The Nigerian Federal Government has taken a major step towards reducing the cost of airline operations by signing the Cape Town Convention (CTC) Practice Directions. This took place during a Presidential Enabling Business Environment Council (PEBEC) stakeholders’ meeting, led by Vice President Kashim Shettima, at the Presidential Villa in Abuja.
Justice John Tsoho, Chief Judge of the Federal High Court, signed the CTC Practice Directions, officially making the Cape Town Convention operational in Nigeria. This move not only promises to revolutionize the country’s aviation sector but also offers significant opportunities to enhance the ease of doing business, particularly in subnational regions like Edo State.
One of the primary outcomes of the CTC Practice Directions is the reduction in operational costs for airlines, which directly benefits businesses and consumers alike. Lower leasing costs and better financing terms will reduce airline expenses, which in turn will lead to cheaper ticket prices and expanded routes. For Edo State, which is positioning itself as a regional logistics and industrial hub, this will create new economic pathways by increasing connectivity and stimulating sectors like hospitality, retail, and transport. Local businesses will be able to transport goods more efficiently, boosting their market reach and competitiveness.
In addition to lowering costs, the Cape Town Convention also plays a key role in boosting investor confidence. By ensuring that Nigeria complies with international standards for aircraft leasing and financing, the country, including Edo State, becomes a safer environment for both foreign and domestic investments. As Vice President Shettima noted, the pro-business stance of the current administration is designed to preserve and promote the airline industry. This development is especially beneficial for Edo State, which seeks to attract investments in aviation and related industries such as logistics, tourism, and manufacturing. Improved air transport options will allow local businesses to connect more easily with national and international markets.
Another major benefit for Edo State lies in the strengthening of its logistics and transport infrastructure. The reduced costs of aircraft leasing and maintenance will enable airlines to expand their operations, thereby improving air connectivity for Edo. As a result, Edo will be better integrated into national and global supply chains, enhancing its role as a logistics hub. This development will complement the state’s existing investments in road, rail, and port infrastructure, further facilitating the movement of goods and services. For local businesses in sectors such as agriculture and technology, this improved connectivity will mean faster access to markets, helping them stay competitive and grow.
The signing of the CTC also aligns with Edo State’s broader efforts to improve the ease of doing business, particularly through the work of the Edo State Investment Promotion Office (ESIPO) and initiatives like the Doing Business in Edo programme. The convention will enable micro, small, and medium-sized enterprises (MSMEs) in Edo to access affordable air transport, opening up new growth opportunities. For MSMEs that face high transportation costs, the reduced prices for air travel will help them reach wider markets, both domestically and internationally. This is especially relevant for sectors such as agriculture, where timely delivery is crucial for maintaining product quality and market competitiveness.
Furthermore, as the aviation sector becomes more cost-effective, the increased business activity will lead to job creation and higher government revenue. Edo State will benefit from new employment opportunities in areas such as hospitality, retail, and logistics, as demand for these services grows alongside the increase in air traffic. The boost in economic activity will also generate more tax revenue, allowing the state government to reinvest in key sectors such as infrastructure and public services, further improving the business environment.
Finally, the signing of the Cape Town Convention provides much-needed reassurance to international investors as the convention ensures that aircraft can be recovered within a 10-day period in the event of a dispute, offering a level of legal security that is attractive to foreign businesses. This is particularly important for Edo State, which aims to attract foreign direct investment (FDI) in sectors like manufacturing and trade. The assurance that their investments are protected will encourage more international companies to do business in Edo, contributing to the state’s economic growth and development.
In conclusion, the signing of the Cape Town Convention Practice Directions marks a new era for Nigeria’s aviation sector, but its positive effects will extend far beyond the airlines. For states like Edo, the potential benefits include reduced costs, improved investor confidence, better connectivity, and enhanced job creation. As Edo continues its push for business-enabling reforms, this development offers a powerful opportunity to drive economic growth, create jobs, and improve the overall business environment. By leveraging these opportunities, Edo State can solidify its position as a key economic hub in Nigeria.
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Osaze Ighoretin Ogbomo is the Team Lead, Ease of Doing Business Secretariat-ESIPO.
