Business Hilights

Tracking Nigeria's Headline Business News Online

Lai Sirika Fake news

Confusion as Minister accuses Lai Mohammed of fake news on Nigeria Air

Ad 2
Ad 3

The Minister of State for Aviation, Hadi Sirika last week accused the Minister of Information, Alhaji Lai Mohammed of spreading fake news over the suspension of activities towards the floating new national carrier, Nigeria Air.

Before now, Mohammed had been championing a serious campaign against fake news across the media landscape in Nigeria.
However, revealing more at the recent 5th Aviation Stakeholders’ Forum in Abuja, Sirika averred that the planned national carrier was suspended because the first Transaction Adviser, Lufthansa, that was to spell out the ownership model in the privatisation and shareholding process, did not complete the process.
Whereas industry stakeholders’ at the forum expressed shocks on the late revelation of the true factor that frustrated the scheme, Sirika dismissed claims that the process for the establishment of the national carrier was suspended due to the lack of investors.
Business Hilights recalls that Lai Mohammed had several weeks ago at a function at Murtala Mohammed International Airport, Lagos, told journalists that government suspended the scheme because majority of earlier investors who had expressed readiness to buy in, suddenly developed cold feet.
But Sirika noted that Lufthansa was replaced due to its outrageous demands which included opening an escrow account, refusal to pay tax and demand for 75 per cent upfront payment.
The minister further revealed that “Another major factor that stalled the process for the establishment of the airline was the inability of the Federal Government to provide a sovereign guarantee for the procurement of 30 aircraft estimated at $300m in a staggered payment till 2020.”
However, to clear some air on the claims of outrageous waste of public funds on the branding and unveiling of Nigeria Air in London recently, Sirika said the entire process cost about N50, 893,000.
“The Transaction Adviser for the national carrier coordinated the campaign and provided the additional services that included the development of the brand strategy and the media strategies relating to the unveiling of the airline.”
On the Lai Mohammed’s fake news accusation, Sirika said “There was fake news that we suspended the process because there was no investor. That is not true. Already IDB, AfDB, AFREXIM, US-EXIM, Standard Chartered Bank, Boeing, Airbus, COMAC/CCECC, BOAD, China-Exim, Qatar Airways, Ethiopian Airlines, Deutche Infrastructure Finance, all of them, including the governments of France and US, have written us to say they are committed to this project, that they want to donate and partner.
“And you know why? It is because they want to export their markets. They want to sell their aircraft. And this is because we don’t have and we can’t produce aircraft. So their (US and France) governments have the responsibility to promote their businesses and that is why they wrote to us that they want to partner. So we have investors.”
During the build to the collapsed scheme, Sirika had said the estimated funding requirement for the establishment of the project was $300m up to 2020, and an initial start-up capital of $55m made up of $25m for the deposit for new aircraft and $30m for working capital from June to December 2018.
According to him, “Estimated working capital for 2019 is $100m.estimated working capital for 2020 of $145m to be provided by the strategic equity partners who are expected to manage the project.”
“The suggestion that Aero and Arik airlines, which are under the control of Asset Management Corporation of Nigeria, should be merged to form a national carrier is not tenable as the national carrier would get entangled with huge indebtedness of the airlines, litigations and other encumbrances.”
Besides, the minister at the forum disclosed ready investors in embattled Nigeria Air to include the African Development Bank, Islamic Development Bank, the governments of the United States and France, among others.

Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.