Keyamo Raises Red Flags Over ‘Nigeria Air’ Project

The fate of Nigeria’s national carrier, Nigeria Air, remains uncertain as Minister of Aviation and Aerospace Development, Festus Keyamo, expressed concerns over certain aspects of the agreement signed with private investors.

Addressing State House correspondents after the weekly Federal Executive Council (FEC) meeting on Monday, Keyamo, however, refrained from preempting President Bola Tinubu’s final decision on the airliner’s future.

Nigeria Air, founded in 2018 with ownership stakes divided among Ethiopian Airlines (49%), Nigeria Sovereign Investment Authority (NSIA) (46%), and the Nigerian Federal Government (5%), received its first aircraft in May 2023 but has since remained inactive.

Keyamo disclosed that critical details of the agreement with major stakeholder – Ethiopian Airlines – required reevaluation, citing concerns about tax waivers, staffing arrangements, and the potential for creating a monopoly at the expense of other local airlines.

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He emphasised his responsibility as a minister to address stakeholders’ concerns and underscored the need to ensure a fair evaluation of the situation.

Keyamo informed reporters that he had submitted his observations to President Tinubu, who will determine the next course of action regarding Nigeria Air.

The minister raised specific issues with the agreement, including tax waivers granted to Ethiopian Airlines for five years, potentially giving them a competitive advantage over local airlines already burdened by heavy taxes.

Additionally, Keyamo pointed out a proposal in the agreement allowing Ethiopian Airlines to appoint personnel at all levels within Nigeria, which could lead to a scenario where Ethiopian Air controls top management positions.

He said, “Now we have looked at all the issues and it’s before Mr. President. But let me just give one or two snippets because of Nigerians who are quick to judge.

“In the agreement, you are giving tax waivers to Ethiopian Airline coming into Nigeria. They asked for tax waivers for five years and you granted them, to come and compete with your local airlines who are paying those heavy taxes. How? You want to create a monopoly? That’s why when they tell you that we want to crash price by… it’s a lie. It’s robbing Peter to pay Paul.

“Because they have removed all taxes from you and you’ve granted them tax waivers, initially they will crash prices, but once you’ve driven every other person out of the market, you’ll now have a monopoly, then you can now hike it 500%, nobody dares to challenge you.

“The only thing that brings down prices in the commercial world is fair competition. In the agreement, they also made a proposal that they will appoint everybody; top management, everybody Ethiopian, in Nigeria, and we agreed. We agreed.

“I’m just giving you snippets. I’ll do a full interview, I’ll not give more. So when I’m ready to talk, I will talk, but I cannot preempt Mr. President. We have raised all the concerns before him.”

While Keyamo refrained from giving a detailed press interview, he assured that all concerns about NigeriaAir had been forwarded to President Tinubu for review and further action.