June 2, 2023

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COVID-19: FG’s N27b palliative, a paltry sum to cushion losses in aviation

3 min read

Dr. Gbenga Gabriel Olowo, President, Saber West Africa

The proposed sum of N27b touted as being earmarked to cushion the devastating effect of COVID-19 to operators in Nigeria’s air transport industry has been described as a commendable, very necessary and good attempt by government given the national income constraints during the year.

The financial stimulus had further been appraised that it would barely be enough for both the 2nd and 3rd quarter losses the aviation industry recorded going by the pronouncements of the Minister of Aviation, Captain Hadi Sirika while briefing the nation as a member of the Presidential Task Force, PTF, on covid-19, where he gave detailed explanations as to the basis of the task force’s computation on the industry projected losses.

A renown economist and a distinguished aviation manager who also is the President of Saber West Africa, Dr. Gabriel Olugbenga Olowo, in an abridged submission, noted that $58.7 million dollars touted as stimulus, “is a paltry sum to cushion total negative effect of Covid19 in Q2 & Q3 2020 only, and may not sufficiently address Airlines & Its Allies loss of business”

Dr. Olowo, who is also the President of the only aviation pressure group, Aviation Safety Round Table Initiative, ASRTI, suggested seven critical project elements the much needed palliative must addressed if at least a modicum of impact on the industry is expected from the palliative to be disbursed.

He posited that the tenor of the facility to any beneficiary should be for twelve months while the seven project element the fund must be utilized for he chronicled thus:

  • Extend grant support including payroll to the aviation industry including airlines, handlers, caterers and related services.
  • Provision of single digit soft loans, with long term repayment plans.
  • Deferred payment of taxes and filing dates.
  • Ensure the removal of value added tax, VAT, from airline tickets as approved by the Federal Executive Council, FEC.
  • Provisions of COVID-19 test for all passengers and crew.
  • Waiver of airport rent fee to airport operators for the duration of the lockdown plus one month.
  • Begin processing for the establishment of a private sector-driven national carrier, which will create activities in the wider economy for suppliers, importers, exporters and manufacturers.   

According to the case note, Olowo averred that the gesture would save existing organizations in the aviation industry and jobs through a targeted stimulus package. The gesture if diligently implemented he opined that it would strengthen the aviation sector so that it survives. And creates job opportunities and support and create general economic activity including transport logistics.

Olowo reiterated that ALL the seven project elements are KEY to a robust Aviation sector in Nigeria. He however added a caveat that, individual projects ( not Covid-19 related) should attract special focus and special funding.

He warned that, industry needs must be equitably prioritized and for a proper assessment of would be beneficiaries he suggested that, a ministerial committee on appropriation should be guided by monthly loss of business by stakeholders evidenced by tax payments during same period during 2019.

Dr. Gabriel Olowo added another caution that in view of the paltry sum for the stimulus, project elements should not be ambiguous but clearly defined.

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