Business News
Stakeholders want FG to merge Aero and Arik Air
The Nigerian government has in the past years, recorded failure in successfully floating a national carrier. In view of this, stakeholders in the Nigerian aviation industry have advised the Federal Government on what to do with Aero Contractors and Arik Air.
The stakeholders wants the government to merge the two airlines to establish a national carrier. On why the merger should take place, Group Captain John Ojikutu (rtd) said that it is almost impossible for Asset Management Corporation of Nigeria (AMCON) to get investors to buy the Arik Air with its N300 billion debts.
Ojikutu maintained that for AMCON to offset the N300 billion debts from the airline, it should be making a net profit of N10 billion annually for 30 years, stressing that this would be difficult for the corporation to achieve. He added that AMCON did not have the resources to run an airline profitably.
Lookman Animashaun, an industry expert and former Director of Engineering at Medview Airline, suggested that the best option for AMCON and the Federal Government is to establish a national carrier with the airline.
Just like Ojikutu, Animashaun said because of the airline’s debt burden, no investor would be interested in the airline, and if AMCON decided to manage the carrier, it would take it about 30 years to recover the money it invested in the airline, considering the airline’s turnover.
Animashaun maintained that it would be a waste of resources and spending a longer time trying to establish a new national carrier when Arik Air and Aero Contractors, which were under the Federal Government management could be used to establish a national carrier.
He explained that Arik Air had structure and it had a fleet, which government could maintain and put them back in the air and then grow a national airline from there.
“Arik Air has structure, although AMCON claims it does not have. So my thinking is that there is no need starting a new national carrier; what government should do is to earmark funds and carry out maintenance of all the aircraft in the fleet and start the new national carrier.
“This is the only window AMCON has because it cannot let go of the money it sank in the airline and managing the airline to get back the money through its revenues will take about 30 years because of the airlines profit margin. This is better and easier way out,” Animashaun added.
Recall that in May 2017, a proposal was already in place by the Federal Government to merge Arik and Aero in order to create the new national carrier.
Prior to this…
AMCON took over Arik Air in February 2017 and has estimated the airline’s debt at over N375 billion comprising domestic and foreign investors. Since then, the bad bank has injected over N1.5 billion into the airline. There have been several allegations of AMCON cannibalising Arik aircraft parts to put in Aero Contractors.
In a similar circumstance, AMCON in February 2016, took over Aero Contractors. The airline which prides itself as one of the oldest in the country was founded by Schreiner Airways BV of the Netherlands in 1960. The Ibru family later bought a stake in the company and became the full owners in 2010. The airline’s indebtedness to AMCON and other bodies is estimated at over N20 billion.
Business
Sanwo-Olu speaks on need to resolve community’s agitations for tank farms relocation
Sanwo-Olu called stakeholders to come together in order to provide a lasting solution to the issue.
The Lagos State Governor, Babajide Sanwo-Olu, has listed conditions that must be met, in order to bring a lasting solution to the dispute between petroleum tank farm owners at Ijegun-Egba area of Amuwo Odofin and the residents of the host community.
One of these conditions is that tank farm owners and petroleum tanker drivers must subscribe to operational regulations that limit the loading of tankers beyond their weight capacities. Also, all Federal Government’s regulatory agencies operating in the area must stop working at cross purposes with the state’s agencies, in the bid to address the environmental degradation in the area.
The governor also stressed that both the federal and state authorities should collaborate on the regeneration efforts of road and infrastructure in the area.
This disclosure was made by the Lagos State Governor on Thursday, August 13, 2020, in Marina, while receiving members of the House of Representatives Ad-Hoc Committee on the Relocation of Tank Farms. The Committee, which was constituted by the Speaker, Femi Gbajabiamila, was also intended to investigate and make recommendations on the issue.
The Hon Sergius Ogun led Ad-Hoc Committee had initially gone on a two-day inspection to Ijegun before sharing the findings with the Governor.
