Nigeria’s push to attract fresh capital into the aviation sector is weighed down by years of policy inconsistencies, entrenched interests, contract breaches, corruption, and chronic mismanagement, which stakeholders warn could undermine the government’s latest investment drive.
This warning comes as Festus Keyamo, minister of Aviation and Aerospace Development, outlines four priority areas for investment in the Federal Airports Authority of Nigeria (FAAN): airport infrastructure modernisation, a world-class MRO hub, aviation leasing companies, and cargo and logistics centres.
Keyamo said the government is deploying ‘Renewed Hope funding’ to upgrade terminals, rehabilitate runways, expand aprons, and build new cargo complexes, with several projects billed for transparent Public-Private Partnerships expected to guarantee viability and investor returns.
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But BusinessDay findings show that this ambition is not new. Previous attempts to attract significant private capital have repeatedly failed, hard hit by vested interests and contract disputes, many of which remain unresolved.
“If we are looking at investors to come in, we have to deal with policies and security. The government needs to address security challenges and protect investors to attract investments. Investors cannot come in when they see the present relationship between the Federal Airports Authority of Nigeria, (FAAN) and Bi-Courtney, the operator of Murtala Muhammed Airport Terminal Two (MMA2),” Olumide Ohunayo, industry analyst and director of research at Zenith Travels, told BusinessDay.
He noted that despite the stabilising naira, investors still need strong assurances that their funds are safe and that exit options will be respected, just as the government currently provides for dry-leased aircraft.
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“A country with A Category II instrument approach will attract more foreign investors than Nigeria, which still operates Category 1. It is not just about maintaining safety standards that bring investments, but about ensuring institutions protect investments,” he noted.
He stressed that the government also needs to eliminate personal interest in investment, citing the Nigeria Air case which failed as a result of hidden personal interests.
One of the most persistent controversies remains the long-running legal battle between FAAN and Bi-Courtney over the concession of Murtala Muhammed Airport Terminal 2. Courts have upheld Bi-Courtney’s right to operate the General Aviation Terminal under the 36-year concession, yet the dispute continues with no clear resolution.
Efforts to concession the major international airports such as Lagos, Abuja, Port Harcourt, and Kano have also stalled since 2017, facing strong resistance from labour unions wary of job losses and citing the troubled legacy of previous privatisation efforts such as Nigeria Airways. Allegations of opaque bidding processes and an unclear legal framework have further eroded confidence.
As of 2025, the federal government is still considering proposals for airport concessions, emphasising that many airports currently run at a loss, but previous issues remain largely unresolved, with many promises failing to materialise over the last decade.
These repeated failures and on-going controversies have severely damaged Nigeria’s reputation as a reliable destination for international investment in the aviation sector.
“The government is on the right trajectory. The primary errors that must be avoided include barring and ensuring process owners do not have vested interest in any entity. Interested investors must show proven track record in similar or same investment areas, and must pay a reasonable non-refundable deposit that shows seriousness,” Seyi Adewale, chief executive officer of Mainstream Cargo Limited, said.
According to Adewale, the federal government needs to get all critical stakeholders’ buy-in, assure the potential investors of a fair and transparent process and demonstrate that it is not a ‘rent-seeking’ venture.
He said the government must also clear in/exit procedures, and final beneficiaries must not be given super normal privileges.
Samuel Caulcrick, former rector of the Nigerian College of Aviation Technology (NCAT), told BusinessDay that investors are bothered about their return on investment and security of their invested funds, adding that with corporate governance, investors will be comfortable with their investments in the sector.
“My take has always been that governments in Third World countries, characterised by immature financial systems, will have to devise a means of providing their aviation sector with low-cost capital because the sector, traditionally, has a razor-thin profit margin,” Caulcrick said.
He suggested that the government can establish an aviation development bank mandated to handle all financial transactions in the sector, noting that the bank must offer single-digit cost rates.
