Challenges of State Airports with Limited Resources

Despite the benefits of having airports in every state, many governors have embarked on aerodrome project at the expense of critical facilities of higher utility to the people, writes Chinedu Eze

Building state airports have become a butt of controversy over the years because many observers believe that it is merely to serve the interest of the elite and those in power. They have argued that out of over 200 million population of Nigeria, only about 14 million persons travel by air every year and that includes domestic and international passenger traffic.

Industry observers also noted that it could be erroneous to believe 14 million persons travel by air annually. But a critical look the number of persons that travel by air may not be more than 10 million because when you count passenger traffic, you don’t count individuals.  You count traffic movement. So one person might have travelled 20 times in a year so that individual becomes 20 passenger traffic.

Data indicated that for both arrivals and departures, there was a total of 13.006 million passengers in 2021, and that was 43.3 per cent higher than the 9.069 million passengers that used local airports in 2020, but lower by 3.6 percent than the 13.19 million local passenger movements in 2019. The highest passenger traffic in Nigeria, according statistics from the Federal Airports Authority of Nigeria (FAAN) was in 2014, 2015 and 2016 before the economy began to slide and before COVID-19 pademic hit the world and asphyxiated air travel.

During this period, in 2014 total passenger traffic was 15, 335, 772; in 2015, it was 15, 222, 187 and it went a bit down in 2016 to 14, 564, 722, when economic strangulation began to happen on Nigerians. In these figures, international passenger traffic is about over 4 million; so domestic passenger traffic hovers around 11 million annually. That is about two per cent of Nigerian population.

Cost

In 2021, former Governor of Bayelsa State, Seriake Dickson puts the cost of building the airport in Yenagoa at N70 billion. Many industry observers described it as outrageous. Reports also indicate that the Lagos State government would build the Lekki International Airport at the cost of about N102 billion. Also in 2021 the Anambra State government official stated that the cost of the state owned airport at Umueri was N6 billion ($16 million then) and not $2.2 billion as earlier reported. Kebbi airport was reported to have cost about N17 billion. So from this exposure, it could be said that the minimum cost of airports built by the state governments was about N5 billion. That is too much money to some of the states that are building airport. Ekiti state, for example, relies on federal allocation for about 90 per cent of its revenue and it is one of the states that receives the smallest allocation from the federation account, which is N3 billion to N4 billion monthly.

Industry analysts are of the view that while some of these airports are a boost to the economic growth of the states like the ones in Uyo, Anambra, Asaba; but it is a drain on the resources of some states and that explained why some of these states hand them over to FAAN, thanks to the magnanimity of the federal government.

They also argued that some of the states that build these airports are in dire need of roads to link the state capital to the communities for the movement of agricultural produce and enhancement of rural economic activities in the states. Many of them have very dilapidated schools, no hospitals and even potable water in most of the communities. These essentials, they said, are negated and funds were used to build airport. They also insisted that some of these airports cannot record more than 2000 passengers a year, so why the huge investment?

Also some industry stakeholders say that agrarian states without robust finances would earmark huge amount of money and build airports, insisting that such airports serve the elite at high opportunity cost of providing, for example, potable water, electricity, inward roads that could connect the rural communities to the cities for the movement of farm produce.

The also berate the state government for expecting that they would earn revenue from such projects when feasibility studies said otherwise. That explained why most of the states are handing over their airports to the federal government to manage through FAAN.

Elephant Projects

The Group Managing Director, Finchglow Holdings, Mr. Bankole Bernard told THISDAY on Wednesday that state airports were elephant projects, which is the easiest way the governors steal money by inflating the cost of the project, while spending little on it. So, if the state governors wish to build airports, they should first generate the revenue before deploying it to the project instead of depending on the federal allocation.

Bernard also frowned at the sharing of federal allocation to the states, saying that it makes some governors lazy, blunts their creativity to generate revenue on their own, while some other governors work hard to boost the earnings of their states. He is of the view that the federal government should stop sharing allocation so make the governors innovative, adding that it would ebb the desperation to become a state governor.

The Managing Director of Flight and Logistics Solutions Limited, Amos Akpan, told THISDAY that no state owned and managed airport is currently operating at financial break-even figures, emphasising that their monthly expenses is higher than their monthly income.

“I dare the management of a state airport to publish her monthly financial status: statement of income and expenses. The gap between their income and expenses will continue to widen as need for servicing and repair of infrastructures grow. There are personnel recurrent training and other current expenditures that must be met monthly. Meanwhile they cannot grow income because the government will subsidize their expenses, which induces “laziness” of innovation,” he said.

