How policy reforms can transform Nigeria’s aviation sector

The aviation industry in Nigeria has been a key player in the country's economy, supporting over 241,000 jobs and contributing $1.7 billion to the gross value. However, compared to South Africa's aviation sector, which accounts for over $12 billion, Nigeria's aviation industry is not pulling its weight. With the sector representing only 0.4% of the country's GDP, there is a clear need for policy reforms and structural changes to unlock its full potential. Chukwuerika Achum, the CEO of Vivajets, recently discussed the reforms needed to transform Nigeria's aviation sector and highlighted key areas that need attention. Looking at the outlook for the sector in 2024, Achum acknowledged the challenges faced in the previous year, including high inflation and currency devaluation. The limited capacity in the market has led to high ticket prices for consumers, highlighting the need for expansion and investment in infrastructure to support growth. Despite these challenges, Achum remains optimistic about the strong demand in the market and hopes to see continued growth in passenger traffic. Structural reforms have been put in place, with the Civil Aviation Authority introducing new regulations for entrants into the domestic airline market. These reforms aim to improve safety standards and enhance the overall operation of airlines in Nigeria. However, Achum emphasizes the importance of not only focusing on airlines but also on the general aviation sector to diversify the industry and stimulate growth. In terms of regional integration and the Single African Air Transport Market, Achum sees potential for traction this year, with traffic levels surpassing pre-pandemic numbers. While the industry has rebounded, Achum notes that margins remain low, and challenges such as foreign exchange issues continue to impact major players in the market. The issue of trapped funds in the aviation sector is also a concern, with Achum highlighting the importance of timely payments and a clear path to settlement to maintain Nigeria's reputation as a reliable partner in the global aviation market. Despite the challenges, Achum believes that Nigeria has the potential to become a key player in the aviation industry but emphasizes the need for infrastructure and regulation to drive growth and unlock the sector's full potential. Looking ahead, Achum points to two key areas where the government should focus its attention: infrastructure development and regulatory reforms. By investing in these areas, Nigeria can position itself as a competitive player in the global aviation market and drive economic growth in the sector.