The Naira has remained under huge pressure against the greenback owing mainly to the import-dependent structure of the Nigerian economy. While Agriculture, Mining and Oil & Gas sectors attract the largest share of dollar inflows, other sectors such as Aviation remain import driven as the absence of an MRO facility in Nigeria continues to cost the country billions of dollars annually.
The Federal Airports Authority of Nigeria (FAAN) at its National Aviation Conference in Abuja on Tuesday, announced that Nigeria spent US$2.5bn (about N1.04tn at the official exchange rate of N415.63/$) in 2021 on Maintenance, Repair and Overhaul services of Nigerian aircraft and other facilities.
Meanwhile, the Federal Government, as part of its aviation roadmap, has been making efforts to establish an MRO facility in Nigeria. The Federal Ministry of Aviation recently acquired 12,000 hectares of land in Abuja for the development of the facility and other aviation projects. In his address at the conference, the Managing Director of FAAN, Rabiu Yadudu, noted that the project was expected to save FX spent on training human resources and flying machines for checks abroad and to earn foreign exchange when other countries can send their machines to the country for checks and also send their manpower for training in Nigeria.
Also speaking at the event, the Director-General, Nigerian Civil Aviation Authority, Musa Nuhu, noted that domestic flight operations in Nigeria had recovered from the effects of the COVID-19 pandemic on the sector. He, however, noted that the crash of the Naira against the United States dollar and the rise in global crude oil prices, which triggered an astronomical increase in the price of aviation fuel, have caused more trouble for the aviation sector lately.
For the Nigerian government, the dream to actualise the establishment of a Maintenance, Repair and Overhaul facility remains quite uncertain in the face of severe fiscal challenges. On 11 January 2021, the Federal Ministry of Aviation announced the Consortium of AJ Walters Aviation Limited, EgyptAir Maintenance & Engineering (EGME) and Glovesly ProProject Limited as the preferred bidder to establish the Maintenance, Repair and Overhaul Centre but we are not certain that much progress has been made since then.
However, 7Star Global Hangar, an indigenous firm, was in June 2021 granted. MRO certificate to operate, after investing c.US$10 million on equipment, tools and training. When operations begin, 7StarGlobal will be the first independent privately owned MRO in West and Central Africa. For Nigeria, the employment potentials from the MRO are enormous, and the benefit to the entire country is evident.
CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.
Leave a Reply