FG implements Cape Town convention to boost Nigeria’s aviation industry

By Kunle Sanni

The Federal Government has officially approved the Cape Town Accord on aircraft leasing, a development that is set to revolutionize the airline industry in the country.

This milestone came with the signing of the Cape Town Convention (CTC) Practice Direction by the Chief Judge of the Federal High Court, Justice John Terhemba Tsoho, during a stakeholders’ meeting of the Presidential Enabling Business Environment Council (PEBEC), chaired by Vice President Kashim Shettima at the Presidential Villa, Abuja.

The implementation of the CTC Practice Direction signals the full operationalization of the Cape Town Convention in Nigeria, paving the way for reduced insurance costs for airlines, increased investor confidence, and enabling domestic operators to dry lease aircraft with greater ease.

This move is expected to alleviate longstanding concerns within the aviation industry, especially following past breaches of the treaty by some local operators. These breaches had led to warnings from the Aviation Working Group (AWG), co-chaired by Airbus and Boeing, which had threatened to blacklist Nigeria until proper legal frameworks were in place.

The Cape Town Convention is an international treaty designed to facilitate asset-based financing and leasing of aviation equipment, including aircraft, engines, and helicopters. By fully adopting its provisions, Nigeria aims to restore global confidence in its aviation sector and attract more investments.

Speaking after the landmark signing, Vice President Shettima highlighted the government’s determination to safeguard and promote the nation’s airline industry. He noted that President Bola Ahmed Tinubu’s administration is pro-business, willing to take bold steps to protect the interests of Nigeria.

“It is a great day for the Nigerian nation. We engaged in fruitful discussions across all sectors and arrived at robust solutions to the challenges facing the aviation industry,” said Shettima. “I commend my Lord, Justice Tsoho, for his forward-thinking approach in signing the CTC Practice Direction, which marks a historic moment for the industry.”

Shettima also praised the Finance Minister and Coordinating Minister of the Economy, Wale Edun, for addressing the pressing concerns of airline operators, announcing that further discussions would take place to consolidate the gains achieved at the meeting.

The Vice President reassured stakeholders in the aviation sector that President Tinubu is deeply invested in the growth and preservation of the airline industry, citing recent discussions with the President. “I spoke with President Tinubu about three days ago, and he was keenly interested in the outcome of today’s deliberations. He is committed to promoting and preserving the Nigerian airline industry.”

Minister Edun echoed the Vice President’s sentiments, emphasizing that the signing of the CTC Practice Direction would substantially reduce the costs associated with operating in the airline industry.

“This is a revolution for the airline industry. We will continue to take steps to improve the business environment, including addressing airline operators’ concerns on customs charges, as well as other financial issues,” Edun stated.

Allen Onyema, CEO of Air Peace, also expressed gratitude to President Tinubu, calling the day a historic one for the aviation sector. “President Tinubu has once again demonstrated his commitment to the ease of doing business. Today is a revolution for the aviation industry, and we are extremely grateful for the positive changes being introduced,” Onyema said.

The Special Adviser to the President on PEBEC and Investment, Dr. Jumoke Oduwole, highlighted the broader benefits of the CTC Practice Direction for the Nigerian economy.

“The President’s focus on reducing the cost of doing business, especially in the aviation sector, is already bearing fruit. The high cost of flight tickets is partly due to regulatory challenges, and this new development will help address some of those issues,” she said.

Festus Keyamo, the Minister of Aviation and Aerospace Development, represented by Dr. Anastasia Gbem, reiterated the Ministry’s commitment to enhancing the operational capacity of local airlines.

“This move will reassure international investors of the safety and reliability of doing business in Nigeria’s aviation industry. It is a significant achievement that will boost the entire sector,” she remarked.

Olusegun Omoseye, CEO of the National Insurance Commission of Nigeria, also commended the signing, calling it a major step forward for Nigeria’s aviation sector and its broader economy.

With this regulatory reform, Nigeria is positioning itself as a more attractive and secure destination for global aviation investments, ensuring long-term growth for the industry.