Home Aviation & BusinessMore Questions On Transaction Integrity In Nigeria’s Aviation Industry
More Questions On Transaction Integrity In Nigeria’s Aviation Industry

More Questions On Transaction Integrity In Nigeria’s Aviation Industry

Since the emergence of the current democratic dispensation in 1999, the level of integrity in business transactions, interactions, agreements and contracts implementation as well as respect for laws and morality in various dealings that occurred in Nigeria’s aviation industry, has left more questions than answers.
Today, the coronavirus pandemic is disrupting the operational dynamics of every sector. This does not however, change the fact that several basic anomalies in Nigeria’s aviation industry predate the novel virus. Which anomaly is new? Is it the floating of an airline without a good business plan? Is it disrespect for good corporate governance requirements by players? Is it poor regulation of the aviation industry? Is it the generous granting of permits to foreign airlines to operate to destinations that local airlines ought to operate? Is it undue political interference in the industry’s professional operations? How about running the sector without existence of boards of agencies in violation of the Nigerian constitution? Is it the piling up of debts for generations unborn to pay? Is it the overbearing charges and taxation by the agencies or airlines’ unethical business conduct?
Which of these was introduced to Nigeria’s aviation industry by covid19 pandemic? Who knows what will now happen to the issue of unclear employment status and contract staffing under the guise of outsourcing in organizations? Covid19 has now provided a license. Right?
The sector’s growth and development has been challenged by issues of transaction integrity. For instance, duly signed contracts and agreements between parties have featured controversies at the middle of implementation over what the agreement originally was. Indebted service consumers still argue with service providers over how much is being owed in an era of ICT and automation of processes.
There was the controversial auction of the defunct national carrier, Nigeria Airways in 2003 and subsequent corruption-infested efforts to regenerate a national airline in form of Nigerian Eagle, Virgin Nigeria, Air Nigeria and Nigeria Air. Each episode with a faulty foundation, was akin to attempted use of a basket to fetch water from the stream.
Then, came the controversial Build, Operate and Transfer (BOT) Murtala Muhammed Airport Terminal2 deal. There was a concession agreement between the management of Bi-Courtney Aviation Services and Federal Airports Authority of Nigeria (FAAN).
Up till now, Bi-courtney has maintained that under the agreement, “The Federal Airport Authority of Nigeria (FAAN) offered Bi-Courtney a 36-year lease in a letter dated 12th of October 2006 and an agreement was duly signed on the 2nd of Feb 2007 by the Minister of Aviation. The agreement was further confirmed at a meeting held on 7th of July 2009 chaired by the former President of the Federal Republic of Nigeria – His Excellency, Late Mallam Umaru Musa Yar’adua, GCFR, in attendance with the Honourable Minister of Aviation, Secretary General to the Federal Government, Attorney General of the Federation Honourable Minister of Justice, Honourable Minister of Finance, MD/CEO of FAAN and the Chairman of Bi-Courtney amongst others”.
FAAN has maintained that the agreement was for 12 years and not 36 years. Bi-courtney has also been alleging that the agreement includes a handover of the MMA General Aviation Terminal to Bi-Courtney. In the year 2020, the identity of this deal has been encapsulated in one phrase “protracted litigations.” The integrity of the transaction is yet to be clarified.
Then, came the N19.5 billion Aviation Intervention saga of 2009 and the bullet proof car mess of 2011. The special fund meant for training of key aviation personnel equally produced controversy and trainings were denied. By 2013, huge loans had been incurred for airports infrastructure without stakeholders’ consultation.
$500 million had been borrowed for facilities upgrade in Nigerian airports and under the Budget 2019, Minister of Aviation, Hadi Sirika raised a $461 million additional loan request for same purpose. What is the status of and or plan payment of these loans?
Later, the Minister announced that there was N47.43 billion naira (USD132 million) in the 2019 budget for a proposed national airline, Nigeria Air. The government approved the funding for the project as part of the 2019 Appropriation Bill, which President Muhammadu Buhari signed into law on May 28 before starting a second five-year term in office on May 30, 2019.
This is 2020. Where is Nigeria Air? Where is transaction integrity?
The aviation agencies have been operating for years without existence of boards as provided for by the constitution. The Nigerian Civil Aviation Law of 2006 provides for the appointment of members of Governing Boards of Nigeria’s aviation agencies.
Part 111, Section 6 of the Nigerian Civil Aviation Law 2006 says the Chairman and members of the Board of Nigerian Civil Aviation Authority (NCAA) for instance, “shall be paid such allowances, expenses and benefits in accordance with the extant Federal Government Financial Guidelines.”
