An Aviation Expert and Managing Director of Katari System Nigeria Limited, Ali Mohammed Magashi, has identified very high interest rate charged by airlines by commercial banks in the country as one of the several funding obstacles militating against the growth of the industry.
He also mentioned poor credit rating as one of the major obstacles. Katari made the identification while presenting a paper titled “Financing Nigerian Aviation: The Option For Growth” at the Nigeria Travel Mart (NTM) 1st Anniversary Colloquium with the theme, “Leapfrogging Nigerian Aviation To Match Her Potential” on Tuesday, December 8, 2015.
Speaking further, Katari listed other funding obstacles to the growth of Nigerian aviation to include; over regulated financial system which, according to him, impedes on simple and genuine foreign currency transaction, and over regulation and expensive procedures by the Nigerian Civil Aviation Authority (NCAA), which he said impedes on start-up airlines.
He also mentioned that poor and hostile business model of the airlines, which is characterized by a common ideology tagged “easy” to doing business in Nigeria, has not helped matters, adding that for the Nigerian aviation industry to grow, the Federal Government must provide conducive climate for investors to invest.
He also alleged that there was exploitation of the airlines by NCAA, using multiple inspections of aircraft, undue checks on training and maintenance facilities, which was equally impeding aviation growth.
Suggesting a functional and unbiased financing model for Nigerian aviation, the managing Director of Katari System Limited, stated that there should be targeted and effective subsidy from the Federal Government, intervention guarantee funds with very low interest rates with longer tenure, reduction of multiple taxation that impedes airlines revenue, and creating easier access to foreign exchange from the Apex bank; Central Bank of Nigeria (CBN).
Other solutions proffered as funding models for the country were: reduced Customs and Excise tariffs for local airlines, reduction of landing and parking charges, reduction of navigational charges for local airlines, lighting up airports and sustaining their good maintenance, as only very few airports operate 24 hours, while others operate only visual flights.
On why the Federal Government initiatives did not achieve the desired results, he pointed out that the Bank of Industry (BOI) initiative fund that was put forward did not benefit airlines because there was poor monitoring of the process.
Katari appealed to stakeholders and participants at the gathering to work together if the Nigerian aviation must achieve any meaningful growth, adding that the aviation industry has become one of the pillars of micro economy of the Nigerian economy.