*Only Two Of Nigeria’s 33 Projects Profitable-Rewane
*Katsina, Ibadan, Calabar Spend More. Than They Earn
Amid moribund Airports adoning headquarters of some States of the federation, and plans to build new ones by other states, analysts, including Bismarck Rewane of the Financial Derivatives Company have painted a disturbing picture of Nigeria’s aviation sector, noting that majority of airports operating in the country are not doing well financially, and therefore, unsustainable.
Similarly, other Analysts including Friday Ameh, say, it will amount to financial waste for any state government to contemplate on establishing one giving the hostile business enviroment both locally and internationally
Specifically, Rewane, in the May 2025 edition of his Lagos Business School breakfast session titled, “100 Days of Chaos or Genius: What a Difference 100 Days Can Make.” pointed out that only two of the 33 airports in the country are profitable, while only three are responsible for handling 92 per cent of air traffic in Nigeria.
Analysing Nigeria’s aviation sector, Rewane pointed out the country’s extensive airport infrastructure, including 33 airports, 13 airstrips, four military airfields, and 128 helipads.
However, the foremost economist emphasised the severe financial unsustainability of many of these facilities, citing data from 2017-2019 where major airports like Katsina, Ibadan, and Calabar consistently spent significantly more than they earned.
“However, only three airports handle 92 per cent of all traffic and only two airports are profitable.
“Between 2017 –2019, Katsina Airport earned N250.8 million, spent N1.58billion; Ibadan Airport earned N349.2 million, spent N1.39 billion; Calabar Airport earned N540.8 million, and spent N2.5 billion.”
He declared that, “many airports are financially unsustainable, necessitating their concession,” he said.
It is against this backdrop that the recent approval by the Federal Government of Kogi’s Bid to Build an International Airport in Zariagi, has become a grave concern to analysts and some stakeholders in the state.
Metrobusinessnews.com (MBN) gathered that some of the governors, who are either in the National Assembly or still relevant in politics, during their tenure, constructed Airports, but were going to Abuja every month on chartered flights.
The airports are lying wastes at the states’ headquarters.
However, the State Commissioner for Information and Communications, Mr Kingsley Fanwo, said recently that the approval was conveyed in a letter by the Federal Ministry of Aviation and Aerospace Development, dated 9th October, 2024.
Fanwo said the administration of Usman Ododo was committed to the timely completion of the project with strict adherence to regulatory standards, saying an airport in Kogi State would serve 10 other states and reduce traffic on the Lokoja -Abuja road. It will also decongest the traffic on the International Airport in Abuja.
“The Ododo Administration has considered it a top priority for Kogi State to have an International Airport and join the league of the aviation hub. The strategic location of the state is no doubt, an invaluable advantage in harnessing the aviation service market as the centre of the nation.
“The project will not only boost the economy of the State, it will also create jobs and bring the potentials of the state to the global scene.
“The Governor is determined to hire the best hands in the industry to make the project a huge success. As you are aware, aviation is an industry of trust and standards.
“We thank President Bola Ahmed Tinubu, GCFR and the Aviation Minister for the historic approval that will help to further develop Kogi State. We want to also say that the Airport will also have capacity for Cargo as that is one of our key focuses in the project,” the Commissioner stated.
Fanwo assured the people of Kogi State that the Administration of Alh. Usman Ododo would continue to execute laudable projects to consolidate the gains of the last eight years in Kogi State.
Zariagi is a very strategic community that already boasts of an airstrip. The team from the Ministry of Aviation and Aerospace Development was satisfied with the location and the plans of the Kogi State Government on the project, he said.
But, Ameh and ithee stakeholders have disagreed with the stand of the state government, insisting that airport building should not be the priority of a young administration like that of Ododo, in a state that is deficient in infraastrututal development.
According to Ameh, “How can a Governor in his first term decide to embark on such a critical and capital intensive project, like an airport, with some many issues on ground even before he assumed office. We are talking of a state whose civil servants and pensioners have suffered untold hardship and deprivation for a long time, and most of them are yet to fully recover, even as the Governor has commenced payments of salaries and pensions in full. This is a state that the only Ganaja road at the headquarters in Lokoja, is perpetually under repairs; most of the Local Government headquarters cannot boast of a motorable road, not to talk of feeder roads. Also, erosion has done great damage to the lives and livelihood of residents of most local governments. There is also infrastructure decay at both secondary and primary schools. How can such an administration think of an airport, with the Commissioner, claiming that governor ‘Ododo would continue to execute laudable projects to consolidate the gains of the last eight years in Kogi State’.
As a way out for the moribund Airports, Rewane recommended concessioning, underscoring the urgent need for structural reforms to improve efficiency and attract private capital, rather than embarking on new ones as being contemplated by some states.
Similarly, his insights into Nigeria’s fiscal breakeven point and the Naira’s vulnerability to oil price fluctuations highlight the critical importance of fiscal discipline and realistic revenue projections for economic stability.
According to him, the potential global economic headwinds under a second Trump administration further underscore the need for prudent economic management in Nigeria.
Rewane projected that not concessioning the airports as well as further forex depreciation would cause airfares to surge further while passenger traffic would continue to decline.
The outlook, according to him, was that, “airports stay inefficient and underfunded” resulting in “more flight cancellations and reduced frequencies” and weakening in the sector’s stability.
He, however, projected that concessioning plus naira appreciation would ease airfares slightly, attract more investments to the airports, attract investment, and enhance infrastructure and service quality.
READ ALSO:Kogi Bishop Decries Decay In State’s Education Sector
Rewane added that airlines would benefit from better ground support and turnaround times amidst passenger volume recovery as “profitability and growth outlook strengthen turnaround times.”
He also defined fiscal breakeven as the crude oil price at which oil revenue is equal to government spending, pointing out that “Nigeria’s fiscal breakeven is $60 per barrel.”
Rewane stated that an oil price below $50 per barrel means fiscal pressure that could expand the country’s fiscal deficit between six and seven per cent, projecting that the Naira could weaken to between N1,800/$ and N1,900/$ if this happens.
In another scenario, he also highlighted that an oil price that is between $50 per barrel and $60 per barrel would amount to fiscal pressure, with fiscal deficit expanding to between four and five percent per cent, which could see the Naira weaken to N1,700/$ and N1,800/$.
Further analysing the crude oil price movement, Rewane noted that a crude oil price between $75 per barrel and $80 per barrel could be a fiscal consolidation and a return to status quo.
Rewane further stated that Nigeria’s ability to meet its oil revenue targets was concerning as oil production declined by 4.76 per cent to 1.4mbpd in March 2025.
“Revenue target: N36.35 trillion, with 56 percent expected from oil sales (N20.36 trillion). However, actual production is below the budget benchmark by over 300,000 bpd.
“Global oil prices also fell sharply, trading slightly above $60pb in May 2025. So, Nigeria’s ability to meet its oil revenue targets is concerning,” Rewane said.
He also said that the future path of the Naira remained uncertain, adding that the drivers of exchange volatility are demand-supply imbalance, speculative activities, government payments and fiscal pressures and structural FX market issues.
Weighing in on development in the global economy, he stated that the first 100 days of President Donald Trump’s second term was characterised by tumble, rumble and crumble.
He said: “Markets tumbled, losing 5-9 per cent; Investments and portfolios crumbled; global trade crumbled; the US economy (GDP growth) went from 2.4 per cent to -0.3 per cent.
“If there is one more quarter of negative growth, the world’s largest economy will be officially in recession.”