(PART 5) COVID-19 EXPOSES THE BRITTLE BACKBONE OF THE NIGERIAN AVIATION INDUSTRY – ROLAND IYAYI

GOVERNMENT INTERVENTION / BAILOUT – STRUCTURE & CONTENT

In solving a complex problem, there is a need to define the problem, identify the underlying issue(s), embrace all its simple facets and understand the peculiar nuances of each facet.

Then determine the inter-relatedness or otherwise of the facets, aggregate these different facets in order to appreciate the best fit of the whole and finally proceed to resolve the issue(s).

The aviation conundrum is a seemingly complex problem. This is so, not only because of the highly interdependent and interconnected nature of its different players, but more importantly because a problem with one is a problem for ALL, as is evident with the near failures of all the government agencies in the industry absent the airlines.

In other words, solving the problem of the aviation industry, which indeed is vitally important, transcends providing the occasional intervention fund to the industry or bailout for the airlines or indeed setting up a new national carrier, without first of all addressing the underlying issues in the industry.

Meanwhile, any attempt at dealing as usual, which typically involves addressing the various symptoms of the problems in a piecemeal manner, pitting one part against the other as in divide and rule to conquer, rather than addressing the root cause, will only amount to a futile exercise and a complete waste of resources, especially during this lean times.

The COVID-19 pandemic has clearly stress-tested and is still stress-testing the Nigerian aviation industry and has undoubtedly exposed its backbone to be extremely brittle, lacking the necessary grit to hold out in an emergency, imbued with no true character and lacking the moral courage to own up to its deficiencies.

Several past governments including the present government have attempted to address the aviation conundrum in their own way.

But of course any government intervention is only as good as the foundation upon which it is premised. A problem solving adventure lacking a clear definition and understanding of what the problem really is, will amount to nought.

That has been the industry experience to date!! In 2005 after a spate of aircraft accidents, former President Olusegun Obasanjo led government set up a Presidential Task Force (PTF) on Aviation under the able leadership of Air Marshall Paul Dike.

The Presidential Task Force’s Terms of Reference (TOR) were quite exhaustive and all encompassing, with the powers to expand remit based on findings and no off-limits, and then to provide a report back to government within three months.

The membership of the PTF cut across a wide spectrum of the economy, including stakeholders from the military, banking, construction, real estate, and of course aviation. With an inevitably expanded scope, the PTF rounded up its work in six months, provided the government with an equally exhaustive three volumes of reports, covering all areas of the aviation sector handled under various sub-committees.

Each sub-committee had sittings and invited notable industry figures then past and present to make submissions and in some cases presentations to the whole PTF.

The PTF had several recommendations and majority of these were accepted by the government and formed the basis of a White Paper in 2006.

Fast forward over a decade, the present government constitutes another PTF, at the insistence of the Airline Operators of Nigeria (AON), to discuss the same issues already discussed in 2005 and captured in a 2006 report, culminating in a White Paper containing recommendations accepted by government since 2006.

Unfortunately, almost everything discussed in 2017 were already identified in 2006 and dutifully documented in a government White Paper locked away in some drawer in a government office since then.

The relevance of this long-winding narrative is to show that it is not as a result of not talking and identifying the problems, but the lack of the political will to do the right thing, purely borne out of selfish interests of the faceless “powers that be”, is the bane of the industry.

Our understanding is that government is a continuum and that the people’s interests are paramount. But unfortunately, the opposite is the norm. Incidentally, all the issues being raised today were already part of the recommendations accepted by the government and incorporated in the White Paper of 2006.

Again, our understanding of the process of governance is that the White Paper more or less should form the basis of enacting the enabling law. So, who dropped the ball and whose interests are being pursued?

The pivotal role aviation plays in the socio-economic and political integration of the country cannot be over-emphasized.

As a matter of fact, the reason airlines were embraced by most governments after the 1944 Chicago Convention, aside from the sovereignty issue, was to provide a major social service for the political integration of the country. In the current dispensation, aviation is a major enabler of economic growth, providing unfettered market access, encouraging Foreign Direct Investments (FDI’s) and any country can only subordinate the sector at its own peril.

The major beneficiaries are NOT the airlines, considering the thin or non-existent margins, but the consumers of their services in other industries such as in health, telecommunications, construction, agriculture, mining, oil & gas, finance, etc., and ultimately the national economy.

At the onset of the COVID-19 pandemic, with the major disruptions to the domestic aviation market, airline operators have been counting the mounting losses they are faced with and there has been talk of a possible government intervention or bailout yet again.

But realistically, is it fathomable or even conceivable that the government can afford to bailout the industry today, given the state of the economy and other competing interests? Well like it is said, nothing is impossible.

But taking a hard look at the various economic indices would suggest otherwise and that this certainly could not be the priority of government.

Before the onset of the pandemic, our economy was already tottering on the brink, with the government still trying to grapple with the oil price slump and market glut, with a GDP growth of only 2.3%. The International Monetary Fund (IMF) has since revised our GDP growth to 2.0%, given the US$3.5 billion loan we are seeking or have obtained? Importantly, our Debt Service-to-Revenue ratio, a major developmental index, currently sits at 60%, probably worsening considering the slump and glut in the international oil market.

Wole Shadare