Nigerian airlines face significant hurdles in accessing alternate funding, threatening long-term sustainability and competitiveness, according to Topbrass CEO, Mr. Roland Iyayi. Speaking at the Federal Airports Authority of Nigeria (FAAN) National Aviation Conference (FNAC), he explained that Nigeria’s financial and regulatory framework makes offshore financing difficult, if not prohibitive.
Challenges in accessing alternate funding
Iyayi said, “In terms of long-term funding in the global commercial markets, it is a bit difficult for Nigerian airlines to access such funds simply because typically such funds require in-country guarantees.” He added that local financial instability exacerbates the challenge. “Like we have had in the past with a local airline, where the financial sector is unstable, invariably it impacts adversely on the local airline. When a local airline goes abroad to secure offshore funding using, for instance, a U.S. export bank, which requires in-country guarantees, the local banks must first provide that guarantee.”
The CEO highlighted that Nigerian banks face regulatory and capacity limitations. Guarantees exceeding a bank’s obligor limits are sometimes converted into loans by the Central Bank of Nigeria (CBN), adding further financial pressure. “What that means essentially is that a local airline now services two loans,” Iyayi explained.
Financial burdens and competitiveness
Iyayi warned that this dual-loan system undermines competitiveness. “Imagine having a four-and-a-half percent interest rate offshore and then being asked to pay another 26 percent locally. Invariably, the competitive edge is no longer there, and more often than not, the local airline will fail. That’s basically where we are at this point,” he said.
He stressed that the lack of access to alternate funding affects fleet modernization, route expansion, and the ability to compete with foreign airlines enjoying easier access to capital. According to Iyayi, this alternate funding bottleneck also limits infrastructure investment, reduces operational efficiency, and slows overall sector growth.
Call for regulatory reform and practical solutions
Iyayi urged policymakers and financial institutions to rethink airline financing. He emphasized the need for frameworks that reduce risk for local banks while allowing carriers to tap into offshore capital. “If the regulatory and financial structures are not adjusted, Nigerian airlines will continue to be disadvantaged in both domestic and international markets,” he said.
He further noted that while innovative financial instruments exist globally, local regulations and economic volatility restrict Nigerian carriers. Without deliberate intervention, domestic airlines risk stagnation while competitors in the region expand rapidly.
“Addressing these alternate funding challenges is not just about survival. It’s about ensuring that Nigerian airlines can compete on a level playing field globally, attract investments, and support the country’s economic growth,” Iyayi concluded.
