Nigeria auctions off concessions for four airports

This includes the country’s big ones: Lagos, Abuja, Kano, and Port Harcourt. The aim is to develop these airports into efficient, profitable, self-sustaining, commercial hubs for passenger and cargo services alike, based on public private partnership (PPP) arrangements. The Ministry of Aviation has invited interested investors to submit their tenders by 27SEP22 at the latest. So, potential bidders should hurry up!

Anyone who has landed at or taken off from one of Nigeria's larger airports, knows about the precarious state of the facilities, the generally inadequate handling of passengers and air freight shipments, the poor service performed by many employees, and the deficits in communications. For Africa's most populous country, but above all for local travelers, airlines, and air freight customers, these deficiencies have long been a factor to be ashamed of. On top of all that, comes rampant corruption, which has reached epic proportions in some cases. “Everyone seems to have their hand out there. Without baksheesh, nothing works,” reports an executive of a shipping company based in Benelux, who often has to go to Nigeria on business.

From shabby to world class standards
This is now set to change, if all goes well. Private companies are officially invited to take over the reins and implement the goals set by the government and documented in its Aviation Sector Roadmap. If this happens, Nigerian aviation will be on the verge of a modernization push, perhaps even a revolution. Nothing less is envisaged than to “achieve value chain growth by developing and profitably managing customer-centric airport facilities for the safe, secure, and efficient carriage of passengers and goods at world-class standards of quality,” states the Ministry of Aviation.  

Whoever wants to participate in the bid should first familiarize themself with the tender conditions listed in the Nigeria Aviation Concession Program. This entails, among others, authenticated documents evidencing the ownership structure of the bidding company, an audited financial statement, proof of the company’s registration, including VAT and Tax number, and experience in the development and operation of an international airport, including the management of cargo terminals. In order to create as many new jobs as possible, the Aviation Ministry recommends potential investors to partner with local firms in compliance with the requirements of the local development policy resolved by the government.  

PPP is the new ray of hope
According to the Aviation Ministry, Nigerian Airports have huge potentials but are currently operating at a suboptimal level due to factors that need to be improved under the PPP program. For any investor, this will turn out to be a Herculean task when looking at the requirements mentioned by the Ministry and in view of the dilapidated condition of the airports. The requirements include but are not limited to: the urgent need for infrastructure investments and runway modernization + maintenance, navigational aids as well as modern terminal management. The currently relatively low assets utilization must urgently be increased. Grave deficiencies such as the lack of terminal capacity at the airports must be quickly solved, as must inadequate gates, faulty automation systems, outdated stands and check-in desks, and damages mainly caused by botched up work. Furthermore, operating separate international and domestic terminals must be terminated. Otherwise, establishing international hubs to enable faster passenger and cargo transits, will not work, highlights the Aviation Ministry, stating the key conditions for granting new PPP concessions.   

From zero to hero
Wrapping things up, it seems that the government is willing to take a U-turn in its aviation policy, for the hitherto strongly neglected industry has recently been highly praised by Nigerian policy makers. In the tender for the concessions, they emphasize that “a strong aviation industry provides the country with a high degree of connectivity.” Foreign direct investment will be channeled into Nigeria and the country will benefit from technology transfers, lauds the government.

And there is another consideration: “The infrastructure and facilities at Lagos Murtala Muhammed International Airport need to be prepared to facilitate the macroeconomic demand of the forecasted population growth and its increasing affluence.” According to official 2021 stats, 211 million people live in the West African country. At the end of 2022, the headcount will be 2.55% more. In contrast, the world population average growth rate per annum is 0.94%.

Heiner Siegmund


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