There has been a huge increase in the number of air freight throughputs in Nigeria despite the increasing fare on freight shipment and some associated challenges. WOLE SHADARE, examines the econometric analysis of air cargo freight in Nigeria
Nigeria seems to be lagging behind in the air cargo business, with a high population of goods imported from other parts of the world despite all kinds of agricultural produce with ready markets both local and international.
Historical cargo traffic statistics published by the Federal Airports Authority of Nigeria (2014) for a 17-year period (between 1993-2009) revealed that about 1.286 billion kilograms of cargo were recorded in 19 airports while three others- Akure, Osubi, and Kastina had no cargo traffic (Air CargoSector,2014).
A recent review of the studies in Nigerian air transport reveals that not much attention had been accorded to the flow of air cargo, while deliberate attention had been given to the analysis of the flow of passenger, aircraft movement, and flight operations emphasising safety and security, as well as issues on policy and bilateral agreements.
Most airlines rely so much on the cargo business for revenue generation even though they are not dedicated cargo airlines.
Domestic aviation cargo market size
There are indications that the domestic cargo business is worth N40 billion business which the airlines and government can make a lot of money from, and recommended that the government should close the gap between the volume of import and export of air cargo in the country.
However, many challenges are limiting the sustainability of aviation logistics and air cargo lifting by airlines in Nigeria but not limited including the lack of modernized equipment, Nigerian customs, and Immigration bribery.
Others are the cost of aircraft and maintenance, high cost of freight, poor incentives and government’s quality regulations, low volume of cargo to enhance huge investment in cargo aircraft, deficiency of cargo security, delay, poor intermodal communication, technology, harassment and extortion by law enforcement officials, high rate of robbery attack, multiple taxes, hike in fuel price and many others eroded the efficiency and effectiveness of aviation logistics in Nigeria.
In recent times, the economic and social impacts of air transportation on the region are well accepted throughout the world including Nigeria.
In developing economies, the transportation sector has played a significant role in development. In the millennium era, there has been a huge increase in the number of air freight throughputs in Nigeria despite the increasing fare on freight shipments.
In a situation whereby a region has a vibrant airport, such a region is opened to increase competitiveness. Air transportation can either or both become a factor and an index of economic development.
Conversely, it is an attribute of progress as it enhances transportation within the extended countries that is deficient in adequate land transportation infrastructure, and it connects the country with the rest of the world.
It is also an indicator of development as its volume clearly depends on the level of economic activity with the affluence of the population. Additionally, it can be an indicator to position economic development as is associated with an outward-oriented economy realized from intense passenger or freight air traffic.
According to Flash analysis (2016), the growth in GDP is said to be the major driving force of air freight throughput. Air traffic in terms of cargo has been on the increase in Nigeria with the increase attributed to the government’s rigorous provision of navigational aid facilities, basic aeronautical equipment, and a high level of security at the nation’s airports.
There is a record of high insecurity in the country, this makes the road and air transportation compete on the selected route. The majority of the high-income earner prefers air transport to road transport of their goods because of the level of high insurgency and the assumption that air transportation is safer.
In fact, some middle-income earners join the league of high-income earners by patronizing the air transport service provider all because of insecurity. There is a need to examine the percentage increase in throughputs during the perceived period of insecurity on Nigerian roads and its effect on the economy.
Domestic airports in Nigeria are at different stages of growth, sophistication, and air cargo volumes. Governments understood the need to build legacy projects and capitalize on embedded opportunities, and this has recently been a defining moment for interested state governors.
The Chief Executive Office of Mainstream Cargo Limited, Seyi Adewale at a recent cargo expo in Lagos lauded efforts by the Ogun and Kogi governments to establish cargo airports, describing airports as a critical need for the movement of air cargo, connecting the dots in moving mostly agricultural produce.
“As of date, many agricultural products or farm produce are moved via road transport, particularly from the North and the Middle-Belt to the South whereas finished or manufactured goods, equipment, and material resources move in the direction of the North and Middle-Belt”.
He, therefore, concluded that there is a need to encourage and support state governments to build infrastructure in order to grow their economies, generate IGR and create jobs, noting that supply creates its own demand.
To support the needs of the domestic airport, Adewale advised that Nigeria needs good and effective cargo warehouses within and around these airports.
He lamented that as of today, the country does not have dedicated air cargo airlines operating within the domestic airports, adding that Allied Air appears to be the only cargo airline attempting to do so.
To bridge this gap, a start-up, ValueJet Airlines has concluded plans to begin scheduled cargo operations with the acquisition of CRJ freighter and become the first airline in Nigeria to operate dedicated scheduled cargo service.
Managing Director of ValueJet Airlines, Capt. Dapo Majekodunmi told Aviation Metric that three additional CRJ aircraft are expected by the third quarter of 2023, while one of the aircraft would be a cargo configuration CRJ 200, saying that would be the first such cargo plane operation in West Africa.
“It won’t be the first of such but it is the first locally, domestically. We have had airlines that run passengers and cargo at once. Maybe not much but I can recall two in the 70s and 80s. We had Gas Airline.”
We realised that Nigeria has grown so big now that we need to venture into the carriage of parcels within Nigeria. We have companies like Jumia and others who need to deliver goods. We know the amount of cargo we put in our aircraft based on cargo unaccompanied, so, we want to now make things a lot easier and have a departure time for aircraft going from here to here and all the cargoes are durable.”
“Nigeria is where most people come to buy materials. We are the ones that feed all these neighboring countries with local products. That will be done”, he added.
While it is true that exports play a lot of positive roles in the country’s economy as they contribute to the country’s Gross Domestic Product (GDP) in various ways. Governments at all levels should do everything humanly possible to encourage the sector.
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