CHUKWU DAVID reports on efforts by the Senate to protect indigenous firms from collapse amidst stiff competition with rival foreign enterprises
The Ninth Senate has in its one month of existence demonstrated concerns over what it perceives as unfavourable operational environments confronting some of the nation’s indigenous industries, by coming up with strategies through motion to protect such establishments from being pushed out of business by rival foreign firms.
The Ninth National Assembly was inaugurated on June 11, after which the lawmakers embarked on three weeks break to allow the National Assembly management in conjunction with the Senate ad hoc Committee on Welfare, allocate seats and offices to the members.
One of such moves by the apex legislative chamber was its far reaching resolutions last week on how to rescue and protect the indigenous airlines from threat of extinction posed to them by the dominance of foreign airlines operating in the country.
The Senate took the decision following a motion sponsored by Senator Ifeanyi Ubah (YPP-Anambra South) and entitled “Unfair Competition-Urgent Need to protect Nigeria’s Indigenous Airlines from Extinction due to Multiple Designation and Multiple Frequencies granted Foreign Airlines in Nigeria.”
Consequently the Upper Chamber summoned the Permanent Secretary, Ministry of Transport, Director General of Nigerian Civil Aviation Authority (NCAA) and the Managing Director of Federal Aviation Authority of Nigeria (FAAN), to come and explain why foreign airlines were allowed to fly multiple routes within Nigeria to mop up passengers in a manner that was not allowed in other countries of the world.
It also directed the foreign airlines operating in the country to provide statistics of Nigerians in their employment, with a view to encourage them to employ more Nigerians and partner with indigenous airlines in the country.
The Red Chamber further urged the Federal Government to give indigenous airlines necessary support and protection to keep them afloat, while inviting indigenous airlines operators to explain to the Senate the challenges they are facing in the aviation industry as well as the way forward.
They equally resolved to invite indigenous airlines operators to explain to the Senate the challenges they are facing in the Nigerian aviation industry as well as to proffer solutions towards their survival and boom.
Presenting his motion, which was co-sponsored by 18 other senators and attracted massive support of lawmakers present at last Wednesday’s plenary, Ubah asked the Senate to direct all foreign airlines operating in Nigeria to provide statistics of Nigerians in their employment as well as encourage them to employ more Nigerians and partner with indigenous airlines.
He noted that it is only in Nigeria that such practices happen as other countries have laws that protect their domestic sirlines from hostile competition of foreign investors in the country.
Ubah revealed that foreign airlines were designated to multiple routes within Nigeria, noting that Ethiopian Airline operates into five airports – Enugu, Kano, Kaduna, Abuja and Lagos, while Turkish Airlines operates into four airports Abuja, Lagos and Port-Harcourt. Emirates Airline, he further stated, operates two frequencies daily into Lagos and one into Abuja.
Most senators, who contributed to the debate, supported the motion, while urging the Federal Government to intervene and save indigenous airline operators from going into extinction.
Furthermore, while briefing journalists after plenary on the import of his motion, Ubah said as a representative of the people, he had to protect the interest of Nigerians in the aviation business, pointing out that he was not bothered about peoples’ opinions and insinuation towards his motion.
Some of his colleagues had mumured at the background and insinuating that his motion might have been propelled by his vested interest in the sector.
While some insinuated that Ubah might be a stakeholder in the sector, others said that he might be aiming to float an airline or protect his kinsmen in the business.
But, the President of the Senate, Ahmad Lawan, while congratulating Senator Ubah for his patriotic stance and promotion of indigenous industry and airline operations, ruled among other prayers that indigenous airline operators be invited to meet with the Senate ad hoc committee at a later date to be agreed by the Senate.
Another time when the Senate sought to protect indigenous investors was two weeks ago, when the Upper Chamber urged the Federal Government to revert to 35 per cent import duty on the importation of soap noodles to save the industry in particular and Nigeria’s economy in general from total collapse.
The resolution by the chamber was sequel to a motion on “Urgent need to review import duty of soap noodles,” sponsored by Senator Barau Jibrin (APC, Kano North) and co-sponsored by four other senators.
While leading debate on the motion, Jibrin noted that the Federal Government, in order to boost local production of soap noodles increased its import duty to 35 per cent from 10 per cent, saying that the increase on the import duty made it unprofitable for manufacturers of soaps to import soap noodles from abroad.
He said that the situation had compelled the manufacturers to resort to making huge investment in setting up manufacturing lines to produce soap noodles in Nigeria to the tune of about N420 billion, while creating over 250,000 jobs in the country.
The lawmaker further pointed out that the Federal Government later decided to make a downward review of the import duty from 35 per cent to 10 per cent, a development he lamented would have negative impact on the local manufacturers.
He, therefore, warned that this downward review would lead to massive importation of soap noodles into the country, thereby having negative impact on the nation’s economy. He also warned that the review would lead to the reduction in government’s revenue drive, collapse of the soap noodles industry and its attendant unemployment as well as serve as impediment to government efforts towards developing local sourcing and self-sufficiency.
Jibrin also stated that it would act as discouraging signals to investors; and putting pressure on the forex reserve and consequently the stability of the Naira.
He said: “the negative impacts of the policy on our economy that has just emerged from recession and the expected huge job losses if this policy is sustained will further destroy, degrade and imperil the chances of our economy for sustainable stability.”
All senators, who contributed to the debate, agreed that the downward review of import duty on the soap noodles was counter-productive to the nation’s economy and sought a comprehensive review on import duties on all goods that could be manufactured in the country.