Thursday , 30 June 2022
Minister of Aviation, Senator Hadi Sirika at the three day Public hearing on aviation agencies at the National Assembly Complex in Abuja

COVID-19 Aviation palliatives: What will become of N22bn balance of N27bn?

The aviation industry was given N27billion in palliatives to help the industry recover from the COVID-19 pandemic; already the Aviation Ministry has disbursed N5bn of the N27bn as bailout fund to airlines and other ancillary businesses. Months after, an industry that has seen its fair share of lapses when it comes to monetary distribution is calling on Minister, Hadi Sirika to deviate for the norm of unaccountability  of the past noting that this is not the first time the industry has received such palliatives without any development to show for.

 THERE is a foreboding silence in the aviation industry with regards what will become of the aviation bailout fund released to the industry by the Central bank of Nigeria (CBN) especially after airlines and some ancillary services in the sector have received palliatives from the government.

In March 2020, Nigeria’s central bank announced a credit relief of $137, 000, 000 million around N50 billion to businesses affected by the coronavirus pandemic of which ₦27billion was earmarked to save existing aviation industry organizations and jobs, through a targeted stimulus package and fast track the establishment of a private sector driven national carrier.

After the long clamour for bailout funds for the aviation industry, Nigerianflightdeck on January 5, 2021 learnt that the supervising ministry of the industry had disbursed N5billion of the N27billion released to the aviation industry as bailout funds in December.

According to what is known of the funds disbursed so far, scheduled and non-scheduled airline operators got N4billion; while others including ground handling companies, National Association of Travel Agencies, Aviation fuel marketers as well as airport car hire services partook from this largesse got N1billion.

Snippets of information later came out indicating that some major commercial airlines like Air Peace and Azman Air got N500million each from the deal while it was learnt that Med-View got N50 million. It is uncertain what others including Dana Air, Arik Air, Aero, Max Air and Overland Airways got from the palliative and select Charter operators also got from the funds but in all airlines shared N4billion.

Meanwhile, Akwa Ibom-state owned Ibom Air got nothing from the shared funds while the remaining N1billion was shared among ground handling companies, catering services, travel agencies, aviation fuel marketers and airport cab operators.

Given, what the airlines got from government is not a loan nor is it repayable from what has been learnt so far; however, what was received by those airlines and others are just a paltry sum of the  entire funds released to the industry and there is need to establish that the rest of the funds are deployed for what they were meant for.

Going by history, it is at times like this that emphasis should be placed on monitoring and demanding accountability on what projects these funds would be spent on and how, especially if we are to avoid a repetition of the not too distant past.

A document also revealed that government agencies like the Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace Management Agency (NAMA) and the Nigerian Civil Aviation Agency (NCAA) got 5 per cent from the beneficiaries as part of the debts owed the government agencies.

Although there is still some murmurs with regards the disbursement of the N4billion among airlines, the question that seems to raise concern more is what will happen to the rest of the N22billion earmarked as palliatives for the industry especially as the loud silence from the ministry is concerned.

The reason it has become pertinent to ask questions now is due to past events and monies that have come to the sector meant for development but has ended up missing or in someone’s account and are still issues of relevance till today.

Case in point, the missing N6.5 billion from the N19.5 billion and others monies that have gone unaccounted for in the industry in times past.

Recall that in June 29, 2008 the Economic and Financial Crimes Commission (EFCC) stormed the sector and arrested two former Ministers, Chief Babalola Aborishade and Chief Femi Fani-Kayode in respect of the misappropriation of the N19.5 Billion Aviation Intervention Fund

The revelations of the missing funds came up at an on-going public hearing by the Senate Committee on Aviation approved by former President Olusegun Obasanjo where it was also discovered that  an additional   N2 Billion loan which the Rivers State government injected into the fund, bringing the total to N21.5 Billion.

The money was given to the industry after the spate of crashes in 2005 and 2006 to improve on infrastructure and get the sector moving to avoid a repeat of the sad incidents.

The two former ministers were arrested because of their irreconciliatory position on the disbursement of about N8.5 Billion, N6.5 Billion of which was expended on the procurement of Safe Tower Projects in four airports in the country.

While Aborishade told the committee in his presentation that he never signed out any money before he was redeployed on 7 November2006, Fani- Kayode told the committee that his predecessor was economical with the truth.

Then there was also the curious case of the N300 Billion Central Bank of Nigeria (CBN) Power and Airline Intervention Fund (PAIF).

In a bid to catalyze the financing of the real sector of the Nigerian economy, the central bank had, in accordance with Section 31 of the CBN Act 2007, approved the investment of the sum of N500 billion debenture stock issued by the Bank of Industry (BOI).

The sum of N200 billion was set aside for the refinancing/restructuring of Small and Medium Enterprises/ Manufacturing portfolios while N300 billion was set aside for power and airline projects.

The funds were made available to the aviation industry after a similar cry for bailout to fast-track the development of electric power projects, as well as fast-track the development of the aviation sector of the Nigerian economy by improving the terms of credit to Airlines

This loan was initially meant to provide leverage for additional private sector investments in the power and   aviation sectors.

However, the funds came to the industry and instead of the airlines benefiting from them, their creditors, the commercial banks got paid in full, due to outstanding bank debts and the airlines were left with nothing.

These are some monies that have been allotted to the industry of which the ultimate aim was defeated as monies end up looted or diverted to other sectors and so when airlines started calling for bailout again, they were plenty who still have the bitter taste of the past in their mind.

Most of whom feel funds should be monitored, projects scrutinized and for those accountable to be directed right.

The reality now despite everything said and done in the past, is that there is the existence of funds left from the N27 billion disbursed to the sector and to ensure the past does not repeat itself, monitoring and monitoring of said funds must be done and so this minister should show his integrity and come out to breakdown where the remaining N22 billion will go and how that will benefit the industry.

About NigerianFlightDeck

Nigerianflightdeck is an online news and magazine platform reporting business stories with a bias for aviation and travel. It is borne out of the intention to inform, educate as well as alter perceptions with balanced reportage.

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