Stakeholders in the Nigerian aviation industry have attributed the reluctance of foreign financial institutions and global aircraft lessors to invest in the country over the last decade to governance concerns, unresolved disputes, and weak investor protections.
They warned that unless the current situation changes, efforts by the Minister of Aviation and Aerospace Development, Mr Festus Keyamo, to attract foreign investors may be jeopardised.
Speaking with journalists in Lagos earlier in the week, aviation analyst Lanre Bamgbose said that the issue should be viewed from a broader commercial and institutional perspective, rather than targeting any specific organisation. According to him, investors are concerned about the governance framework guiding commercial transactions in the country.
For instance, he said that the ongoing legal tussles between Arik Air shareholders and the Asset Management Corporation of Nigeria had sent the wrong signals across the global aviation finance community.
Bamgbose explained that financial institutions such as the European Credit Agency, the United States Exim Bank, Export Development Canada, and the Pacific Export Finance Corporation, among others, are aware of the challenges and government policies in the sector and would always be wary of the situation before investing in the country.
He said, “As a businessman, if I were to invest in your market, for instance, I want to look at the governance structure of commercial transactions in the country. Let us go back to history, and for due process reasons, I do not want to comment particularly about the company that I worked for in the past. What happens when things go wrong? How are contracts enforced? How are disputes resolved?
“However, I am yet to find any significant investment by anybody in the leasing world, particularly the core European side and the Americas, in Nigeria since 2010.
At least, I am privy to particular transactions with the European Credit Agency and the US Exim Bank, Export Development Canada, and the Pacific Export Finance Corporation.”
Also commenting on the issue, an engineer with the defunct national carrier Nigeria Airways, Mr Charles Amokwu, said that the reduced interest of global financiers and lessors in the country had slowed aviation growth across the sub-region. He pointed to deficits in fleet renewal, aircraft acquisition capacity, and airport and ancillary infrastructure development as some of the outcomes of the reluctance by the financiers and lessors.
Amokwu noted that without access to competitive long-term financing, operators within the sub-region often depend on short-term and higher-cost arrangements, stressing that this is reflected in ticket pricing, operational sustainability, and sectoral stability.
He insisted that rebuilding investor confidence would require more than diplomatic engagements and high-level meetings with manufacturers such as Boeing, Airbus, Bombardier, and other aircraft manufacturing companies, as Mr Keyamo had done in recent times. The industry expert argued that accountability and the handling of past transactions would go a long way in ensuring conviction.
Like Bamgbose, Amokwu emphasised that Nigeria must undertake a comprehensive review of past contractual disputes, strengthen its aviation leasing framework, enhance judicial enforcement of commercial agreements, and ensure respect for creditor rights.
“If you are asking international financiers to bring money back into your market, the first question they will ask is: what happened to the funds previously invested?
“A transparent clean-up of legacy issues, coupled with credible regulatory reforms, can gradually reposition Nigeria as a bankable aviation market,” he said.