Akpan also noted that the governors that build these airports need the airport opened for their travels; so commissioner must make request to augment the airport expenses as exigencies.

“These airports become burden to their state government’s finances. They then outsource to private companies. The private company soon realizes that there are other infrastructural inputs critical to the success of that airport, which refers all concerned to setup plan. If the state government belongs to the party at center, they simply deploy their connections and FAAN takes over that airport – this is the convenient shortcut. FAAN herself has said only few of their airports can sustain themselves financially; about four of them. And we continue to wobble, with hiccups along our development path. Cargo airports, agro airports, regional hub airports, international airports, city airports, viable and unviable airports, we don’t lack inventory of names. Airports, airfields, airstrips are classified and published all over the world; our Nigerian Civil Aviation Authority (NCAA) has the department in charge of aerodromes,” he said.

Benefits

But looking at the gains of having an airport, travel expert, Ambassador, Ikechi Uko, recently observed that building airports is good because it enhances easy and fast movement of persons, goods and services and the more states are connected by air the better. Former Group Managing Director of Ethiopian Airlines, Tewolde Gebre Mariam once stated that with four-kilometer runway, a city could connect to the rest of the world. Ambassador Uko noted that investors do not like to travel by road; they like to travel by air, which is faster. For example, a foreigner who wants to invest in farming in Taraba would be happy if he could fly to Taraba state to inspect the farms but would be discouraged if he cannot get there by air.

Key industry operator in response to the criticisms that trailed the establishment of sate airports stated that governors building these airports aren’t really building them for cargo purposes. They are building airports, but designating them ‘cargo airports’ usually makes it easier to justify them. However, every single one of them comes with a passenger terminal building and little or no cargo facilities. In actual fact, there are very few cargo airports (relatively) in the world. Airports do not need to be designated as ‘cargo airports’ as they usually serve dual purposes (passenger and cargo) as the need may be.

“I have learnt not to disparage the construction of airports by State Governors in Nigeria. If they have the honest desire to make them work, they are a great economic gateway. If not right away, then gradually, as long as they know what to do with them, they will eventually come in handy. Uyo is a perfect example. The ‘oyinbo’ textbook prescription says that it would ‘cannibalize’ Calabar’s traffic and create two less viable airports, 10 minutes flying time apart. But alas, yes it did affect Calabar’s traffic initially, but Calabar recovered and resumed its growth side by side Uyo, in the immediate aftermath of the Duke years (due to Governor Duke’s investments and positioning of Calabar then as the local go-to tourist destination).

“With subsequent neglect of that strategic direction and abandonment of that trajectory, Calabar degenerated to the almost no-go place it is today, while Uyo over the last few years became the fastest growing domestic airport. Calabar cannot blame Uyo today for its drop in passenger traffic. It can only blame the economic non-strategy of the state’s government. On the other hand, Bismarck Rewane in his current macroeconomic analysis, names Uyo as one of the 10 fastest growing cities in Africa. Of course the existence of the airport is a major catalyst for this,” he said.

The industry stakeholder also noted that Asaba too, is another potential example.

“They seem to have finally taken sensible decisions there about developing the airport. There’s space for it to grow independent of and with limited impact on Benin (as long as Edo State know what to do to boost economic activities their domain). Ditto the new Anambra airport at Umueri. Those four airports (Asaba, Awka, Enugu and Benin) can co-exist and grow independently without killing each other, while interdependently feeding four different economic eco-systems,” he said.

“I am more than convinced that there’s space for every one of them to become good economic catalysts for their catchment areas, if ‘sense’ is applied. Once an airport has been built, it is there. Those around it have a responsibility to apply ‘sense’ to it to make it a catalyst, rather than use it as a cash cow forever as Delta (state) initially tried to do for many years. What a waste that was! So we should encourage those Governors who choose to build airports to use proper consultants and proper construction companies and build efficient and cost effective, fit-for-purpose airports, to reduce the colossal waste we usually see from these projects. But it is what it is,” he added.

But looking at the airports and their viability, there are varied opinions that not many of the airports can yield revenue or become economic catalyst due to the status quo of the state it is built. For example, when Kebbi airport was built, it was said that it would be a gateway for the export of onions, which was being exported to North African country or countries. But since the airport became operational and at the cost of about N17 billion, it has not serviced the export of any farm produce to anywhere outside the country. It is similar fate that will be suffered by Ekiti airport and Bayelsa airport.

Such humongous expenses for projects that are not of high utility by the majority of the people of the state are misplaced expenditure.