Lack of adquate cold storage and handling capacity for agricultural exports in Nigerian airports is crimping produce outflows and costing the country an estimated N100 billion annually, accruable from stepped up exports of perishable goods.
This is coming on the back of a botched ‘aerotropolis’ project incorporating an extensive airport remodeling, meant to improve cargo terminals in 13 airports across the country, as part of the Federal Government’s efforts to increasing the export of perishables. The Federal Airports Authority of Nigeria (FAAN) estimated in 2013 that with 13 airports equipped to handle perishable agri produce, the country would have the capacity to earn N100 bn from the export of such commodities annually.
The airports proposed by FAAN for cold storage facility were Abuja, Akure, Calabar, Ilorin, Jalingo, Jos, Kano, Lagos, Makurdi, Minna, Owerri, Port Harcourt and Uyo. FAAN had said at the time of the proposal, that the perishable cargo facilities, which are close to states known for food production would be developed to best global standards to enhance their operations.
The airfreight project which was conceived in 2013 by the former minister of aviation, Stella Oduah, aimed at boosting Nigeria’s cargo handling of perishable goods for export to countries like the United States of America, China, Turkey and other European countries. The government in power then lost the election soon after, and as political economists say is often the case in developing countries, policy flip-flops set in and the previous government’s projects are cast off or slowed down.
“Three years after announcing the construction of the 13 cargo airports across the country, it is disappointing to know that till date, nothing is on ground. This shows that government has failed in its promise to invest in this project,” Nogie Meggison , Chairman, Airline Operators of Nigeria told BusinessDay.
Sonny Echono, a Permanent Secretary, Federal Ministry of Agriculture and Rural Development, last year said “Post-harvest losses (in Nigeria) have been estimated to range between five and 20 per cent for grains; 20 per cent for fish and as high as between 50 and 60 per cent for tubers, fruits and vegetables.”
“I heard that three years ago, the government said it would make 13 airports viable for cargo but till date, we have not seen any move by the government to bring that plan to reality,” Aloy Igwe, Chairman, Association of Nigeria Licensed Custom Agents told BusinessDay.
“The major challenge we face with airfreight is that almost all the hinterland airports are not viable and most airlines do not patronise them because they are not viable. There are usually no direct flights from there and with the challenge of high air fares, the owners would prefer using road transportation,” Igwe said.
Statistics from the Food and Agriculture Organisation (FAO) indicate that in developing countries, including Nigeria, there are high postharvest losses in the early stages of the supply chain, mostly because of the financial and structural limitations in harvest techniques, storage and transport infrastructures, along with climatic conditions which hasten produce decay. Nigeria is gradually losing its share of exports with attendant negatives on forex earnings, as evident in a 56 percent decline in export to ECOWAS countries.
Also, industry watchers see perishable cargo export providing hundreds jobs for Nigerians, especially the youth, in the first two years of its take-off.
The expectations of industry stakeholders were high on conception of the project, considering its potential to transform Nigeria’s economy and the attendant impact on the earnings of rural farmers. Igwe explained that apart from Abuja, Lagos and Kano, other airports do not have direct flights going outside the country and people cannot get regular flights to anywhere from these terminals.
“Nobody will put his airplane where they will not get enough cargo. Some of the airports are very small and they can only accommodate private jets and helicopters,” Igwe added. BusinessDay checks reveal that Akure Airport does not have ground handling companies around the airport and that the airport can hardly accommodate wide-bodied aircraft. What holds for Akure likewise holds for Jalingo, Minna and Markurdi airports.
Further findings by BusinessDay show that Ilorin does not have storage facilities in and around the airports. Owerri Cargo Airport was to serve Aba, Owerri, Enugu and other markets and industrial clusters in the eastern parts of the country for imports and exports, but still do not have adequate runways to carry large aircraft and there are no regular flights in this airport. Uyo Airport handles one or two flights daily, with no cargo planes or shipments. One or two local airlines go to Jos but there is no cargo traffic.
Lagos, Abuja, Kano and Port Harcourt continue to handle passenger traffic, as they have always done and receive the largest amount of cargo in and out of the country. An official in the Nigerian Aviation Handling Company Plc, Nahco Aviance, who craved anonymity said, “If
the plan about cargo airports had been put into action, we should actually be making much more money than we are currently making, handling cargoes.
“We have excess capacity and huge warehouses to handle cargo but we lack infrastructure and there is no campaign to increase foodstuffs movement by air,” the source added. Records from the Nigerian Aviation Handling Company Plc (Nahco Aviance) reveal that cargo volume in Nahco for the first quarter of this year (Jan – March 2016) was 17,696,781kg a sharp reduction in the volume for the previous year (2015) which stood at 23,494,441kg .
Seyi Adewale, chief commercial officer, Nigerian Aviation Handling Company Plc explained that the reasons for this reduction include high exchange rate, access to forex, government’s restrictive policy on imports, no stricter compliance to rules & regulations regarding import tariff, surcharges and lower purchasing power of consumers etc.
BusinessDay checks show that NACHO only operates in Lagos, Abuja, Port Harcourt, Kaduna, Kano, Enugu and Owerri, while Skyway Aviation Handling Company Limited, (SAHCOL) only have warehouses in Lagos, Kano, Abuja and Port Harcourt. Basil Agboarumi, manager, corporate communications, Skyway Aviation Handling Co. Ltd. (SAHCOL), told BusinessDay that beyond setting up a cargo airport, there are a lot of things that need to be done first before putting the cargo airports to use.
“The government needs to empower our farmers and establish functional processing industries in these areas that will be producing goods that will be exported,” Agboarumi said.
Nogie Meggison cited an example of South Africa which depends on tourism and mineral resources, adding that Nigeria which has huge resources for export lacks infrastructure to create wealth, using these resources.
“The roads leading to the airports should be repaired and constructed properly before a cargo can kick off in these airports and the packaging should be done to attract investors,” Meggison said.
Meggison explained that if there are industries equipped for meat and tomatoes processing, then they can be sent through air freight, thereby avoiding wastages. Countries like Kenya, South Africa, Benin, Cote d’Ivoire, Ghana, Senegal, Ethiopia, Tanzania and Egypt are participating in trading in commodities such as fruits, fresh fish, vegetables and flowers while Nigeria, which produces these produce in abundance, records zero participation. Seyi Adewale, chief commercial officer, Nigerian Aviation Handling Company Plc, said “The Dongote Group has branches all over Africa and some of their raw materials are exported from Nigeria to other countries. With Dangote’s shipment alone, the volumes will radically increase. If not for restrictions in nations like Europe on packaging, or meeting their exporting standards, we will have had much more exports than we do today.
