Business
The Aviation Industry Lost Over N63billion to COVID19
A report by the Ministry of Aviation has shown that the air transport value chain as the hardest hit to the deadly virus, the report said over 90 percent of operations and activities were adversely affected resulting in monthly losses valued at N21 billion.
The report sighted by The Nation indicated that the ravaging effects of the virus in the sector has forced government to consider working out a recovery plan aimed at providing financial support where necessary to sustain air connectivity for passenger operations and cargo flights.
Besides, the financial support proposed for the industry, the report indicated that the government is rejigging its plans to fast track the establishment of a private sector driven national carrier, which is expected to generate significant revenue and contribute to Gross Domestic Product (GDP).
The project is expected to create activity in the wider economy for suppliers, importers, exporters and manufacturers.
“The objective and guiding principles is to save existing aviation industry organisations and jobs, through a targeted stimulus package as well as fast-track the establishment of a private sector driven national carrier.
“There is a need to strengthen the aviation sector so that it survives and creates job opportunities and supports general economic activity including transport logistics.
“The project elements will include extend grant support, including pay roll support to the aviation industry including airlines, handlers, caterers and related services,” the report said.
According to experts familiar with the matter, the report proposed the provision of single digit soft loans, with long-term repayment plan, deferred payment of taxes and filing dates.
“The government is working to ensure the removal of Value Added Tax from airline tickets as approved by Federal Executive Council. It seeks the provision of COVID-19 tests for all passengers and crew.
“It seeks waiver of airport rent fees to all airport operators for the duration of the lock down plus one month. Facilitate the processes for establishing of private sector driven national carrier with the Federal Ministry of Aviation as the implementing structure,” the report added.
The report put an estimated N27 billion as a bailout package for the sector, which should be delivered within 12 months.
Speaking on the report, President, Aviation Safety Round Table Initiative (ASRTI) Dr. Gabriel Olowo described the grant as paltry, saying it would do very little to address airlines and their allied losses. Although he commended the move, he nevertheless stressed that the industry’s need should be equitably prioritised.
He advised that the identified seven project elements in the aviation industry should not go together in a swoop under the N27 billion estimated cost, urging the government to prioritise those that are key to a robust aviation sector in the country. –
“Individual projects that are not COVID-19 related should attract special focus and special funding. All the project elements are key to a robust aviation sector in Nigeria. The government’s action is commendable. It is very necessary and is a good attempt, given the national income constraints during the year,” Olowo said.
“The $58.7 million is a paltry sum to cushion total negative impact of COVID-19 in quarter two and quarter three of 2020 and may not sufficiently address airline and its allies loss of business.
“The industry needs must be equally prioritised. Project elements should not be ambiguous but clearly defined,’’ he said.
“Whereas Lagos Airport, which constitutes more than 40 per cent of FAAN income , is suffering huge expansion neglect requiring a deliberate policy to make it a West African Hub is needed to stimulate non aeronautical revenue.
“If Nigeria fails to develop Lagos Airport into a regional Hub for West Africa, Ghana, Cote D ‘ Ivoire and Togo will pursue hub status for Accra, Abidjan and Lome.
“Hub competition with Lagos Airport by other Nigerian airports can never thrive as much as Lagos Airport because of its geographical location.”
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The Petroleum Products Marketing Company, a subsidiary of the Nigerian National Petroleum Corporation, has increased the ex-depot price of Premium Motor Spirit, also known as petrol, to N155.17 per litre from N147.67 per litre Punch reports,
The PPMC disclosed this in an internal memo with reference number PPMC/C/MK/003, dated November 11, 2020, and signed by Tijjani Ali.
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The memo, a copy of which was seen by our correspondent, said the new ex-depot price would take effect from Friday.
The ex-depot price is the price at which the product is sold by the PPMC to marketers at the depots.
In its PMS price proposal for November, the PPMC put the landing cost of petrol at N128.89 per litre, up from N119.77 per litre in September/October.
It said the estimated minimum pump price of the product would increase to N161.36 per litre from N153.86 per litre.
The National Operation Controller, Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi, in a telephone interview with our correspondent, said the over N7 increase in ex-depot price would translate into an increase in pump prices.
“Crude oil price is going up,” he said, noting that the Federal Government has fully deregulated petrol prices.
Following the deregulation of petrol prices in September, marketers across the country adjusted their pump prices to between N158 and N162 per litre to reflect the increase in global oil prices.
Petrol price band had also risen from N121.50–N123.50 per litre in June to N140.80-N143.80 in July and N148-N150 in August.
The Minister of State for Petroleum Resources, Timipre Sylva, said in September that the government had stepped back in fixing the price of petrol, adding that market forces and crude oil price would continue to determine the cost of the product.
The Dangote group has reacted to a recent report published on Bloomberg that their cement company was solely exempted from the Land Border Closure by the Nigerian government.
The report revealed that Dangote Cement was still able to export products despite the land border closure put in place by the Federal Government thus gaining an ‘unfair’ advantage.
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Responding to the development in a statement sent to POLITICS NIGERIA, signed by Timilehin Oyedare, the cement giant disclosed that the report was ‘misleading’.
“Contrary to reports by Bloomberg that Dangote Cement was granted sole approval to export cement through the land borders, information has emerged that other companies also got approval to export through the land borders. Nigerian Customs Service has reportedly revealed that a gas company have also received presidential approval to move goods across the land borders.”
“Joseph Attah, the spokesperson for Nigerian Customs Service, was said to have clarified on phone from Lagos.”
“Dangote Cement and other companies in July, 2020 got partial special dispensation to export their products with certain sequence of crossing at Ilela land border in Sokoto State and Ohumbe land border in Ogun State, the company clarified.”
The Group Chief, Branding and Communications, Dangote Group, Mr. Anthony Chiejina, said the report is misleading and mischievous because it focused only on Dangote Cement as the sole beneficiary of the partial special dispensation.
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