The Nigerian government is coming to save Arik and Air Peace – and that is a good thing. The playbook is contained in a statement by Clem Agba, the Minister of State for Budget and National Planning, as the government unveils a N2 trillion economic stimulus: “We are also looking at how to support the Aviation Sector. Like you know, a lot of planes are parked and this is causing almost N21 billion (loss) on a monthly basis. We are looking at how to provide some form of bailout support to ensure that the industry doesn’t die”.
The Minister of State for Budget and National Planning, Clem Agba, said on Tuesday at a webinar held by the Finance Ministry and stakeholders, that the Federal Government is planning to inject a N2 trillion intervention fund into the economy.
The Federal Government had earlier doled out N50 billionTargeted Credit Facility fund to help businesses in Nigeria as the coronavirus pandemic wreaked havoc across sectors. But the fund appears so meager to bail out most of the businesses under the strain of COVID-19 impact. The aviation sector is among the most affected, causing one of the leading Airlines,Arik to lay off staff.
Agba said the fund will offer a lifeline to businesses mostly impacted by the pandemic, especially the aviation sector which according to him, is losing N21 billion monthly.
“All in all, when everything is put together, both government funding and the funds we are expected to get from the Central Bank of Nigeria (CBN), Banks of Industry and other multilateral agencies and grants that we are receiving, we expect to get a stimulus of about N2 trillion going into the economy.
“We are also looking at how to support the Aviation Sector. Like you know, a lot of planes are parked and this is causing almost N21 billion (loss) on a monthly basis. We are looking at how to provide some form of bailout support to ensure that the industry doesn’t die.
“Of the $2.5 billion facilities from the World Bank, about $1 billion of it will be going to the states as loans. Mr. President has already approved N850 billion loan from the domestic capital market,” he said.
I have written about a challenging future for Arik here. That came after I made a similar call on Air Peace here. That government is coming to help the aviation sector is a good call. Without both, the Nigerian economy will not have any chance to rise. There is no commerce without logistics & supply chain – aviation is a critical element of that. Of course, Aero and other airlines will be supported.