7. “The Board shall
(a) fix terms and conditions of service, including remuneration of the employees of the Authority in accordance with the provision of Salaries and Wages Commission.
(b) receive and review annual reports for the management of the Authority and submit same to the President and the National Assembly, through the Minister, not later than 30th June in each year. The report shall be on the activities of the Authority during the immediately preceding calendar year; and shall include a copy of the audited accounts of the Authority for that calendar year.
(c) submit not later than 30th September in each year to the Minister, an estimate of the expenditure and income of the Authority for the next succeeding year; and
(d) cause to be kept, proper accounts of the Authority in respect of each year and proper records in relation thereto and shall cause the accounts to be audited not later than six months after the end of the year by auditors appointed from the list and in accordance with the guidelines applied by the Auditor-General of the Federation.”
The emerging questions are:
1. Who has been performing the above functions of the Governing Boards at the agencies since the year that the former boards were dissolved?
2. In the absence of the boards with constitutional functions, has the individual or group of persons that have been performing these functions not been violating the law?
3. Is the existence of Governing Boards of aviation agencies in the constitution still friendly to the nation’s economy, considering the involvement of payment of ‘jumbo’ allowances and the implications amidst the economic pressures in the new normal presented by the covid19 pandemic?
4. If Governing Boards of aviation agencies must continue to exist and perform their functions as provided for by the CAA Law of 2006, is it not improper to continue to delay the inauguration of new boards?
5. If Governing Boards of aviation agencies have become burdensome, irrelevant, parasitic or useless to the aviation agencies, is it not rational and responsible to amend and expunge the provision from the civil aviation law, rather than have laws on paper without complying with them and continue to operate the system without following the laws guiding its operation?
Aviation unions in Nigeria under the auspices of National Union of Air Transport Employees (NUATE), National Union of Pensioners (NUP), Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) and Association of Nigerian Aviation Professionals (ANAP) this July, accused Nigeria’s Minister of Aviation, Senator Hadi Sirika of pursuing personal interest as against national interest in the planned concession of four of the nation’s 22 international airports.
Speaking for the unions at a press conference jointly held by the four unions, the General Secretary of NUATE, Comrade Ocheme Aba said the unions would not cooperate with the concession programme of the Minister and would make the airspace ungovernable if the Minister refused to complete the due process of the concession or listen to the unions.
He explained that the federal government’s Project Delivery Team (PDT) included representatives of the unions as members, and had at the last meeting in 2019 agreed that airports concession should be downgraded to the least of priority projects of the government but that the Minister had proceeded to make it a priority project because of his personal interest.
He said the process of obtaining Certificate of Compliance on Airports Concession from Infrastructure Concession Regulatory Commission (ICRC) was fraudulent as the PDT was not involved and so, the certificate should be probed.
“It is highly regrettable that both the Minister of Aviation and the ICRC are taking Nigerians for a ride,” adding that every decision on the ongoing concession process had been taken solely by the minister himself. Ocheme said the PTD was supposed to propose Transaction Advisers but was not aware of how the minister arrived at the one he “parades.”
“How can you parade a Certificate of Compliance without determining the transactional scope of the project? The ICRC Project Delivery Team and the unions are yet to conclude the process of concession,” he said.
“We urge Mr. President not be deceived by the certificate. We are opposed to the selective concession of the nation’s airports,” he added.
The unions proposed three options of approach to the concession. They are the Greenfield Concession option, Corporatization option of releasing 45% equity to government and the third option of complete autonomy of Federal Airports Authority of Nigeria (FAAN) as concession of the key four of 22 airports they believe, would mark the complete closure of FAAN as a profitable business concern.
The procurement of Transaction Advisors ought to be regulated by the Bureau of Public Procurement and guided by the Public Procurement Act 2007.
Unless stakeholders in Nigeria’s aviation sector begin to ensure integrity in their transactions, the sector may never experience the desired speedy growth and development.

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