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Six Banks Pay N155.45bn Into AMCON In Three Years

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Six commercial banks have made payments totalling N155.45 billion into the sinking fund of Asset Management Corporation of Nigeria (AMCON) within three years.
Reports say that Access Bank, GTBank, United Bank for Africa (UBA), Fidelity Bank, FCMB Group and Sterling Bank made the payments between 2015 and 2017.
Data obtained from the banks’ annual reports showed that Access Bank paid the highest amount of N39.59 billion; N12.06 billion in 2015, N12.06 billion in 2016 and N15.47 billion in 2017.
It was followed by GTBank which paid N35.09 billion; N10.63 billion in 2015, N11.39 billion in 2016 and N13.07 billion in 2017, respectively.
UBA contributed N34.85 billion; N11.08 billion in 2015, N11.08 billion in 2016 and N12.69 billion in 2017.
Reports also said that Fidelity Bank paid a total of N18.60 billion, being N5.94 billion paid in 2015, N6.16 billion in 2016 and N6.50 billion in 2017.
FCMB Group accounted for N16.94 billion, N5.66 billion in 2015, N5.62 billion in 2016 and N5.66 billion in 2017, while Sterling Bank contributed N12.38 billion, N4.13 billion in 2015, N4.04 billion in 2016 and N4.21 billion in 2017.
According to reports, the Central Bank of Nigeria (CBN), on January 1, 2011, signed an agreement with banks operating in the country to establish the AMCON sinking fund.
The agreement required the CBN to contribute N50 billion and the banks an equivalent of 0.3 per cent of their total assets as at the date of their audited financial statements, annually for ten years.
However, the contribution, a non-refundable levy on all banks in Nigeria, was increased to 0.5 per cent in 2013.
The fund does not represent any ownership interest, neither does it confer any rights or obligations (save to pay the levy) on the contributor.
The money from the fund is used to purchase Federal Government securities and the returns from the investment is redistributed among the contributing banks.
The sinking fund has, however, attracted opposition from shareholders of many banks who have called on the Federal Government to scrap it to enhance shareholders return.
Specifically, National Coordinator, Progressive Shareholders Association of Nigeria, Mr Boniface Okezie, called on the Federal Government to wind down AMCON.
Okezie said that shareholders had been shortchanged by the corporation, and that the contributions to the sinking fund would have translated to huge dividend to banks’ shareholders.
He said shareholders would resort to court action if government elongated the lifespan of AMCON.
“If government dares us and elongates the lifespan of the corporation, we will go to court to challenge the decision when the time comes,” Okezie said.
Also, Publicity Secretary, Independent Shareholders Association of Nigeria, Mr Moses Igbrude, said AMCON was an emergency toxic vehicle established by the government through the CBN and stakeholders then to save the situation at hand.
Igbrude said that the government needed to evaluate the performance of AMCON to ascertain if it met the expected set goals.
He noted that the corporation’s objective was to buy banks’ toxic assets to stabilise and to avoid the collapse of the financial sector.
Head of Banking and Finance Department, Nasarawa State University Keffi, Prof. Uche Uwaleke said that all over the world, asset management companies were crisis resolution vehicles with clear mandates and a clause that defines their terminal dates.
Uwaleke called for a review of the the operations of AMCON with a view to ascertaining its continued relevance to the country’s financial system.
He urged the government to examine the extent to which the corporation had helped to curb non-performing loans in the banking sector.
However, Prof. Sheriffdeen Tella of the Department of Economics, Olabisi Onabanjo University Ago-Iwoye, Ogun is of the opinion that the problems that necessitated AMCON are yet to be fully resolved and it should be given more time to wind down.
“There is no need for the institution to wind down prematurely, else the need to resurrect it or bring up another body for the same job might be inevitable,” Tella said.
He said that the issue of unnecessary levy could be resolved by the intervention of the Chartered Institute of Bankers of Nigeria, the apex bank and AMCON.
AMCON’s Chief Executive, Mr Ahmed Kuru, said recently that with the recession, the rate at which banks’ assets were growing had reduced, affecting their contributions to the sinking fund.
Kuru said if banks’ debt to the CBN were not fully repaid before 2023 when the corporation is expected to wind down, they would continue to pay into the fund which will then be transferred to the CBN.

