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FG May Convert Arik, Aero Contractors To National Carriers Over Unsettled Debts — AMCON

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The Asset Management Corporation of Nigeria (AMCON) has proposed merging Arik and Aero Contractors airlines and transforming them into a national carrier.

AMCON’s Managing Director/Chief Executive Officer, Gbenga Alade, revealed this plan during an interactive session with media executives in Lagos on Monday.

Alade explained that both airlines are heavily indebted and may be unable to repay their debts.

He disclosed that AMCON had previously presented the idea of converting the two airlines into a national carrier to the former aviation minister, but it was rejected.

The proposed merger and transformation aim to address the airlines’ financial challenges and potentially create a stronger, more sustainable national carrier.

“The former management of AMCON presented the idea of converting Arik and Aero to a national carrier. But the former aviation minister did not buy the idea. We will present it again because that is the best option.

“Unfortunately, the special purpose vehicle that was created by the former management of AMCON for the conversion of Arik and Aero to a national carrier had been sold. But we can create another SPV this,” he explained.

Recall that the former Minister of Aviation, Hadi Sirika, launched the Nigeria Air three days before the end of former President Muhammadu Buhari’s administration.

The development had elicited concerns among stakeholders over the ownership arrangement which gave Ethiopian Airlines a 49 percent equity stake in the company.

The Federal Government had a 5 per cent equity, while a consortium of three Nigerian investors had 46 per cent.

Reacting to the deal in June 2023, the House of Representatives asked the Federal Government to suspend the operations of Nigeria Air, describing it as a fraud.

In August 2023, the incumbent minister, Festus Keyamo announced that the national carrier project was suspended till further notice.

Keyamo said, “It remains suspended. It was never Air Nigeria. It was not Air Nigeria. That’s the truth. It was only painted Nigeria Air. It was Ethiopian Airlines trying to flag our flag.

“If it is so, why not allow our local plane to fly our flag? So nobody should dispute that it was Nigeria Air.

“Air Nigeria must be indigenous, must be wholly Nigerian, and must be for the full benefits of Nigeria, not that 50 per cent of the profit is for another country.”

Recently, a Federal High Court sitting in Lagos halted the sale of Nigeria Air to Ethiopian Airlines.

The court declared null and void, the sale of the shares of Nigeria Air to Ethiopian Airlines after determining the issues in the suit.

Justice Ambrose Lewis-Allagoa ordered that the Federal Government’s plans to establish a national carrier, Nigeria Air, should be halted.

The judgment was delivered in favour of the Registered Trustees of the Airline Operators of Nigeria and five other aviation industry stakeholders.

At the briefing on Monday, Alade said the present status of Arik and Aero Contractors had been giving him sleepless nights.

“Believe me, it is a very difficult problem to resolve, and it is giving me sleepless nights, particularly Arik.

“Arik is owing so much that they cannot pay,” he stated.

Speaking further, Alade said, “There is a way out. We have met all their major international creditors. Afreximbank is one of them. They (Arik) are owing Afreximbank about $52m.”

After negotiations, he said the airline was only willing to take $8.5m out of the $52m.

“However, where will that $8.5m come from? Where? AMCON doesn’t have money of his own to put there? And then they negotiated and said, okay, ‘let’s take some of the engines of those things away in full and final settlement’. And the truth is that, if they took those engines away, Arik is finished.

“But we said ‘no, we cannot allow you to take it away. Let AMCON give you a kind of bank guarantee. And we will stretch it so that three planes are flying now and by the Lord’s grace, by February next year, we want to make seven planes fly for Arik,” he stated.

Recall that the Nigerian Airspace Management Agency grounded aircraft owned by Arik over a court order instituted by the airline’s creditor and billionaire businessman, Arthur Eze.

Eze had approached the court in protest against his unpaid $2.5m by the founder of Arik Air, Johnson Arumemi-Ikhide.

In a statement by the spokesperson of NAMA, Abdullahi Musa, the agency said the development stemmed from an enforcement action by the FCT High Court on July 19, 2024, which involved attaching Arik’s planes to secure the debt.

In 2016, AMCON took over the management of Aero Contractors after it dissolved the board of the company, appointing a manager to run the affairs of the company in an interim capacity.

AMCON said in a statement by its media consultancy firm that the decision to take over the management of the company was in furtherance of its responsibility of acquiring eligible bank assets and putting them to economic use in a profitable manner.

Similarly, Arik Air, founded by Mr Arumemi Johnson, was taken over by AMCON in 2017 after the carrier’s management failed to honour its debt obligation running into several billions of naira.

AMCON had taken over debts from local banks owed by Arik.

Last year, the corporation asked the owners of Arik to present a credible debt resolution plan to the bad debts manager if it hopes to recover the company from the Federal Government.

  • AMCON’s Asset Recovery Efforts

In a move to recover outstanding debts of nearly N5tn, Alade announced plans to engage international asset tracers to locate and recover assets hidden by recalcitrant debtors offshore including those masqueraded under special purpose vehicles.

