Tuesday 9 July 2013

Aviation Transformation: Looking towards a Chinese Concession

Aviation Nigeria

by Tahir Sherriff

Transportation as a means to an end has remained a primary action of man since time immemorial. Today, in all modern societies it has become a hub of investors and institutions developed to provide an array of services related to land, sea and air transport.

Since service providers have come to depend on investors who aid in setting up necessary infrastructure, two elements, Capital and Profits take primary positions in these discussions and every government that seeks to provide social amenities have to deal with these challenges.

The Nigerian Aviation industry which has continued to cross the boundaries of local possibilities has sought to tackle one challenge in its plan to build first class international terminals in different states of the country. The challenge of funding.

Building airport terminals to meet international standards go beyond raising structures that inspire awe from local and foreign travelers, it also (as airports are gateways to countries) defines for foriegn investors a first aid analysis to economic standards of quality.

To fund the building of structures is only partial, to fund the entities that will exist in these structures is another financial maze in itself.

Among the 'To Do' list of the team which will accompany President Goodluck Ebele Jonathan as he resumes a session in China is among other things, working out the financial ramifications of a concession agreement that will involve the President, the Ministry of Aviation and the China Civil Engineering Construction Company (CCECC) in what is expected to be a concessionaire agreement for the building of airport terminals in different parts of the country.

The key word for CCECC who have began to play an active part in the development of various sectors of the Nigerian economy will be 'Profit', but theirs will not be short term. A concession agreement often accompanies with it (in complex societies such as Nigeria) various financial and political upheavals. 

Diplomats and Ambassadors will be discussing with President Goodluck Jonathan along social, political and financial lines in his 5-day visit to the commercial world center. If a cost-effective concession agreement is reached and the terminals are put in place, it is expected that it will usher not only Foreign Direct Investments, but also internal development in the area of job creation and quality services.

With the growing focus of foreign investments in Africa, matched with a double digit airline passenger growth statistics, such development not only helps to take advantage of the opportunities as they come, it also aids in building from scratch a workable business and legal framework that will suitably meet developing challenges.

The Minister of Aviation, Princess Stella Adaeze Oduah highlighted the administrations objectives while clinically stating its advantages during a Mid Term report in June after what was termed 'a wholistic review of the aviation sector' said its actions are poised to prepare the sector to become an economic tool for transforming the economy.


One thing is certain, this new trend to tackle the challenges of funding for national projects, is a different approach from older and more radical versions of wealth creation such as double digit interest loans from Paris Club and sister entities.

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