Nigeria To Create National Leasing Organization

Nigeria plans to set up a national leasing company, to ease the acquisition of aircraft by the country’s carriers.

The country's aviation and aerospace development minister, Festus Keyamo, made the announcement following a meeting of the country’s Federal Executive Council (FEC) on May 2.

The FEC approved the establishment of the Nigeria Aircraft Leasing Company (NALC), he said. “This will be an SPV [special purpose vehicle] that will be wholly run by the private sector. The private sector will invest in it; in fact, we have investors already. They’ve just been waiting for this approval.”

Importantly, he added, although run by the private sector, the new organization would have the backing of the country’s government.

“The federal government’s role is just to guarantee the lessors and franchisors ... the repossession of the aircraft,” he said. The government would have equity in the new company, he said.

Nigeria, although the most populous country in Africa by far, with more than 240 million inhabitants, has a weak and fragmented domestic airline scene, with a small number of companies generally operating small fleets. It has been without a national flag-carrier for more than a decade.

In the past, the country’s airlines have struggled to source aircraft from overseas lessors; only in 2022 did the country pass legislation enforcing the Cape Town Convention, which enables aircraft lessors to reclaim their assets in the event of an airline failing.

Keyamo described the new leasing company as “a game changer for our aviation industry. It eliminates the long-standing challenges Nigerian airlines face in accessing aircraft on competitive terms, and positions the country as a hub for aviation financing in Africa.”

NALC will enable airlines to source aircraft through a centralized system rather than negotiating individually with international lessors, he said, without giving details.

“This SPV will have some of the biggest financial bodies in Africa who are ready to invest in it because we have the market, we have the traffic, we have the population, we have the routes. So, this is the franchise we are selling to the world," Keyamo explained. 

Noting the investors "know the [new] aircraft will boost the market," Keyamo added that, "ninety-five percent of our traffic in Nigeria is being carried by foreign airlines. We have to dip into this market, to claw some back, and the only way to do that is to let them have access to equipment. That is what NALC is about to achieve.”