‘Aviation contributed $0.3bn to Nigeria’s GDP in 2016’

  •  75% traffic from Lagos, P/H, Abuja
The aviation sector in Nigeria contributed $0.3 billion to the country’s Gross Domestic Product (GDP) in 2016, according to the Chief Executive Officer of Kitari Consult, a management and aviation consulting firm, Ali Magashi.
This, however, indicated a drop from $0.7 billion the previous year. He said air transport directly employs over 5.5 million people and contributes $425 billion to global GDP, which is more than several members of the G20.
Magashi stated this in a paper he delivered at an aviation forum.
He also said that 15,232,000 passengers went through Nigerian Airports in 2016, adding that there were approximately 266,000 aircraft movements through Nigerian airports in 2016.
Aviation’s GDP contribution is around one and a half times the size of the pharmaceutical industry ($270 billion GDP) or the textile industry ($286 billion GDP) and a third bigger than the motor production industry ($322 billion GDP).
Magashi, who is also a consultant to World Bank on Land Reforms, disclosed that the aviation industry is indispensable to socio-economic development both globally and locally.
 He added that aviation employs over 57 million people globally and generates economic activities above $2.2 trillion dollars yearly.
In Nigeria, the aviation sector has grown rapidly in recent years, but has been weighed down by numerous challenges. Currently, the sector can be characterised under airport infrastructure, airline operations, regulatory framework and others.
Magashi lamented that there are 23 airports in Nigeria of which 19 are owned and managed by Federal Airport Authority of Nigeria (FAAN), depicting an industry with high government involvement.
Besides, he noted that 75 per cent of passenger traffic is from three airports – Lagos, Port Harcourt and Abuja.
On airline operations, he stated that current economic regulation require a paid up capital of N500 million for domestic operations, N1 billion for regional operations and N2 billion for international operations, which is insufficient.
Currently, only eight airlines are in operation, with two others accounting for 89 per cent of seat capacity.
Strategies, he said, are being developed to strengthen the role of regulators in aviation with an increasing focus on safety and consumer protection, hinting that the aviation master plan has been developed to provide strategic focus for the industry.
He reiterated that the aviation industry in Nigeria is constrained by numerous challenges, which have resulted in value losses, increasing debt and airline failures.
His words: “Nigerian airline carriers spend on average 40 per cent of their expenditure on fuel, whereas global counterparts spend about 29 per cent on average. In Africa, aviation fuel is about 20 per cent more expensive, when compared with other continents.”
The high tariff costs for imported airline such as spare parts, belts, x-rays, equipment, he noted, are burdensome, especially for handling companies.
He reiterated that lack of Maintenance Repair Overhaul Organisations (MROs) in the country, which means required maintenance checks such as C1 to C8, are all done abroad, resulting in huge costs.
He noted that there have been a few too many plane crashes, emergency landings and near collisions in the Nigerian industry over the last 10 years.
These incidents, he added, were mainly due to safety-related issues, including inadequate infrastructure, human error and poor emergency response guidelines, procedures and capabilities to combat air disasters.
Many airports in Nigeria, he said, are in a state of disrepair, adding that basic infrastructure such as adequate runway capacities and terminal facilities are often lacking at major airports in the country majority of which are significantly underutilised.
Wole Shadare