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Aviation: Aviation sector grasps for stimulus in worst ever crisis

In 2019, the Nigerian aviation sector was the fastest growing sector in Nigeria in real GDP terms, up 13.2% y/y to N83.5bn.

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Aviation sector to contribute over N1.2 trillion to Nigeria's GDP by 2020, Nigerians might be hit with higher ticket price as airlines battle fuel scarcity, fuel price increase , Aviation: Aviation sector gasps for stimulus in worst ever crisis

In 2019, the Nigerian aviation sector was the fastest growing sector in Nigeria in real GDP terms, up 13.2% y/y to N83.5bn from N73.8bn in 2018. However, the outbreak of the coronavirus in Nigeria has threatened to derail the fast improving prospect of the industry. The aftermath policies of the Federal Government in the bid to contain the spread of the coronavirus resulted in the shutdown of the Nigerian airspace since March 22. The Presidential Task Force (PTF) on coronavirus recently announced a 4-week extension to the ban on both local and international air travel.

The economic costs of the shutdown of air travel is significant for Nigeria. According to the Minister of Aviation’s briefing to the PTF on coronavirus, Nigeria currently loses N21bn/ month. In addition, data from International Airline Tranport Association (IATA) estimates that the coronavirus outbreak would cost Nigeria’s aviation sector US$994.0m (N357.8bn) in Revenue, 125,370 jobs would be lost, and the overall economy would lose US$885.0m (N318.6bn) in form of nominal GDP contribution from the sector.

READ ALSO: FG waives import duties for medical supplies, orders Customs to expedite clearing

The crisis in the aviation industry is a global phenomenon that resulted from the need to curb transmission of the global pandemic across countries. However, the difference in the case of Nigeria is the dearth of palliatives to ease the crisis in the sector. For example, in the United States, the historic US$2.2tn fund includes a US$61.0bn relief package for airlines. In exchange, they promised to keep their thousands of employees through the crisis.

In Europe, governments have made available loans for airlines, although countries like UK have instructed that the airlines must have exhausted other sources of funding. In Nigeria, the situation appears different, while the CBN has announced several stimulus packages in union with the FG, the attention seems to have been directed towards, health and pharmaceuticals. This comes despite the request made by the Minister of Aviation for stimulus measures to support the industry.

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(READ MORE: British airways set to suspend 32,000 employees)

We note that while the sector has been showing signs of promise in recent years, the story has not always been positive, with intense competition among airlines forcing ticket prices lower. When the low occupancy rate of local flights is considered, the situation appears worse, forcing smaller players who could not compete to file for bankruptcy. Failure by the Government to provide adequate support for the industry will lead to several airlines shutting down and massive job losses within the sector. For example, Airport Hotel, an associated hotel business close to the Lagos Muritala Muhammed airport sent its workers on a 3-month leave without pay.

In our view, the Federal Government needs to provide dedicated funding support in the form of loan facilities and tax breaks to support the very fragile aviation industry, as the aviation sector would play a key role in the economic recovery process post pandemic.


CSL Stockbrokers Limited, Lagos (CSLS) is a wholly-owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission.

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Coronavirus

FG approves N8.49billion to procure COVID-19 testing Kits, others

The fund is to procure 12 items in various quantities to strengthen the testing for COVID-19.

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President Muhammadu Buhari's full speech at China-Africa Extraordinary Summit on June 17, 2020

The federal government has approved N8.49 billion to procure 12 items in various quantities to strengthen the testing for COVID-19 by Nigeria Centre for Disease Control (NCDC).

The approval was given during the 11th virtual meeting of the Federal Executive Council presided over by President Muhammadu Buhari on Wednesday.

The approval was based on a memorandum presented to the council by the Minister of Health, Osagie Ehanire.

He was joined at the post-FEC press briefing by the Minister of Information and Culture, Lai Mohammed; and the Minister of Environment, Muhammad Mahmood.

He explained that the approval was made to further equip the NCDC to respond appropriately to the community transmission phase of the pandemic.

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Coronavirus

COVID-19: Russia to start mass inoculation of vaccine this month as it insists on its safety

The vaccine is said to be undergoing Phase 3 trials, which is the final stage.

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COVID-19: J&J starts vaccine trials on humans after success on monkeys

Russia has announced that it was going to start mass vaccination of the world’s first COVID-19 vaccine this month before the completion of clinical testing. This is just as it waved off concerns by the international community and some scientists about the safety of the vaccine.

These views were made known by the Russian Health Minister, Mikhail Murashko, on Wednesday, August 12, 2020, during a press briefing.

