade deficit of USD$2.3 billion with Nigeria. But these numbers are deceptive because US imports are made up mainly of crude oil. Stripping out the oil, the US would have had a trade surplus of USD$1.7 billion in 2016.
To alleviate poverty and create jobs Nigeria needs to export more non-oil products to the US. At the very least, Buhari should press Trump to strengthen the African Growth and Opportunity Act (AGOA) enacted in 2000 to facilitate the access of African exporters to the US market. Nigeria was the leading AGOA exporter in 2016, with over USD$2 billion worth of exports under the Act.
There are fears that Trump might jettison the Act, or weaken some of its provisions that he deems inimical to his “America First” philosophy. Buhari should defend it unequivocally.
And he should tell Trump that Nigeria needs more US foreign direct investment. In 2016 the number was USD$3.8 billion in 2016, far less than the USD$13 billion the Chinese invested in Nigeria in the same year.
Business as usual
The US-Nigeria relationship has historically been driven less by economics, but more by convenience and indifference. While Nigerian presidents covet a visit to the White House, US presidents tend to be indifferent, and sometimes passive, about Nigerian affairs.
An example is the blind eye various US administrations turned as successive military dictators presided over Nigeria for three decades. Some of those dictators managed to stash their ill-gotten wealth in US financial institutions. I suspect that Buhari will be asking Trump to help repatriate some of those illicit funds. Whether Buhari also gets to ask Trump to commit to trade and investment, and not fighter jets, remains to be seen.