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NSIB, AAAU Sign MoU On Air Safety Training

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As part of efforts to curb mishaps in the aviation industry, the Nigerian Safety Investigation Bureau (NSIB) has signed a Memorandum of Understanding (MoU) with the African Aviation and Aerospace University (AAAU) to deepen training on preventing and reducing accidents in Nigeria’s air transport.
Director, Public Affairs and Consumer Protection of NBIS, Mrs Bimbo Olawumi Oladeji, in a statement, said NSIB granted AAAU access to its facilities to facilitate an efficient exchange of resources and expertise.
According to the statement, the Director-General/Chief Executive Officer of NSIB, Captain Alex Badeh, who spoke at the ceremony held at the NSIB Training School, noted that the MoU sets the stage for facility sharing, capacity building, and collaboration between the Bureau and AAAU.
“I am confident that this MoU will enhance the effectiveness of our collaboration and commitment to promoting safer skies and operational excellence in the aviation industry in Nigeria and beyond”, Badeh said.
Registrar of AAAU, represented by the Director of Physical Planning and Works, Engineer Masud Aliyu Yerima, was also quoted in the statement, saying, “The journey of AAAU’s establishment and progress would have faced considerable challenges without NSIB’s generous support”.
He commended Badeh for his exemplary leadership and steadfast dedication in propelling NSIB to greater heights, and affirmed AAAU’s readiness to engage in mutually beneficial endeavours with NSIB.
“This partnership marks a significant milestone in fostering a culture of safety and excellence within Nigeria’s aviation sector, and both NSIB and AAAU are poised to leverage this synergy for the benefit of the industry and the nation at large.
“The African Aviation and Aerospace University, AAAU, is the first Pan-African university dedicated to aviation, aerospace, and environmental science.
“Addressing two critical needs within the continent’s industry, AAAU tackles the research and development gap in Africa’s aviation and aerospace sector while simultaneously cultivating a skilled workforce to propel it forward”, the statement added.

By: Corlins Walter

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Naira Rebound, Air Peace’s Expansion Deepens International Route Competition 

