© 2018 - International Centre for Investigative Reporting
Nigeria Air launch: five reasons Nigerians should not be overjoyed just yet
IN February, Hadi Sirika, Minister of State for Aviation, revealed that the federal government is close to unveiling a new national career — set to be the second in the nation’s history.
“I will say that we are very close to having the national carrier established. Certainly, it will be within the first term of this administration,” he had said. On Wednesday, that unveiling was finally done by Sirika himself at the Farnborough Airshow in London. It will officially kick-off come December 24, a day to Christmas.
The Minister, who said 400,000 young Nigerians contributed to the proposed airline’s naming, assured that the federal government’s stake in the company will be no more than 5 percent. According to him, it will be “private sector-led and driven through Public Private Partnership (PPP) arrangement”.
He also tried to allay fears that the emergence of the airline will threaten the survival of established local companies in the industries, saying it is a typical business meant to complement and promote their services.
Mixed feelings have, however, trailed this announcement, with some raising concerns and expressing strong reservations, while others suggested it is a welcome development — or saying, at worst, the government deserves the benefit of the doubt.
There are those who have even suggested the announcement is perhaps a political strategy, which came conveniently just months to the next general elections. But then, below are some of the reasons it might be too early for Nigerians to start leaping for joy.
HOW MUCH IS THE F.G. REALLY CONTRIBUTING?
Sirika has said the government will have only 5 per cent shares in the airline at the topmost. According to the obtained Outline Business Case Compliant Certificate, the FG agreed to “zero contribution to airline management decisions and zero management control by the government”.
The certificate also states that the government agrees to provide an upfront grant known as “viability gap funding” (VGF) to fund aircraft acquisition and start-up capital.
The FG has said the proposed airline will gulp a preliminary cost of $8.8 million and a take-off cost of $300 million. It also said “government will have to spend the pre-start up cost like the brand name, the office” among others.
It is, however, not certain if this pre-start up cost is restricted only to the preliminary $8.8 million, or it also covers the additional take-off cost. Many have wondered why the government is getting only 5 percent shares when it is bringing so much money to the table.
HOUSE OF REPS SMELLS A RAT
There are indications the House of Representatives may soon be investigating the concession agreement on the new national carrier. The green chamber noted that the sum of $308.8 million the project is expected to gulp was not provided for in the 2018 budget.
Dennis Agbo, representing Igboeze North/Udenu Constituency, raised the motion on Thursday to demand that an ad-hoc committee be set up. The committee is to investigate the process of concession of the national carrier and ensure that a credible core investor is selected.
The motion “further raised concern that the ministry had proceeded with the process in such a curious, hastened and in complete disregard of the pre-conditions in the OBC by ICRC, which is charged with ensuring integrity and favourable outcome of any concession of national assets”.
Likewise, the Transport Ministry has been accused of mismanaging funds received for the unveiling ceremony, which could have been held on local soil.
AN UNPOPULAR STRATEGY?
It has been argued that the strategy of the government to have an extremely small minority equity in the business is unpopular across the globe. For instance, out of a total of 152 flag carriers listed by Wikipedia, 49 are said to be state-owned, 31 are majorly owned by states, while 11 have minority shares owned by the states.
A similar trend is noticed in the 2016 list of government-owned and privatised airlines released by the International Civil Aviation Organisation (ICAO). However, a 2010 global study states that listed airlines are the most profitable, followed by state-owned airlines, then privately held companies.
DOMAIN NAME CONTROVERSY
It is expected that before the name of the proposed carrier is publicised, all necessary acquisitions and registrations would have been settled. For this reason, it came as a rude shock when Nigerians learnt the necessary domain name had not even been secured at the time of the launch.
On the same day, Oluwamayowa Elegbede swiftly bought two relevant domain names which were still available: nigeriaair.com.ng and nigeriaair.ng. He has offered both for sale at the price of $66,489 (₦20.3 million) each. Nigeriaair.com is also put up for sale by another seller.
Sunday Folayan, President of the Nigeria Internet Registration Association (NiRA), which manages the .ng national resource, has however said the federal government may find solace in relevant federal laws and regulations, such as the NIRA Domain Names Policy.
According to him, .ng is a Country-Code Top Level Domain(ccTLD) and the rules regulating it are different from a Generic Top level Domain (gTLD) such as .com or open SLDs such as .com.ng, .org.ng and so on. Registering a .ng domain does not automatically confer ownership, especially where another person has such proof of trademark as a CAC registration document predating when the domain was bought.
He also referred to section 15 of the Nigerian Cybercrime Act of 2015, which defines and penalises the offence of cyberquatting.
Subsection (1) of the section states: Any person who, intentionally takes or makes use of a name, business name, trademark, domain name or other word or phrase registered, owned or in use by any individual, body corporate or belonging to either the Federal, State or Local Governments in Nigeria, on the internet or any other computer network, without authority or right, or for the purpose of interfering with their use by the owner, registrant or legitimate prior user, commits an offence under this Act and is liable on conviction to imprisonment for a term of not less than two years or a fine of not less than N5,000,000.00 or to both fine and imprisonment.
HASTY, PRE-MATURE CELEBRATION?
Many Nigerians have also questioned why so much optimism and celebration has greeted a project whose major actors remain mysterious. Truly, the questions of who or what companies exactly will control the 95 percent equity and where the start-up funding will be drawn from remain largely unanswered.
“Nigeria Air: New name for relegation troubled Nigerian Airways. New owners of the club are unknown. new manager is unknown. No single player (jet) has been signed. No stadium (office). But they have already started a huge carnival and trophy parade around the city,” wrote one Twitter user.
Nigeria Air ✈️
New name for Relegation troubled Nigerian Airways
New Owners of the club are unknown
New Manager is unknown
No Single player(Jet) has been signed
No Stadium (office)
But they have already started a huge Carnival and Trophy Parade around the city.
— Ebube D Statesman (@akaebube) July 19, 2018