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Why airlines can’t access N500bn govt bailout

By Kenneth Ehigiator
LAGOS — Indications emerged weekend that airlines have not been able to access the N500 billion bailout to some sectors of the economy, including aviation, due to the tussle among the Central Bank of Nigeria, CBN, Aviation Ministry and Nigerian Civil Aviation Authority, NCAA, over who should disburse the money.

The Federal Government approved the bailout fund for airlines earlier in the year, based on persistent calls by airline operators for a relief to cushion the effect of harsh operating environment.

Vanguard gathered that while the CBN opted to disburse the funds to the airlines through the Bank of Industry, BoI, the Ministry of Aviation is insisting it takes charge of the funds and disburse to the airlines later.

CBN governor, Mallam Sanusi Lamido Sanusi, is said to have expressed concern over the inability of the airlines to receive any relief and had held several meetings with the Finance Minister  and officials in the Presidency over the delay in disbursing the fund to the airlines.

The bailout, which comes with a re-payment moratorium of five years, is with very low interest rate, compared to bank facilities which had increased the debt overhang of most airlines.

It was learnt that the Ministry of Aviation and its parastatal, NCAA, are suppose to guide the CBN and Bank of Industry in disbursing the funds to the airlines, but are reluctant to do so because the whole process had been taken off their purview.

Vanguard gathered that while the ministry wants to be in charge of disbursement of the funds, the NCAA wants to decide which airlines should benefit from the funds and what share of the money each could get.

NCAA denies knowledge of devt

But NCAA Director-General, Dr. Harold Demuren, told Vanguard yesterday that he was not aware of any such development.

“I don’t know about that.  Have they given us the money?  They have not, therefore, I don’t know about that,” Demuren said, just as calls pulled through to the technical assistant to the Aviation Minister, Mrs. Fidelia Njeze, remained unanswered.

A source told Vanguard, weekend, that airlines were in desperate need of the bailout funds and had also been piling pressures on the CBN to see how they could get the relief.

Besides, the Federal Government is also said to be disappointed in the inability of the airlines to articulate in what areas it could intervene to assist their operations, beyond giving bailout funds.

FG’s committee

The Presidency had early in the year set up a committee on the issue, which in turn created a sub-committee, headed by owner of Overland Airways, Capt. Edward Boyo, to come up with a report on what areas airlines actually needed government’s intervention.

According to the source, “you won’t believe that up till now, that committee has not been able to submit its report. In fact, government had to come up with this bailout, having waited in vain for the report which had not been forthcoming.  We discovered that the airlines have been fighting themselves over what position to present to government.”

On bailout funds, the source said everything depended particularly on the Aviation Ministry to play its role to enable the CBN, through the Bank of Industry, begin disbursement of the funds.


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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.