During the meeting, the governor pointed out that the regeneration of Ijegun-Egba was as important to the community as smooth transportation of petroleum products was important to the tank farms’ owners. He warned that the country could not afford to allow the host community’s agitation to hinder the operations of the tank farms, which, he said, supply 45% of petroleum products consumed in the country. The governor said:
“The Ijegun-Egba tank farms are strategic national assets created by the private sector to serve the whole country. Between 40 to 45% of the entire petroleum products that go across the country pass through that corridor. Even if it is to cater for our own need, we must take care of those assets, because they are like a strategic reserve for us as a nation.
“The rudiment of the problem in the area is a logistic issue, which is to ensure the movement of oil tankers in and out of the area without affecting the wellbeing of the community members. We have had to contend with environmental issues and the extent of the bad road network on the corridor is glaring. We have seen how small-capacity tankers are carrying up to 70,000 litres of petroleum products when they should be taking only 30,000 litres. This has exerted great pressure on the roads and the officers that are supposed to monitor them look away.
“These are part of the issues we need to resolve with the stakeholders. If we can let these people run their businesses within the confines of regulations, part of the solutions would have been achieved in the process. Also, there is a need for total regeneration of the roads in the area. We want the environment to be conducive for business, but we must do that in line with the safety of lives and property. We have talked with tank farms’ owners and we all need to come together. It is important for the Federal Government’s agencies to have an agreement and we are ready to play our own part.”
The committee was set up following the agitations and demands by residents of Ijegun Egba Satellite Town for the immediate relocation of the tank farms in the residential area. This, according to the residents, would help to prevent further environmental degradation and loss of lives and property in the area.
The host community accused tank farm owners of disrupting the drainage system, damaging roads within the community, and even converting roads to parking lots for their tankers.
The Governor stressed that genuine solution would be achieved if the entire network of infrastructure in the host community was cleaned up and regenerated. He, however, revealed that the new regeneration design that the state came up with could not take off because the federal authorities had not agreed with the plan.
Furthermore, Sanwo-Olu noted that it is high time for all the stakeholders to come together in order to provide a lasting solution to the issue.
“After your thorough assessment of the situation, I hope you would be able to call all relevant stakeholders and agencies of Government together on the discussion table. We are committed to any effort that’ll bring a permanent solution. We know how much of investment we have in the area, but businesses have to be done under a safe and controlled environment. We want every stakeholder to play their roles,” he said.
Making his own remark, the Chairman of the Ad-Hoc Committee, Hon Ogun, admitted the inability of the Federal authorities to work collaboratively with the Lagos State Government was part of the reasons the community’s agitation festered. He, however, promised that the House would prevail on the federal agencies to close ranks with stakeholders and bring about lasting solutions.
FEATURED
13.9 million Nigerian youth are unemployed – NBS
About 13.9 million Nigerian youth are unemployed as of Q2 2020.
Data from the National Bureau of Statistics reveals Nigeria’s unemployment rate as at the second quarter of 2020 is 27.1% indicating that about 21,764,614 (21.7 million) Nigerians remain unemployed.
Nigeria’s unemployment and underemployment rate (28.6%) is a combined 55.7%. This means the total number of Nigerians who are unemployed or underemployed as at 2020 Q2.
The data also reveals the worst-hit are Nigerian youths with over 13.9 million currently unemployed. In Q3 2018, the last time the report was released there were about 13.1 million Nigerian youths unemployed. Youth between the ages 15-24 have about 6.8 million Nigerians out of jobs and another 7.1 million also unemployed.
Key highlights
- The highest unemployment rate was recorded for youths between 15 – 24 years 40.8%,
- This is followed by ages 25 – 34 years at 30.7%.
- NCE/OND and Nursing recorded an unemployment rate of 30.8%
- The unemployment rate amongst second-degree holders (M.Sc/MS/MAdm) stood at 22.9%
- Unemployment rate as classified by Doctorate degree holders is 23.3%
What this means: The NBS also reports Nigeria’s youth population eligible to work is about 40 million out of which only 14.7 million are fully employed and another 11.2 million are unemployed. A high youth unemployment rate is synonymous with increased insecurity and poverty a situation that is also seen as a ticking time bomb.
To put things into context, Nigeria’s unemployed youth of 13.1 million is more than the population of Rwanda and several other African countries. Youth Population is also about 64% of total unemployed Nigerians suggesting that the most agile working-class population in the country remains unemployed.
