The African Development Bank (AfDB) and African Export-Import Bank (Afrexim) are to invest the sum of $20 billion in two projects spearheaded by the Federal Government, in the aviation sector. This is according to reports by Thisday.
The ADB had recently invested $70 million in the Development Bank of Nigeria (DBN) which is spearheaded by the Federal Government and several multilateral partners.
Where will the investments be channeled to ?
The funds will be invested in an aircraft leasing company, as well as a Maintenance Repair and Overhaul (MRO) facility. The aircraft leasing company will provide aircraft for the country’s proposed national carrier.
Benefits of the proposed investment
Nigeria’s aviation sector is beset with several challenges, one of the most pertinent being the cost of servicing aircraft. Aircraft are flown abroad for maintenance, with airlines paying in dollars. Revenues earned however are in Naira, leaving the airlines at the risk of foreign exchange volatility. Conducting maintenance in Nigeria will thus result in enormous cost savings.
African Export-Import Bank (Afrexim) Bank was established in October 1993, by African governments, private and institutional investors as well as non African investors for the purpose of financing and promoting both intra African trade and extra African trade. The bank has its headquarters in Cairo (Egypt), and branches in Harare, Abidjan, Afrexim has an issued capital of $5 billion.
The African Development Bank Group (AfDB) or Banque Africaine de Développement was founded in 1964 and comprises three entities: The African Development Bank, the African Development Fund and the Nigeria Trust Fund. The bank’s headquarters are in Abidjan, Cote D’Ivoire.