Nigeria: FAAN Boss Calls for Guidelines to Boost Capacity of Cargo Freighting in Nigeria

The Managing Director of the Federal Airports Authority of Nigeria (FAAN), Captain Rabiu Yadudu, has called for guidelines in cargo freighting in Nigeria to help boost the capacity of exports by air.

Speaking during his presentation at the Aviation Cargo Conference (Chinet Aviacargo, 2022) in Lagos, Yadudu said the conference was coming at a critical time when “present events have underscored the importance of developing an aviacargo guidelines for Nigeria to the global space.”

The FAAN Managing Director quoted the International Air Transport Association (IATA), which stated that the air cargo market in 2021 recovered rapidly from the shocks witnessed in 2020 (due to Coronavirus pandemic) and has kept growing.

“This growth was driven by economic expansion, low inventories, e-commerce and diversion from overcrowded ocean shipping. This scenario could be experienced in Nigeria, if we get right the implementation of the Federal Government plans to diversify the economy through revolution in agriculture and manufacturing,” Yadudu said.

He said that when it comes to cargo freighting the insurance sector is also critical and that it represents the backbone of Nigeria’s risk management system.

“It ensures financial security, serves as an important component in the financial intermediation chain and offers a ready source of long term capital for infrastructural projects. Needless to say, the role of insurance and regulation in the growth of aviation and cargo business cannot be overemphasized. To a certain extent, insurance mitigates the impact of risks and positively correlates with growth as entrepreneurs cover their exposures and inculcate more risk-taking abilities. In this regard, a strong and cooperative insurance industry is a compelling imperative for Nigeria’s economic development and growth.” He said.

Yadudu disclosed that one of the objectives in FAAN is to catalyze the development of an implementable aviation cargo guideline that would help stakeholders understand and appreciate one another’s role in moving the cargo business from where it is currently to where the stakeholders would want it to be in the short term, medium term to long term.

“Permit me to state without mincing words the Cargo Guideline I am talking about is not for FAAN, but an Aviation Cargo Guideline. It is to be developed with inputs from all the aviation cargo stakeholders,” he said.

Backing his presentation with statistics, Yadudu said it was clear that Nigeria imports more than she exports through air cargo, noting that in 2017, about 168.7 tons of goods transited through our airports, and importation accounted for about 66 per cent of this total, while export of goods accounted for the balance of 34 per cent. And in the same year, about 39 tons of mails passed through our airports. While total mails importation was 77 per cent; while Nigeria exported only 23 per cent of the total.

“Although, the data shows a 52 per cent increase in the total volume of goods and mails that passed through our airports in 2021 compared to 2020 data, it is not a cheering news to say that we have not been able to reduce the deficits in our ability to export more through our airports. If only we could bridge the gap, then we would confidently say that we will be ranked at the top of busiest cargo handling airport in Africa and compete favorably in the global aviation index. This should be our next task. The AviaCargo guideline should be the clear way to go,” he said.

He said that the statistics showed that Nigeria has a long way to go in the domestic air cargo facilitation.

“I believe that we can do much better given our population and agricultural capacity and output. It is not news that many of our farm produce are transported by road and as such most of the produce got damaged and loose quality in transit. This calls for urgent aviacargo intervention, as it is one of the major reasons of food scarcity and high price in some parts of the country. The airlines are therefore urged to increase their capacity in domestic air cargo operations. I believe that if this is done and with the development of aviacargo national guideline and its deliberate implementation, we stand the opportunity of increasing the domestic freight by at least 30 per cent year on year going forward.

In Africa, Yadudu said that Nigeria’s stand in air freighting business is not a reflection of its capacity and size because, according to Airport Council International (ACI) statistics on Air Cargo, about 2.15 million metric tons of cargo transited through African airports in 2021. This was an 11.6 per cent increase from 2020 data, but Nigeria has in the fifth position.

“The statistics also showed the data of our busiest airport in 2021, MMIA, Lagos, at the fifth position by airports in cargo handling in Africa. It is quite obvious; we have the capacity to more than triple this volume, if we get our priorities right and do the needful. I confidently believe this, given that we surpassed the African growth of 11.6 per cent in 2021 with a fair margin, having recorded an increase of 52 per cent within the same period. Furthermore, within the same period in African, Ethiopian airline has just published its financials statement and shows that 59 per cent of its revenue came from cargo. This shows the capacity of the market in Africa. Nigeria with over 200 million population and largest market in Africa will do better,” he noted.

He said aviation cargo guideline should be the starting point to writing the wrongs, “the mistakes that have been our impediments over the years. In this document we should be able to identify these impediments and chart implementable actions plan that will be followed by all stakeholders to achieve our common goal, which is to reverse the deficits in imports/exports ratio and domestic cargo distribution.”

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