Nigeria’s exports struggle amid surging global cargo demand

While there is a global increase in air cargo demand, Nigeria is struggling with an imbalance between imports and exports. This is exacerbated by inadequate airport facilities, a lack of aircraft, and a declining aviation infrastructure, writes Princess Etuk

The demand for air cargo services has grown significantly over the past decades, as reflected in the rising volume of air cargo traffic between countries.

Globally, air cargo traffic increased from 38 million tonnes in 2005 to 57.6 million tonnes in 2019.

In terms of distance, air cargo traffic expanded from 142,580 million tonne-kilometers in 2005 to 225,001 million tonne-kilometers in 2019.

This surge in air cargo volume was driven by factors, such as economic growth, political stability, liberalisation policies, improvements in customs quality, and reduced corruption.

However, in May 2024, African airlines saw 18.4 per cent year-on-year demand growth for air cargo, the strongest of all regions. Demand on the Africa–Asia market increased by 40.6 per cent compared to May 2023, the strongest performance of all trade lanes. The capacity in May increased by 21.4 per cent year-on-year.

While a report estimated that the Nigerian Air Freight Market would reach $3.01bn in 2024 and is expected to reach $5.64bn by 2029, industry experts have expressed concerns over the air cargo situation in Nigeria, noting the need for better airport facilities and increased production to improve exports.

They stated that the country’s cargo export growth had been weakened by a lack of available aircraft.

An aviation expert and Chief Executive Officer of Centurion Security Limited, John Ojikutu, pointed out the stark differences between Nigeria and other countries in terms of passenger traffic.

“When you look at other countries, even the passengers, we are talking about what our passenger traffic is compared to other countries, we are number eight.

“If there is any increase, the increase is in South Africa. They are well ahead of us in passenger traffic. The industry is collapsing, we just have to know that,” he stated.

According to Ojikutu, the decline in passenger traffic has been a long-standing issue.

“In 2019, I told them to convert all their aircraft to carrying cargo because the passengers would drop. Look at the passenger figure in 2019 and compare it to what we have now.

“The situation is further compounded by a lack of available aircraft. The minister said there are no aircraft. If there is no aircraft, how do you carry cargo and passengers?” he remarked.

The lack of aircraft, he said, had also affected Nigeria’s export capabilities.

“We are not thinking; everybody is looking for how to steal money. We had about 30 to 40 foreign airlines coming to this country, how many are coming now? What are we exporting?” he asked.

The Nigerian air cargo sector is currently underperforming, according to Ojikutu, who raised concerns about the limited scale of air cargo operations within the country.

“Nigerian air cargo is by far too small. The total cargo you will find moving around in this country is between 80-100 million tonnes,” he stated.

The aviation expert highlighted the inefficiency of the current air cargo system, which, he said, failed to meet the nation’s potential and needs.

Ojikutu suggested a strategic focus on domestic agricultural products as a starting point for revitalising the sector, saying, “The only way we can talk of cargo now is to let them start with lifting food crops locally. Let them target about one million food and cash crops and bring them down.”

To support this initiative, he called for government subsidies to make air freight more viable, particularly for transporting essential goods like food.  He urged the government to subsidise air freight because food is national security.

The Assistant General Secretary of the Aviation Round Table, Olumide Ohunayo, maintained that due to the increase in flight tickets and inflationary trends, most people have decided to fly to different countries.

He added that they ordered goods online and that had increased the cargo freight into Nigeria.

“But unfortunately, we have not been able to match that with exports. We have more imports with cargoes coming in than going out. Most of the aircraft go back empty,” Ohunayo lamented.

He also pointed out the need for improvements in airport facilities to support cargo transportation.

According to Ohunayo, cargo within Nigeria is available, and the market is there, but the aircraft is not available and the facilities at the airport are not encouraging cargo by air.

“There is a need to increase production. Companies are folding up. We must find a way to start producing so that we can start producing to join the export market. We are really poor in the export market,” he stressed.

The Coordinator of the Federal Airports Authority of Nigeria AviaCargo Roadmap Committee, Ikechi Uko, stated that Nigeria lost $1bn annually due to the lack of certification for agricultural exports, despite being one of the world’s top agricultural producers.

He observed that while considerable attention had been given to passenger traffic, aircraft movement, and flight operations—mainly focusing on safety, security, and policy—air cargo flow had been largely overlooked.

https://punchng.com/nigerias-exports-struggle-amid-surging-global-cargo-demand/