It's time for Nigeria to overcome stunted growth
Nigeria's air cargo and ground handling sector has huge potential, laced with challenges, as regional transport and trade liberalization gears up.
Nigeria's air cargo and ground handling sector has huge potential, laced with challenges, as regional transport and trade liberalization gears up. Basil Agboarumi, Managing Director of SAHCO, one of Nigeria's biggest ground handling companies, explains in this exclusive interview with Roy Ezze.
As year 2022 rounds off, how would you describe the aviation cargo and ground handling industry in Nigeria vis-à-vis recovery from Covid-19 of 2020/21?
We began the recovery path after the lockdown was lifted and people developed confidence in the aviation industry. In 2022, the aviation industry went on to full recovery and passengers started to fly and there was also an increase in the volume of cargo. Due to Nigeria's unique nature, cargo has been suffering a major reduction due to the economic situation and foreign exchange. Cargo is driven by foreign exchange and it has been grossly affected by its unavailability.
Nigeria's low level of exports contributed to the limited inflow of foreign exchange into the country, would you say Nigeria's air cargo export has increased in 2022?
We can actually say export is growing in Nigeria, we are learning the ropes. Nigeria is an import country and export is beginning to grow. There are so many things to grow to gain the benefit of export. The government has a role to play to ensure policies are put in place to bind the export chain together. If export works, it will be another way to get foreign exchange into Nigeria. It is growing at a slow pace. Our export packaging is not there yet and some of our farm products cannot be exported, for instance, beans. We need more people to be involved in the export industry; we still need to do more to compete favourably.
Exporters and aviation experts have lamented the rejection of some export commodities from Nigeria, how do you think Nigerian exports could be improved in this regard?
Every country has its policies, for your export to be acceptable, you have to be sure of having a system in place that will ensure full compliance to the rules of the country you are exporting to. As long as we don't do this, it will be rejected. Also, packaging is very important. The government has to put in place a structure that ensures that whatever to be exported meets the right standard. International trade aligns with international best practices; we cannot operate in a vacuum. Change is the only thing that is constant in life; we can't be doing the same thing the same way and expect different results. We need to sit together and see why our products are rejected and ensure that we put a system in place that will ensure compliance and monitor this system. We need to depart from talking to doing.
"Looking at the airport in line with our population in Nigeria, you will see that we have not maximized what we have. Concession is good and it will help us maximise all the advantage that we have as a country."
Basil Agboarumi, SAHCO
More than 10 airports have been designated as cargo airports in Nigeria; do you think these airports have fulfilled this designation and what can be done to improve their utilisation as cargo airports?
Government understands why those designations were done. Cargo airports are for cargo and this speaks to the supply chain. Cargo in this sense means agro-allied products, right now a lot of states have been affected by flooding. People cannot farm due to the flooding and also due to insecurity. Government has to give the right support to encourage people to farm. It should create farm cities, where all the unemployed youth can farm and earn their living, these cities should be equipped with amenities and modern farm equipment. This will create surplus to feed our nation and for export too. We need to get those airports busy with industrialisation. It shouldn't be about exporting raw materials alone. We can also export finished products that have been manufactured in these industries.
The issue of airport concession has been controversial in Nigeria over the years, how would airport concession work effectively in Nigeria's big and small airports?
The purpose of anything is to maximise how we can make use of anything. Looking at the airport in line with our population in Nigeria, you will see that we have not maximized what we have. Concession is good and it will help us maximise all the advantage that we have as a country.
How would you describe the cargo area and facilities at the airports you operate in, given the need to expand cargo and ground handling activities in Nigeria?
When you travel out of the country and you see how the amenities help to operate ground handling, you will be sad. Our environments are unfriendly to our equipment; we spend so much on wears and tears. And this equipment can only be sourced from abroad. We have to move equipment that is not supposed to cover long distances to service them and to operate cargo and ramp handling. In other countries, before you are done with immigration, your baggage is already waiting for you at the carousel. It is not that we don't know our job, but it is just that the environment is not allowing us to operate the same way we want to operate.
Recently, the ground handling fees were increased for Nigerian ground handlers, how has this affected your revenue and clientele?
After about 35 years, we finally have an increase in ground handling fees. Unfortunately, as we are also talking about the increase, inflation has come to swallow up everything. A few years ago, the dollar was exchanged for 360 naira, now it costs over 800 naira. You can see that the increase that would have impacted greatly positively on our profit has been cut short by the increased rate of inflation though it would have been worse if the increase wasn't made.
Looking forward to expected recovery in Africa in 2023, how do you think Nigeria can attract more airlines and enhance optimal use of the investments of SAHCO in recent years?
First, we must have the right facilities in terms of airports and the right diplomatic relationships with other countries. There are countries whose citizens trade with Nigeria and yet their airlines do not fly into Nigeria. Also, government needs to support domestic airlines to grow to compete with foreign airlines. The government should also be committed to setting up a national carrier which will be a boost to the Nigerian economy.
What is your plan for regional expansion as the Single African Air Transport Market (SAATM) and the African Continental Free Trade Area (AfCFTA) gather speed?
It is part of our plans. We are looking for opportunities in African countries. We are big and have the capacity and experience. We are resident in 22 airports in Nigeria. This can be translated to being resident in 22 nations. It will be an icing on our cake to take our brand to other countries in Africa. We are open to such opportunities.