Alade stated that since the new management took over about five months ago, they have successfully collected approximately N100bn from several high-profile debtors and revised the sale of some assets.

He emphasised that the organisation had been receiving strong support from President Bola Tinubu, the Central Bank Governor, the Federal Ministry of Finance, the Attorney General of the Federation, and the National Assembly in their efforts to recover debts transferred by banks to AMCON during the different phases of eligible bank asset acquisition.

The AMCON CEO mentioned that the chairman of the House Committee on Finance had pledged to name and shame obligors, who had yet to repay their debts at a major stakeholders’ conference that would be held before the end of the year.

He revealed plans to organise a conference where senior officials from the Central Bank of Nigeria, relevant ministries, banks, and the judiciary would be invited to discuss the challenges posed by non-performing loans in the country.

He expressed confidence that resolving issues surrounding assets in the oil and gas sector would boost production, generate more foreign exchange, and create employment opportunities for citizens.

He noted that the corporation had achieved remarkable results in two of those assets in less than five months.

In the power sector, he disclosed that AMCON had made significant progress in one of the biggest distribution companies and an abandoned power project in Kaduna.

Alade emphasised the potential impact of addressing power challenges in Nigeria, stating that some banks with approximately 400 branches across the country spend as much as N500bn annually on diesel for their generators.

He believed that tackling the power sector would significantly improve the overall business environment.

According to Alade, AMCON is also working on assets in the telecommunications sector, aiming to revive dormant assets and bring them back into operation.

 

Credit: The Punch

BIG STORY

UBA And Mastercard Introduce Debit Card With Benefits And Discounts To Commemorate UBA’s 75th Anniversary

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Africa’s Global Bank, United Bank for Africa (UBA) Plc, has collaborated with Mastercard to launch a commemorative debit card in celebration of UBA’s 75th anniversary.

This collaboration aims to honor UBA’s long-standing customer relationships and enhance their banking experience with a range of offers and discounts across multiple platforms.

UBA’s Group Managing Director/Chief Executive Officer, Oliver Alawuba, who spoke at the unveiling, highlighted that the card comes loaded with certain benefits aimed at rewarding customers, including limited 25% off purchases on Jumia and USD75 cashback on transactions made through AliExpress.

He added that this initiative symbolizes the shared vision between UBA and Mastercard towards empowering Africans by enhancing customer experience through secure and convenient transactions.

“This new card represents the deepening of our relationship and our shared mission to empower millions of Nigerians and Africans, by providing them with access to secure transactions and new opportunities across the continent,” Alawuba said.

The GMD also disclosed the bank’s plans to unveil similar products across all its subsidiaries. “We are proud of this collaboration, and we are confident that Mastercard’s role in Africa will only grow stronger in the coming years,” he added.

Mark Elliott, Division President for Africa, Mastercard, expressed his appreciation for the UBA collaboration, emphasising its significance in supporting Africa’s digital economy. “We are excited to collaborate with UBA to celebrate this milestone and bring more value to customers across Africa. This commemorative card is more than just a product; it reflects our commitment to advancing financial inclusion and supporting Africans in accessing secure, convenient and impactful financial solutions.”

Elliott highlighted the immense opportunities within the African payment ecosystem and shared that Mastercard is eager to explore new opportunities with UBA. “Together with UBA, we are focused on delivering innovation that meet the evolving needs of the region, empowering individuals, and promoting digital growth across the continent,” he stated.

The launch of the commemorative debit card represents a significant step in UBA and Mastercard’s shared journey towards financial empowerment and innovation across Africa.

 

About United Bank for Africa

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than forty-five million customers, across 1,000 business offices and customer touch points in 20 African countries. With presence in New York, London, Paris and Dubai, UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance and ancillary banking services.

 

About Mastercard

Mastercard powers economies and empowers people in 200+ countries and territories worldwide. Together with our customers, we’re building a sustainable economy where everyone can prosper. We support a wide range of digital payments choices, making transactions secure, simple, smart and accessible. Our technology and innovation, partnerships and networks combine to deliver a unique set of products and services that help people, businesses and governments realize their greatest potential.

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BIG STORY

19 Of 38 Directors Fail Permanent Secretary Examination

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Nineteen Directors have failed the Permanent Secretary written examinations conducted in Abuja on Monday.

They were among the 38 eligible candidates who sat for the three-stage selection process to fill the vacancies for the retiring permanent secretaries from Abia, Bayelsa, Ebonyi, Enugu, Gombe, Kaduna, Kebbi, and Rivers States.

The Head of Information and Public Relations, Office of the Head of Civil Service of the Federation, Mrs. Eno Olotu, said in a statement on Tuesday that the 19 candidates still in the race will on Wednesday proceed to the second stage of the exercise, which will test their competence in the use of “Information Communication and Technology (ICT)” in conducting government business.

The Office of the Head of Service of the Federation usually follows an established tradition of carrying out a rigorous three-stage exercise that ensures that only the very best among the directors on Grade Level 17 are appointed permanent secretaries and equipped with appropriate and relevant skills to improve and sustain effective delivery of services.

