Nigeria’s new aircraft leasing plan lets airlines pay in naira, says Minister

The Minister of Aviation and Aerospace Development, Festus Keyamo, says Nigeria's new aircraft leasing company will let airlines buy planes through local deals and pay in naira instead of dollars.

Mr Keyamo shared this news while talking at the first African Air Transport Conference in Lomé, Togo.

He mentioned that the Nigeria Aircraft Leasing Company will be funded by private investors but will have government backing to make it attractive and less risky for aircraft owners and lenders.

This initiative aims to help local airlines tackle one major problem, getting aircraft at affordable prices. "We have also floated in Nigeria the aircraft leasing company, Nigeria Aircraft Leasing Company, that will be fully privately funded," he said.

He explained that the federal government will keep a small share in the company because of the guarantees it will offer.

Government backing

Mr Keyamo said President Bola Tinubu has approved this plan and that talks with potential investors are still ongoing.

He added that the company might receive tax breaks and other benefits to draw in investments.

According to him, the government guarantees will give confidence to aircraft lessors and lenders while reducing risks tied to financing deals in Nigeria.

"This is a big de-risking factor for lessors and creditors," he said.

The minister also talked about Nigeria's use of the Cape Town Convention and the Irrevocable Deregistration Export Request Authorisation (IDERA). This allows planes to be deregistered and exported quickly if operators fail to meet their obligations.

Paying in naira

Mr Keyamo said a major benefit of the new leasing company is that Nigerian airlines will be able to make payments in naira.

Right now, many airlines need to get dollars to pay foreign aircraft owners, which exposes them to changes in exchange rates and currency shortages.

With the new plan, he said airlines will work with the local leasing company, while the company will handle foreign currency payments.

"The airlines can then transact in naira at a local rate with the local company," he noted.

The minister said this setup will reduce financial stress on airlines and make it easier to get aircraft.

He also mentioned that joining the leasing company will not be mandatory, meaning airlines can still look for better deals elsewhere if they want.

Mr Keyamo said the long-term aim is to grow the platform beyond Nigeria.

"It’s going to spread to the whole of West Africa and Central Africa. It’s going to be a leasing platform for the whole of Africa at some point," he said.