This Day (Lagos)

7 October 2012

Nigeria: Fears Mount Over FG's Plan to Float National Carrier

Indications emerged at the weekend that the Federal Government may find it difficult to carry members of the organised private sector along in its plans to float a new national carrier in partnership with one of Europe's mega carriers.

There were feelers that the Ministry of Aviation with full support of the Presidency had concluded plans to float a new national carrier with a mega carrier, whose identity is still being kept under wraps.

But reacting to the government's move, Chairman, the Nigerian Economic Summit Group (NESG), Mr. Foluso Phillips, told THISDAY in an interview that such attempt by the government to go into the business of running a national carrier would fail.

The NESG Chairman, who insisted that past experience in the country had shown that government has no business in running such a business venture, said the best thing the Federal Government could do to revive the ailing aviation industry was to provide the needed framework and to encourage the private sector.

He said: "We heard recently that government wanted to start an airline, I can tell you that it will fail. Government has no business in running business. It should tighten regulation and smoothen the entire framework around airline business to enable operators to come up and thrive. They should ask relevant questions. Why is it that most of you are so broke? Why are you so much in debt? Do you have the right system? What is going on that these things are not working well?"

Phillips said the organised private sector is solidly behind the ongoing privatisation programme but expressed the fear that government may not want to fully relinquish its hold on some of the organisations initially slated for sale.

"Privatisation is very key, it is something that we support but will government release them, will it let go? It is obvious that government itself panics saying this is my own source of income, we must be there, we must be seen to be in charge of something. They don't know how to manage these things. This is because a man in government is managing how to spend the money while a man in the private sector is managing how to generate income. This is why a typical civil servant will say I have not been able to spend my vote. Theirs is how to spend money," he explained.

Special Adviser (Media) to the Minister of Aviation, Joe Obi, was quoted as saying that the proposed national carrier would be wholly privately owned and would operate in partnership with an international airline. But THISDAY learnt that government is no more considering building up a domestic airline into a national carrier because of the inherent problem in such an arrangement, which may include the initial owner insisting on having some control and possibly sabotaging the new plan.

An industry operator who spoke with THISDAY said government had changed its initial plan due to the recent development in the industry and would float an entirely new airline with foreign partnership that would manage the carrier, train Nigerian personnel and contribute to the development and expansion of the curriculum at the Nigeria College of Aviation Technology, Zaria.

Meanwhile, Phillips, who is also the Chairman, Phillips Consulting, a human resource and management consulting company with headquarters in Lagos and Johannesburg, said Nigeria would have fared better without the discovery of crude oil.

He maintained that Nigeria in the 60's had a comparative advantage in agriculture but failed to fully tap the potentials due to the allure of oil revenue over the years. "It has been said over and over that oil is like a curse for this country. I believe that our life as a nation would have been better off if we don't have oil because before the oil boom we thrived successfully as a major agriculture producer.

There is something we call competence, we say a country has a national competence and the national competence translates to corporate competence, down to individual competence. The national competence of Nigeria way back in the late 50s and early 60s was agriculture. I say national because it involved everybody. That was what we were nationally competent to do.

"Our banks then thrive on it, National Bank and WEMA supported Cocoa, and Bank of the North supported grains, New Nigerian Bank in the eastern part of the country focused on oil palm. That is to say our banking system also have strong links with agriculture.

Even railway supported agriculture on transportation. Then we started supporting agriculture with industrial estates; Agbara Industrial Estate, Ikeja Industrial Estate, Government Reservation Areas in all parts of the country. It occurred to the leaders then that if we were to build these structures we would need cement and so they came up with the idea of establishing a cement factory. The industrial estates were adding value to our raw materials.

"Then suddenly oil turned up and we began to ask ourselves, why are we farming and other things. Then we started talking of visions," he said.

According to him, "It would have been a different story entirely if we had used the revenue from oil and pump it into agriculture, manufacturing and others things we were doing before it came, then we will not be where we are now. I read a book by Awolowo, where he spoke about the need to build industrial sites, GRA and if we are going to build that we are going to need cement so let us build cement factories.

The point I'm raising is that we get to think of how we can go back to those things that offer our true national competence. I don't believe necessarily oil can employ maximum more than let's say one million people, directly or indirectly.

It generates a lot of revenue but we should take that revenue, every penny from that oil revenue must go into capital expenditure. If you want to earn money, if you want to run government, earn it from taxes and your fiscal means and let it support the size of employment that it can cover".

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