FG Insists on Establishing National Carrier Despite Fiscal Strain

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The federal government has disclosed plan to go ahead with the setting of proposed national carrier for the aviation industry despite the macroeconomic challenges facing the country.

In fact, the government, through its Economic Sustainability Committee (ESC), said it would fast-track the establishment of the national carrier.

The government disclosed this in its Nigeria Economic Sustainability Plan that was submitted to President Muhammadu Buhari recently, by the Vice President Yemi Osinbajo-led ESC.
In the 76-page report, the committee noted that the aviation industry has been hard hit by the pandemic as over 90 per cent of its activities and operations have been adversely affected.

This, it stated had resulted in losses that are valued at N21 billion on a monthly basis. The ESC therefore emphasised the need to ensure the recovery of the sector by providing financial support where necessary to ensure that the sector not just survives, but also sustains air connectivity to keep passenger traffic as well as supply lines for essential and cargo flights open. “It is also proposed to fast track the establishment of a private sector driven national carrier to generate revenue and contribute to GDP, while creating activity in the wider economy for suppliers, importers, exporters and manufacturers,” the committee added.

It stressed that its objective for intervening in the sector would be to save existing aviation industry organisations and jobs, through a targeted stimulus package; extend grant support including payroll support to the aviation industry including airlines, handlers, caterers and related services, the provision of single digit soft loans, with long term repayment plan; defer payment of taxes and filing dates and ensure the removal of Value Added Tax from airline tickets as approved by the Federal Executive Council, among others.

Others are the provision of airport rent fees to airport operators for the duration of the lockdown plus one month.
The estimated cost for its intervention in the sector was put at N27 billion and a timeline of 12 months stated
Also, the government disclosed that its immediate focus in the education sector would be to address the disruptions caused by the pandemic and ensuing social distancing measures at all levels of education.

It explained that practical steps would be taken to minimise disruption to learning, utilising technology as appropriate.
Specifically, virtual learning would be implemented (either online or through broadcast), virtual convocation ceremonies or issuance of certificates (with postponed ceremonies) should be implemented to continue educational progression, it added.

“Going forward, steps will also be taken to address three key issues in the educational sector – The incidence of Out of School Children(OOSC), the national shortage of basic education teachers and the urgent need to develop proficiency in STEM/TVET and digital literacy on a national level.
“The project will be delivered over 36 months to accommodate the longer lead times in the education sector while addressing the incidence of OOSC.

“It is expected that with the structures that are established by this project, a major post-project benefit will be the eradication of the incidence of OOSC within five years. The project will generate accurate and verifiable education data necessary for planning and decision-making and will involve extensive stakeholder engagement at state and local government levels as well as private sector engagement to understand needs as well as sensitise local populations on skills development and entrepreneurship.

“The project will create employment opportunities for qualified graduates and will develop the required proficiency of the teaching professionals in those critical subjects that underpin productivity, efficiency and innovation in a modern economy,” it explained.
In essence, the policy makers stressed the need for the country to prevent or limit recession, and avert the accompanying prospects of business failures, job losses, and increased poverty.

It pointed out that the generally accepted approach was to deploy a stimulus package, an increase in government spending, tax discounts, loan re-payment deferments or re-structuring, all with a view to increasing aggregate demand by beefing up investments and consumer spending.

“The question then is not whether or not we should stimulate the economy but what size of stimulus package is capable of preventing a disastrous recession.
“It is clear that we must now take urgent steps to forestall a severe economic downturn and the largest unemployment situation yet in our history,” it added.

It noted that over the next 12 months, the federal government would work in close collaboration with state governments and the private sector to stimulate the economy by preventing business collapse and ensuring liquidity; retaining and creating jobs using labour intensive methods in key areas like agriculture, housing, digital business services and direct labour interventions.

The committee also pledged to undertake growth enhancing and job creating infrastructural investments in roads, bridges, renewable energy, and communication technologies; and extend the protection of vulnerable groups – including women and persons living with disabilities – through pro-poor spending.

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