The federal government is establishing a special purpose vehicle for aircraft leasing that will carry a sovereign guarantee but only a minimal equity stake of between five and ten percent, in a structure designed to make Nigeria’s aviation market more attractive to international lessors and give domestic carriers cheaper and more reliable access to aircraft.

Minister of Aviation and Aerospace Development Festus Keyamo outlined the plan at a high-level meeting with airline operators and aviation stakeholders in Abuja, explaining that the arrangement addressed a problem that had long deterred foreign lessors from doing business in Nigeria. He said that until now, even after the Nigeria Civil Aviation Authority formally deregistered an aircraft, other government agencies such as customs could intervene on legal grounds to prevent repossession. The sovereign guarantee would bind every government agency to cooperate in repossession proceedings and make the government itself financially liable if they failed to do so.

Keyamo said the government would not be providing any direct funding. Its contribution was the guarantee and an enabling institutional role, for which it would earn a return through its small equity stake. The special purpose vehicle was already in the process of incorporation, with completion expected within weeks. Fundraising was underway with reported global investor interest, though no firm date had been given for financial close.

The minister argued that Nigeria’s aviation sector occupied a unique position on the continent. While every other significant African airline was owned or subsidised by a government, Nigeria’s commercial aviation was entirely run by private operators. This meant the federal government had a particular obligation to support the sector rather than leave private Nigerian investors to compete unaided against state-backed carriers from elsewhere on the continent.

George Uriesi, Managing Director and Chief Executive Officer of Ibom Air, speaking on behalf of the Airline Operators of Nigeria, welcomed the initiative, saying airlines had previously been forced to compete with their hands tied behind their backs. He said the leasing vehicle would give operators access to aircraft at significantly reduced interest rates and allow payments to be made in naira rather than foreign currency.