Why Aviation Sector Needs Local Content Law

By Okuneye Moyosola

Over the years, the Nigerian aviation sector has been mostly dominated by foreigners. Today, most of the aviation service providers depend on other countries for the provision of critical functions including heavy aircraft maintenance, calibration/spare parts for navigational aids, periodic simulator training for pilots and construction of airports.

Over about 90 percent of the market share on the international routes are controlled by foreign airlines.  Similarly, the cockpits of most aircraft flown in Nigeria have continued to be manned by foreign pilots while about 500 local pilots remain unemployed. The sector had also witnessed an influx of expatriate as pilots, aircraft engineers and other aviation professionals.

In a report released by the Nigerian Civil Aviation Authority (NCAA) earlier this year, over 400 out of the 600 travel agencies operating in the country were rather dealing directly with the International Air Transport Association (IATA). Also, the National Association of Nigerian Travel Agents had stated that their business is being threatened by the incursion of foreign travel agencies operating outside Nigeria but engaging their customers in the country.

The absence of the local content law in the industry has encouraged foreigners to continually dominate the sector which has stifled its growth. It is therefore imperative for the federal Government to take urgent steps to protect indigenous investments through establishing a local content law in order increase earnings from the aviation sector and also create more jobs for citizens.

It should be noted that the local content development in the aviation industry in Nigeria is arising out of an act established in Nigeria called “Local Content Act’ requiring any company or organization that intends to operate in the Oil and Gas industry in the section 2 of the local content act which states that “All regulatory authorities, operators, contractors , sub- contractors, alliance partners and other entities involved in any project, operation, activity or transaction, in the Nigerian oil and gas industry shall consider Nigerian content as an important element of their overall project development and management philosophy for project execution”.

Buttressing the need for enactment of local content development law in the aviation industry, the General Manager, Air Operators Certification and Surveillance, Nigerian Civil Aviation Authority, Engr. Godwin Balang   called on government to take cue from the success story of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010.

Balang while speaking at the 2019 Public lecture and Annual General meeting of the Nigerian Society of Engineers, Aeronautical Division on the theme “Local Content Development in the aviation industry” expressed concern for the state of the aviation industry in Nigeria, adding that the enactment of law would enhance the development of the aviation industry.

“I think the lack of local content development law for aviation is the heart of why there appears to be lack of traction in the development of local content in the aviation industry despite over 90 years of aviation hands on experience”.

“A brief diagnosis of the aviation industry system reveals a clear lack of consolidated legal instruments within the country that could have under-pinned local content development of aviation in Nigeria. The Nigerian government over the years has made attempts in making well- intended aviation laws but nothing concrete on Local Content Development in the aviation that could be comparable to the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010 and that is the heart of the matter”.

“Let us be more deliberate in the local content development in Nigeria by first passing a law similar to the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010 for aviation. In implementation of such law, safety and quality must not be compromised and therefore where the country lacks expertise, encourage foreign expertise and investment with clear requirements for technology transfer from the foreign experts to the locals” he said.

Also speaking, the Former Managing Director of the Nigerian Airspace Management Agency, Engr. Nnamdi Udoh urged aviation stakeholders to canvass for the legal inclusiveness of the act in the industry.

“In line with the Local Content Act of Nigeria, it is only expedient that professionals in aviation must rise up to ensure the legal inclusiveness of this Act in the aviation industry. The Success story of the oil and gas industry in Nigeria makes this drive imperative for aviation”.

Highlighting the possible areas for application of this law in the aviation industry, Udo said “In creating the required technology transfer dynamics of the industry, it is expedient for us as engineers to establish a road map for local content to be operational in the aviation beginning with and not limited to the following: runway construction and maintenance, airfield lighting, airport terminal buildings and other aerodrome infrastructure, approach and terminal navigational aids, surveillance and other air traffic management (ATM) facilities, ICT based systems used in the airport and the air traffic operations.”

Udoh also noted that relevant regulatory and legal frame work must be put in place to enable the local content Act all inclusive for aviation.

According to him, Its implementation will bring about development in the aviation industry among technical areas and other operational areas such as travel agencies, which will address the decline in their in the air bookings over the recent past as published by NCAA.

Speaking on aircraft maintenance and construction of airports, Udoh called on airlines to collaborate in creating local experts which will result in local material utilization as well as research in airport development.

“Our regular aircraft maintenance programs outside the country demands a collective initiative for localization. It is expedient that our industry must expedite the call for implementing local content laws for its obvious benefits and growths. Recent developments and initiatives like the Chinese terminal building projects in five different international airports in the country demand this urgent line of action which will enhance stable growth in the industry”.

“All existing airlines must take seriously a plan of localizing their maintenance programs by pulling resources to create local experts from the very start of the procurement process of any aircraft. All designs of airport and aerodromes must have local content involvement from concept to construction and sustained maintenance program. The initiative will lead to job creation and local material utilization for construction and subsequent research interest in airport development and other areas. Foreign based business jet operators that fly into the country regularly must meet local content demands in their operation, as already captured in our NCAA regulations. This is the time to act for the implementation of local content development in Nigeria. The oil and gas industry has set the pace and we must catch up and over but using it to develop our industry” he said.

The Former Director General of NCAA, Harold Demuren who was represented by Engr. Emmanuel Osifo also advocated for the training of man power in the aviation sector in order to boost local capacity.

“It is unequivocal that continuous training of the manpower across board including pilots, engineers, air traffic controllers, flight dispatchers and cabin crew will enhance the adequacy of manpower in the Nigerian aviation industry which will eventually lead to the export of such skilled manpower in other African countries. Self sufficiency air craft maintenance capability can lead to local content development in the areas of aircraft and parts design manufacturing in Nigeria”.

Speaking on the importation of aviation fuel into country, Demuren reiterated the need for local production of fuel adding that fuel was produced in the country before now.

“Another area where we urgently need local content development is the production of aviation fuel. In the past, aviation fuel was provided in Nigeria but now we import aviation fuel. To achieve the laudable objective of local content development in the aviation industry in Nigeria, vital roles must be played by the regulator, service providers, airport operators, airlines, ground handling companies amongst others” he opined.

The Managing Director of Centurion Security and Safety Consults, Group captain John Ojikutu also noted that the establishment of a refinery for aviation fuel as well as the employment of jobless pilots would be a right direction towards improving local content in the industry.

“Because fuel is imported, it cost a lot but we can reduce the cost of fuel if we are making it inside this country. If we look around and employ trained Nigerian pilots that do not have jobs, it will reduce the foreign content and add to the local content. Speaking on spare parts, we can also start manufacturing aircraft tyres in the country. There was a time we were manufacturing vehicle tyres. We should have advanced to manufacturing aircraft tyres” he said.

Although, there is no figure or statistics to illustrate the damage which the absence of the local content law has done in the industry, it should be aviation sector would contribute massively to the economy if there is Local Content Act specifically for the industry.