The Minister of Aviation and Aerospace Development, Festus Keyamo, says Nigeria’s proposed aircraft leasing company will enable airlines acquire aircraft through local arrangements and make payments in naira rather than dollars.
Mr Keyamo disclosed this while speaking on the sidelines of the inaugural African Air Transport Conference in Lomé, Togo.
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The minister said the proposed Nigeria Aircraft Leasing Company would be privately funded but backed by government guarantees designed to attract investors and reduce risks for aircraft owners and financiers.
According to him, the initiative is aimed at helping local airlines overcome one of their biggest challenges – access to aircraft on affordable terms.
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“We have also floated in Nigeria the aircraft leasing company, Nigeria Aircraft Leasing Company, that will be fully privately funded,” he said.
He explained that the federal government would retain a small stake in the company because of the sovereign guarantees it intends to provide.
Government support
Mr Keyamo said President Bola Tinubu has approved the initiative and that discussions with prospective investors are ongoing.
He added that the company could benefit from tax holidays and other incentives designed to attract investment.
According to him, government guarantees would provide confidence to aircraft lessors and creditors while reducing the risks associated with financing transactions in Nigeria.
“This is a big de-risking factor for lessors and creditors,” he said.
The minister also highlighted Nigeria’s implementation of the Cape Town Convention and the Irrevocable Deregistration Export Request Authorisation (IDERA), which allows aircraft to be deregistered and exported within a specified timeframe if operators default on their obligations.
Paying in naira
Mr Keyamo said one of the biggest advantages of the proposed leasing company is that Nigerian airlines would be able to transact in naira.
Currently, many airlines source dollars to meet lease obligations to foreign aircraft owners, exposing them to exchange rate fluctuations and foreign currency shortages.
Under the new arrangement, he said, airlines would deal with the local leasing company, while responsibility for managing foreign currency obligations would rest with the company.
“The airlines can then transact in naira at a local rate with the local company,” he noted.
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The minister said the arrangement would ease financial pressure on airlines and make aircraft acquisition more accessible.
He added that participation would not be compulsory, stressing that airlines would remain free to negotiate aircraft leases elsewhere if they find better terms.
Mr Keyamo said the long-term goal is to expand the platform beyond Nigeria.
“It’s going to spread to the whole of West Africa and Central Africa. It’s going to be a leasing platform for the whole of Africa at some point,” he said.