The Covid-19 pandemic has also worsened the economic condition in the country making it even harder for employers to create more jobs. The private sector has relied on cutting jobs in the guise of downsizing and right sizing to reduce overheads and stay afloat.
The recent data also buttresses the high rate of Nigerians seeking greener pastures outside the country with most of them highly skilled and looking for jobs of the future. According to most recent data, in 2019 about 12,600 Nigerians gained permanent residency in Canada last year helping the country to become the fourth-leading source country of new immigrants to Canada, behind India, China, and the Philippines.
Last year, the Government of Canada revealed Nigeria ranks third in the rating of the countries with the highest number of Express Entry invitations to Canada in 2018. This is revealed in the 2018 report released by the Canada Government. According to the report, a total number of 6,025 Citizens of Nigeria received invitations to apply (ITAs) for Canadian Express Entry in 2018. It was further revealed that Nigeria is just behind China who recorded 6,248 ITAs in 2018.
FEATURED
Official: Imo State is unemployment capital of Nigeria
According to NBS, 75.1% of the total employable people in Imo State are either underemployed or unemployed.
Data from the National Bureau of Statistics reveal Imo State, located in the South-Eastern part of Nigeria has the highest unemployment rate in the country.
In contrast, Anambra State is the state with the least unemployment in the country with 13.1% unemployment rate. The national average for the unemployment rate is 27.1%
Imo State has an unemployment rate of 48.7% as at the second quarter of 2020, by far the highest when compared to any other state in the country.
According to the data, 75.1% of the total employable people in the state are either underemployed or unemployed.
READ MORE: Nigerians react as Anambra lawmakers reject Prado SUVs for Innoson SUVs
See highlights
- Total number of employable people – 2.48 million
- Fully employed people – 618, 481
- Unemployed people in the state – 593. 347
- Underemployed – 656, 394
Imo State is largely a civil service town and has been unlucky with state governors over the last 20 years. Private sector jobs are hard to come by in the serene state with most industries setting up show in nearby cities like Aba, Port Harcourt, and Onitsha.
The city was once notorious for ritual motivated murders and kidnappings but has since overcome these challenges.
READ MORE: Ride-hailing: Uber says industry guidelines are inconsistent, unclear
States Unemployment Rates – Q2 2020
Other States
Akwa Ibom State is next on the list with an unemployment rate of 1.14 million people. The state’s underemployed population is about 551k people while the unemployment and underemployment rates combined is 66.9%.
The best: The state with the lowest unemployment rate in Nigeria is Anambra State with 13.1% out of the total working population of 2.25 million people. The state was 37 out of 37 states in the ranking of unemployment by state. About 1.9 million people in Anambra State are either fully employed (1.57 million) or under-employed (384k) in the state.
READ ALSO: Ekeh, Zinox boss, intervenes in Imo State with N1 billion
Lagos State, Nigeria’s commercial capital and where most graduates rush to for jobs currently has an unemployment rate of 19.5% and sits at 27 in the state by state unemployment ladder. The data shows about 6.8 million people make up the labour force population in Lagos State out of which 3.99 million people are fully employed and another 1.5 million people are underemployed. About 870k Lagosians who are employable did absolutely nothing.
Download the Nairametrics News App
Concentration: In terms of the concentration of unemployed people, Rivers State came first with a whopping 1.7 million people out of jobs in the state. The state as a working population of 3.9 million. Rivers State unemployment rate is 43.7 and ranks third as the worst. 21.7 million Nigerians are unemployed.
Lagos State had the most employed persona with about 3.99 million people out of a total of 35.5 million.
MTN, CADBURY, UNILEVER record losses, ASI down by 0.15%
Sanwo-Olu speaks on need to resolve community’s agitations for tank farms relocation
13.9 million Nigerian youth are unemployed – NBS
Official: Imo State is unemployment capital of Nigeria
Daily Parallel Market exchange rate – ₦475/$1
List of Dividends announced so far in 2020 (August)
COVID-19 Update in Nigeria
Daily Parallel Market exchange rate – ₦475/$1
Nigeria’s unemployment rate jumps to 27.1% as at 2020 Q2
Ethereum on rampage, surges to a 2-year high of $430
