Lagos – The Federal Government has been blamed for the continuous depletion of Foreign Direct Investment (FDI) in the Nigerian aviation industry in the past seven years.
In addition, the International Air Transport Association (IATA) said Nigeria’s aviation infrastructure deficit is about $30 billion.
This is as Opeyemi Agbaje, Chief Executive Officer (CEO), RTC Advisory Services Limited, said the country needs $50 billion to close infrastructure gaps in the sector by 2050.
As at 2016, FDI into the country’s aviation industry dropped to $4.4 billion from $6 billion in 2010.
Stakeholders and analysts in the country’s aviation industry said policy somersaults by the government was responsible for the drop in FDI in the sector, despite major increase of such investments in neighbouring African countries, like Ghana.
Findings by INDEPENDENT indicated that apart from 2012, which experienced a growth of $7.1 billion in FDI, investments in the sector had continued to decline over the years.
Findings revealed that in 2013, FDI in the country’s air sector was $5.6 billion, and this nosedived to $4.6 billion in 2014, and further reduced to $3.6 billion in 2015.
Data obtained from the United Nations Conference on Trade and Development (UNCTAD) by INDEPENDENT revealed that FDI to Africa in the preceding year was $59 billion.
Chris Aligbe, Chief Executive Officer (CEO), Belujane Konsult, said there was a decline in FDI into the country due to government’s policy somersaults.
Aligbe said it would continue to remain so until the Nigerian government adopted global best practices for the sector.
He stressed that Nigeria’s legislative and legal frameworks should be properly looked into before foreign investors would embrace the sector.
He explained that the government was yet to open up the sector to foreign investments, noting that the government had not shown any serious interest in the development of the sector over the years.
Nonetheless, he said with the adoption and implementation of ‘Ease of Doing Business’ policy by government and its agencies, more foreign investors would be willing to invest in the sector, in particular, and the country at large.
“We have not opened it up to foreign investments; we have not shown any seriousness in this sector.
“Unless we do this, we will not get to anywhere. If we do it right, it will be the first way of attracting foreign investments into the country.
“We need to make sure that we adopt the global best practices. We don’t have the global best practice, that is why investors are not coming”, he said.
Continuing, he noted, “We need to look again at the legal and legislative instruments that will give comfort and confidence to foreign investors.
“Up till now, we don’t have it. The frameworks are not there, until we do the frameworks properly and ease the business processes, we will not attract any major investors and the FDI will not increase.”
Dele Ore, former President, Aviation Round Table (ART), attributed the decline in FDI into Nigeria to change of government, which brings in a change in policy.
Ore explained that once there is a change of government, especially in this clime, investors would be sceptical about the new government’s policy direction.
He also mentioned the inability of some of the foreign airlines to repatriate their ticket sales for almost two years as some of the reasons why FDI had reduced in the country.
To change the situation, Ore called for practical, consistent, and flexible policies that would remain despite a change in government.
“You can see that a lot of foreign airlines were not able to repatriate their money for a long time in this country.
“We spent a lot of money on airport remodelling yet we could not see anything that was remodelled, and the combination of all that is making people cautious.
“Look at the concessioning exercise that we have been talking about since 2008 till date, we are not anywhere near yet.
“Our policy should be doable.