From the fastest growing sector in Nigeria in real Gross Domestic Product, GDP terms in 2019, up by 13.2% year on year from N73.8bn in 2018 to N83.5bn, the sector was destined for greater things. Fast forward to 2020 and as the effect of the novel COVID 19 pandemic continues to bite harder, the sector is battered, on its knees and gasping for breath.
According to the Minister of Aviation, Hadi Sirika’s briefing to the Presidential Task Force PTF on coronavirus, Nigeria currently loses N21bn/ month. In addition, data from International Airline Transport Association (IATA) estimates that the coronavirus outbreak would cost Nigeria’s aviation sector US$994.0m (N357.8bn) in Revenue, 125,370 jobs would be lost, and the overall economy would lose US$885.0m (N318.6bn) in form of nominal GDP contribution from the sector.
The aftermath policies of the Federal Government in the bid to contain the spread of the coronavirus resulted in the shutdown of the Nigerian airspace since March 22, 2020, and just a few days ago, the Presidential Task Force (PTF) on coronavirus announced a 4-week extension to the ban on both local and international air travel.
In light of the above, CSL Stockbrokers Limited, Lagos (CSLS), a wholly-owned subsidiary of FCMB Group Plc, regulated by the Securities and Exchange Commission has called on the Federal Government to offer some palliatives to the sector as is the case in other parts of the world.
“In our view, the Federal Government needs to provide dedicated funding support in the form of loan facilities and tax breaks to support the very fragile aviation industry, as the aviation sector would play a key role in the economic recovery process post-pandemic.
Failure by the Government to provide adequate support for the industry will lead to several airlines shutting down and massive job losses within the sector
The crisis in the aviation industry is a global phenomenon that resulted from the need to curb transmission of the global pandemic across countries. However, the difference in the case of Nigeria is the dearth of palliatives to ease the crisis in the sector. For example, in the United States, the historic US$2.2tn fund includes a US$61.0bn relief package for airlines. In exchange, they promised to keep their thousands of employees through the crisis.
In Europe, governments have made available loans for airlines, although countries like the United Kingdom have instructed that the airlines must have exhausted other sources of funding. In Nigeria, the situation appears different, while the Central Bank of Nigeria, CBN has announced several stimulus packages in union with the FG, the attention seems to have been directed towards, health and pharmaceuticals. This comes despite the request made by the Minister of Aviation for stimulus measures to support the industry” CSL stated.
