- Hadi Sirika, Nigeria’s former Minister of Aviation, addressed questions about the controversial Nigeria Air Project during an interview on Arise TV.
- Sirika revealed that Ethiopian Air owns 49% of Nigerian Airways Ltd, while private Nigerian companies hold the remaining shares. He justified this ownership structure and emphasized that the majority of the airline must remain Nigerian-owned.
- He discussed tax incentives initially included in the project but stated that they had been removed, clarifying that Nigeria Air would operate under the same tax laws as other airlines.
Hadi Sirika, Nigeria’s immediate past Minster of Aviation under the Buhari Administration responded to questions related to the controversial Nigeria Air Project.
Nigeria Air was launched on the last day of the Buhari administration attracting criticism from most Nigerians who alleged foul play.
The Minister appeared on an Arise TV program “Thisday” hosted by Reuben Abati on Sunday and responded to some of the most controversial issues regarding the airline project.
Nairametrics collated some of the key talking points of the interview.
On how much of Nigerian Air does Ethiopian Air own
He stated that Ehtiopian Air owns 49% of Nigerian Airways Ltd, while private Nigerian companies while the government owns 5%. According to him, the government kept the 5%.
- He also indicates businesses are allowed to own 100% of businesses so he does not see any reason why Ethiopian Airlines should not own as much as 49%.
- He also stated that the total capitalization of the airline was $200 million and that Ethiopian Airlines was to pay 49% which is $98 million while Nigerians will own the rest.
- In terms of who manages what he claimed that “before we found the investors all the cabin crew, engineers will be Nigerian. Nigerian first” but that the owners of the airlines will determine who the management staff will be.
- But what we put in place is that “95% of the majority of the airline must remain Nigerian.
On tax incentives
He claimed tax incentives were included “in the initial business case” and also mentioned that because “the aviation sector was the fastest growing in the economy.”
- He stated that the minister of finance budgeting and national planning thought that “by giving them tax incentives that will enable them to participate and contribute to the GDP of Nigeria” thus the tax incentives.
- He however also stated that the tax incentive has been removed “Currently there is no tax break for Nigeria Air Limited, they will operate with the same tax laws that everyone is operating but will also operate within the same economic zone as everyone is operating” he concluded.
- He also stated that the airlines will not have any tax advantage given to the airlines because the government owns 5% of the business.
On why they used a chartered airline and not three aircraft as promised
He claimed what they had said was that for “the takeoff of the airline three aircraft in the name of Nigeria Air will commence the operations once the AOC is ready” but that an aircraft had to come in as part of their marketing strategy which he said was the wishes of the owners of the airline.
- He confirmed that the aircraft is internationally registered was correct and that they could not have kept an airline on the ground when it was not ready to take off.
- He further claimed the “Ethiopian People are masters of the game” suggesting they purposely did not keep an aircraft air until they start operations.
On why we decided to bring Ethiopian into the matter instead of using Arik Air or Aero
He claimed the AMCON exposure to Arik Air which was N250 billion and that Arik also owed N30 billion to other contractors thus the indebtedness means it was a wrong idea and thus could not use the airline due to this.
- At the time all of the Aircraft Arik had over the world were “held (seized) because they were owing”
- He also claimed using Arik Air and Aero for this Nigeria Air project would have had them subjected t litigation.
- “The best idea was to have an airline that is private sector driven with 95% private sector and 5% government-owned” so that “government will have a skin in the game and people will trust us” he concluded.
On why they rushed they launched the project rather than leave it for the new administration
He responded by claiming that it was the decision of the consortium to do the unveiling as part of their marketing strategy.
- He stated that “he was invited and that he went there”
- He claimed the airline businesses were not shrouded in secrecy as alleged as they were several conferences held in which Nigerian local airline owners participated.
- He also claimed they were a bidding process that they will know about and that people participated in it and as such there was no secret.
- “Bidding was done transparently and it was deposited on the website during the bidding”. He also claimed Ministry of Finance, budgeting and Planning, aviation, and the attorney general were members of the valuation team.
- He also claimed regulators gave them compliance certificates.
On Corporate Governance for Airlines
He stated that airline regulator NCAA will soon release regulations addressing corporate governance issues which includes
- the appointment of an independent director on the board of the airline.
- that they must be audited by one of the Big 4 audit firms to ensure accountability.
- He also claimed he built the culture of giving licenses professionally under te regime of Buhari.
On lobbying and alleged soliciting for shares
Hadi Serika perhaps made some of his most controversial comments stating that the owner of United Airlines had “begged” him to stop the Nigeria Air project.
- “He came to my house when I was ill (for a meeting) and begged me to please stop the Nigeria Air project and I told him why not go and buy shares in it.”
- He accused the Chairman House Committee on Aviation, Hon Nnolim Nnaji of asking him for 5% of the airline.
- “He asked me to please indulge him and give him 5% of the airline. I told him in private that it belongs to the owners and that they will be willing to give him if he has the money”
As expected, Rueben Abati sought clarification of the comment and asked a follow-up question “You are asking that honorable Nnaji asked for 5%. Is it 5% of the fire truck or of Nigeria Air?
Sirika response
You know I record all my things anyway. He asked me that I give him 5% of Nigerian Air to carry him along with his people. I said to him that time honourabe you did not understand me, this is a bidding process that has taken place and some people won.
- You should go to those people and ask them for the 5%. And I want to assure you that even the 5% held by the FG will go to market and he should get his money ready to buy for himself and his people according to him.
Abati asked again in other words Honourable Nnaji and his colleagues in the House of reps in the aviation committee were asking to be bribed before they could support the Nigerian air project
- Sirika responded, “No, no in other words, let’s be fair, honourable Nnaji did not say other members, he said him and his people, his people could be his family, his members, could be leadership, I did not know what he means.”
- He also accused Nnaji of not following due practice of the Nationa Assembly after hearing people on a complaint but that he read the “riot act” without proper investigation. His claims suggest the position of Nnaji was predetermined.
On the N12billion Fire Fighting Trucks
Serika confirmed that the airline ordered fire trucks three years ago at a cost of N1.2 billion per truck which amounts to N12 billion for 10 of them.
- He claimed the fire fighting trucks were “specifically manufactured for Nigeria” and that it is “not off the shelf”
- He also claimed the cost also included 1% VAT, 5% WHT, custom duty, transportation, training, spares contractor markups, cost of funds, and exchange rate”assuming a $600 million figure for the cost of the airline.
- He also said they got 5 more fire trucks after the initial procurements
Optics
Hadi Serika’s comments on the Nigeria Air project are likely to even throw up more questions than answers especially his allegations that a House of Rep member solicited 5% of the shares of Nigeria Air.
- His comments around the ownership of Nigeria Air will also be scrutinized especially the fact that Ethiopian Airlines owns 49% of the company following a bidding process.
- Critics will likely demand more information on the bidding process, the cost of the fire trucks, and other details of the project.
- We will also not be surprised if the Tinubu administration commences an investigation into the project as it continues to win public support for its recent actions on the economy.