The statement further noted that the successful candidates would then proceed to the final stage, where they would be grilled by a carefully constituted panel of top bureaucrats and representatives of the organised private sector, on Friday, November 15.

Olotu extended the goodwill of the Head of the Civil Service of the Federation, Mrs. Esther Didi Walson-Jack, to all the 38 candidates and appreciated the continued support of the Nigerian public in entrenching “meritocracy” in career progression in the Civil Service.

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BIG STORY

Autonomy: FG, Governors, Local Government Chairmen Sign Implementation Agreement

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The Committee on Local Government Autonomy, set up by the Federal Government, has concluded its meetings and signed the technical document, which is expected to be transmitted to President Bola Tinubu soon.

The National President of the National Union of Local Government Employees (NULGE), Hakeem Ambali, made this known in an interview (with The PUNCH) on Tuesday.

In May, the Federal Government, represented by the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, filed a lawsuit to challenge the governors’ authority to receive and withhold federal allocations meant for Local Government Areas (LGAs).

The suit sought to prevent state governors from unilaterally dissolving democratically elected local government councils and establishing caretaker committees.

The AGF argued that the constitution mandated a democratically elected local government system and did not allow alternative governance structures.

On July 11, 2024, the Supreme Court gave a landmark judgment affirming the financial autonomy of the 774 LGs in the country, noting that governors could no longer control funds meant for the councils.

The seven-member Supreme Court panel, led by Justice Garba Lawal, ruled that it was illegal and unconstitutional for governors to manage and withhold LG funds.

The apex court also directed the Accountant-General of the Federation to pay LG allocations directly to their accounts, as it declared the non-remittance of funds by the 36 states unconstitutional.

Also, on August 20, the Federal Government instituted a 10-member inter-ministerial committee to implement the Supreme Court’s ruling on local government autonomy.

The committee members include the Minister of Finance & Coordinating Minister of the Economy, Wale Edun; Attorney-General of the Federation & Minister of Justice, Lateef Fagbemi SAN; Minister of Budget & Economic Planning, Abubakar Bagudu; Accountant-General of the Federation, Oluwatoyin Madein; and the Governor of the Central Bank of Nigeria, Olayemi Cardoso.

Others are the Permanent Secretary, Federal Ministry of Finance, Mrs Lydia Jafiya; the Chairman, Revenue Mobilisation Allocation & Fiscal Commission, Mohammed Shehu; and representatives of state governors and the local governments.

The committee’s primary goal is to ensure that local governments are granted full autonomy, allowing them to function effectively without interference from state governments.

Speaking to our correspondent on Tuesday, Ambali said, “The committee has held its final meeting and we have signed the technical document which will be transmitted to Mr President so by November end. It is expected that states will receive their allocations from FAAC. Also, I can tell you that the President is eager to receive that document. The committee worked within the time frame that was provided.”

Meanwhile, the National Union of Teachers (NUT) has expressed fears about the capacity of LGs to pay the N70,000 new minimum wage to primary school teachers.

The NUT’s apprehension is based on the failure of the councils to implement the former N30,000 minimum wage.

Findings by our correspondent show that some LG workers in Nasarawa, Enugu, Zamfara, Borno, Yobe, and Kogi states, among others, have remained on the N18,000 minimum wage, which was approved in 2011.

However, the inability of the councils to implement the minimum wage has been blamed on the failure of the government to fully implement LG autonomy.

Data obtained from the NUT revealed that teachers in LG primary schools were not paid the former minimum wage.

In Enugu State, for instance, LG workers were exempted from benefiting from the minimum wage, even though state workers enjoyed the salary.

Also, Abia, Adamawa, Bauchi, Nasarawa, Kogi, Sokoto, Taraba, Yobe, Zamfara, Imo, and Gombe States did not implement the old minimum wage for teachers at both state and local levels.

Confirming this, the General Secretary of the National Union of Teachers, Dr. Mike Ene, said, “I can tell you that some states didn’t even implement the N18,000 minimum wage for teachers at the local level. Some governors refused to pay, stating that the teachers are under the employment of the local governments.

“There should be no form of segregation when it comes to the implementation of the minimum wage. We all go to the same market. There is no specific market for local government workers. However, we commend all the governors who have come out to say that the minimum wage will be implemented across the board.

“Also, the NLC has vowed to shake the country by December should state governments fail to implement the minimum wage, so I can tell you that the move by the NLC will force things into play.”

But NULGE president Ambali assured that the minimum wage would be implemented across the board when the LG autonomy commences.

“Over the years, governors have had one excuse, and that is the fact that they always claimed that LGs are autonomous so they can’t negotiate minimum wage on behalf of LG workers. But the truth is that LGs were never autonomous during those periods.

“However, during the negotiation of the new minimum wage, the President brought in representatives of ALGON (Association of Local Governments of Nigeria) to also negotiate, and with the LG autonomy coming into play, that will be settled. The NLC has also given an ultimatum of December for all states as regards the payment of the minimum wage,” he added.

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