The Health Minister in his statement said, ‘’Western colleagues, who can sense the competitive advantage of the Russian drug, are trying to express some opinions that are completely unjustified in our view. This vaccine is a platform that is already well-known and studied,” he said, adding that other countries have developed antidotes under accelerated testing programs.’’

READ MORE: COVID-19: WHO warns there may never be an immediate solution to the virus

Murashko also said that the authorities plan to start inoculating medical workers and other risk groups within 2 weeks on a voluntary basis while pointing out that the vaccine will be made available to the general public from October.

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Nairametrics had reported yesterday that the Russian President, Vladimir Putin, in a televised meeting, announced that Russia has registered the first COVID-19 vaccine in what they see as a propaganda coup amid the global race for the development of a vaccine against the coronavirus disease.

This announcement has raised a lot of international concerns with the German Health Minister, Jens Spahn, saying on Wednesday, that Russia’s COVID-19 vaccine has not been sufficiently tested, adding that the aim was to have a safe product rather than just being first to start vaccinating people.

He said in a radio chat that it’s not about being first but rather about having an effective, tested and safe vaccine.

Experts have expressed their concerns over Russia’s decision to grant approval before the final trials of the vaccine have been completed.

READ MORE: WHO gives condition for approving Russia’s COVID-19 vaccine as the vaccine gets a name

He said that as much as he will be pleased to have a good vaccine for the virus, he pointed out that the Russians are not disclosing much about this vaccine.

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This vaccine which is developed by Gamaleya Institute in collaboration with the Defence Ministry and the Russian Direct Investment Fund (RDIF), is said to be undergoing Phase 3 trials, which is the final stage.

However, a World Health Organization (WHO) database still lists the vaccine as still only in Phase 1 trial, which is the earliest stage.

The RDIF said that it can produce over 500 million doses of the new vaccine in a year in 5 countries, just as it disclosed that a minimum of 20 countries are currently interested in having access to these vaccines.

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The WHO had earlier revealed that it is currently discussing with Russia and pointed out that in granting prequalification of the vaccine, a detailed review of data from clinical trials will be required.

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Economy & Politics

FG completes 11 projects to drive Digital Economy

The government has been pushing the Digital Economy in a bid to diversify economic productivity.

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FG completes 11 projects to drive Digital Economy, FG orders NIPOST to stop cash transactions , Pantami moves to ban automatic voicemail service by telcos  , Why Nigeria’s Data woes may not end soon , Pantami reacts to CBN’s ATM fee cut, keeps mute on directive to cut data cost , Pantami condemns FIRS move to collect stamp duty, MTN, Airtel, others disregarding Pantami’s voicemail, data directives on all front , FG warns State governments against RoW charge increase, FG reiterates commitment towards implementing broadband strategy ,FG reiterates commitment to 75% broadband penetration in 5 years 

The Federal Ministry of Communications and Digital Economy announced that it has completed 11 projects to drive its Digital Economy programme.

This was announced by the Minister of Communications and Digital Economy, Dr. Isa Pantami, during the phase 2 commissioning of Nigeria’s Digital Economy drive.

The Nigerian Government has been pushing the Digital Economy in a bid to create growth and diversify economic productivity in the nation, starting with the Digital Economy drive which was added to the portfolio of the Ministry of Communications.

READ MORE: Nigeria’s broadband penetration rises, yet internet remains slowest in the world

Nairametrics reported last month that the Nigerian Communications Commission (NCC) also approved the creation of a Digital Economy Department, which will be responsible for promoting the digital economic agenda of the federal government. The department will renew the commission’s strategy for delivering its programmes and policies, and give the necessary push to promote the national digital economy.

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The projects were launched with the supervision of the Ministry of Communications and Digital Economy and would be operated by the Nigerian Communications Commission (NCC), National Information Technology Development Agency, (NITDA) Nigerian Postal Services (NIPOST ) and The Universal Service Provision Fund (USPF) and would be located nationwide.

READ ALSO: NCC issues 10 new VAS licences in 2019, projects market to hit $500 million 

The 11 projects are:

  1. Emergency Communications Centre (ECC) llorin, Kwara State.
  2. Emergency Communications Centre (ECC) Calabar, Cross River State.
  3. School Knowledge Centre (SKC), Gombe State.
  4. Information Technology Innovation Centre, Kogi State.
  5. Tertiary Institution Knowledge Centre (TIKC), Delta State.
  6. New Neighborhood Post Office, Delta State.
  7. Remodelled National Mail Exchange Centre, Bayelsa State.
  8. e-Health/Data Sharing Centre, Bauchi State.
  9. Virtual Examination Centre, Borno State.
  10. Information Technology Capacity Building Centre, Jigawa State.
  11. Information Technology Capacity Building Centre, Imo State.

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