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he commencement of flights operations on the London route by an indegenous Carrier, Air Peace Airline, and the recovery of the local currency have sparked fresh competition on international routes.
Air Peace, Nigeria’s outstanding indigenous airline, may face a prolonged market battle with many foreign airlines with decades of experience in the industry following its entrance on the Nigeria-London route.
Some of the industry’s experts say the airline required support from the government and a strategic approach to stay competitive.
Analysts have also stated that the strategic move has garnered high praise from stakeholders in the aviation sector, considering that Nigerians were paying exorbitant prices to travel from Nigeria to London, but that sustaining this momentum will require more than just offering low prices.
On March 31, 2024, the 11-year-old airline made a bold statement with its inaugural flight, using a Boeing 777 aircraft, offering a capacity of 274 seats and carrying 260 passengers from Lagos to London.
It sold its tickets for N1.2m, a price way lower than the rates offered by most foreign airline operators plying the same route.
Just two weeks after entering the market, Air Peace’s Chief Executive Officer, Allen Onyema, complained on Arise TV that foreign airlines were undercutting prices in an attempt to push Air Peace out of the market.
Onyema said, “We are aware that there are devilish conspiracies. All of a sudden, airlines are pricing below the cost. One airline is advertising $100  and the other $350. If you peel up your entire aircraft and carry people on the wings, it is not even enough to buy fuel.
“Why are they doing that? Their government is supporting them because Nigeria has been a cash cow for everybody. The idea is to take Air Peace out, and the moment they succeed in taking Air Peace out, Nigerians will pay 20 times over. It would happen, God forbid, if they were able to take Air Peace out”.
It was gathered that an economy ticket for a flight scheduled for April 29, 2024, from Lagos to London costs about N679,375 on Ethiopian Airlines, an operator with 75 years of experience.
Air Peace priced the same ticket at N1,090,750. The difference is that on Air Peace, it will be a 6-hour non-stop flight, while on Ethiopian Airlines, it will take 16 hours with one stopover.
Last Friday, Ethiopian Airlines reduced the price of its London ticket by 0.77 per cent to N1,628,660 from  N1,641,249 two weeks ago.
In the same period, Air France’s price dropped to N1,687,824, nearly halving from last month’s N2,482,138.
On March 4, 2024, Lufthansa offered the Lagos-London route for N1,966,165. Qatar Airways provided the same ticket for N2,016,824, and KLM priced it at N2,448,740.
This continuous decline in air ticket prices was also driven by the strengthening of the naira against the US dollar and the payments of airlines’ trapped funds by the Central Bank of Nigeria.
Minister of Aviation and Aerospace Development, Festus Keyamo, had confirmed that the Federal Government, through the CBN, had cleared all the trapped funds (foreign exchange backlogs) to the tune of about $160m.
Beyond the ongoing price war, the Air Peace Chairman had also lamented the challenges with ground handling and space allocation at the London Gatwick Airport, adding that no airline has faced such obstacles before.
He noted, “On the inaugural flight out of London, 24 hours before departure, the management of Gatwick Airport moved us to another checking area instead of the designated one.
“The area they provided had a malfunctioning carousel, forcing us to manually transport luggage 50 meters away, causing delays”.

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PH Airport Users Lament Down Turn In Flight Operations 

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Users and business operators at the Port Harcourt International Airport, Omagwa, have decried the downward trend in flight operations at the airport.
Some of the users and operators told The Tide that flight operations at the airport, rather than go upward, have steadily been irregular, and diminishing steadily.
A regular air passenger of the airport, Simeon Echeonwu, in a chat with The Tide, said many airlines, both domestic and international operators, that usually operate at the Port Harcourt airport, have stopped operations, whereas others that are still operating are no longer very stable as before.
Echeonwu noted that airlines such as Aero Contractors, United Nigeria, and Green Africa airlines, now operate about one flight, twice a week, unlike before that they flew every day on Lagos and Abuja to Port Harcourt.
Also speaking, former Chairman of the FAAN Accredited Car Hires Association, Clifford Wahunoro, lamented that the down turn in Operations has affected the business of car hires.
“If you have noticed, I have not been regular at the airport for some time now, because business is no longer flowing at the airport as before. I will not fold my hands and be sitting down doing nothing, so I have to look for other things, so I come when I think there will be something.
“You can see that between 12noon and 1pm, after that segment of flights, when you have few flights arrival, many people will close for the day, and when you wait till evening, flight like Dana may come very late at night, and sometimes, it will not arrive, and by that time, many people will not like to book for commercial vehicle”, he said.
Meanwhile, a travel agent, who wished to be anoyimous, decried the rate at which the airport is going down in terms of flights operations, noting that Port Harcourt airport ought to be competing with the other major airports like Lagos and Abuja.
He queried if such was a calculated attempt to bring the airport to its kneel in terms of flight operations, while other major airports have steady flow of flight operations both for domestic and international.
TheTide observed a continuous distortions in flight movement at the airport. Some of the airlines, like Max air, which many passengers patronize, have completely stopped operations, and no new airline has been added.
Apart from the Air Peace Airline that has maintained some level of stability in operations, other few operators have been involved in either steady rescheduling of flights, cancellation and regular delay, resulting in poor and unpredictable flight movement, which affects or determine other businesses in the airport.

By: Corlins Walter

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