How naira depreciation threatens equipment acquisition – NAHCO

The Nigeria Aviation Handling Company (NAHCO) PLC has decried the fluctuation in foreign exchange which has more than doubled the rate for the acquisition of ground support equipment (GSE) in just one year.

Daily Trust reports that foreign exchange rate was around N459 – N470 to a dollar in January 2023 but jumped to over N1,000 to a dollar at the beginning of the year.

Like every other firm with foreign exchange component, the forex spike has pushed up the cost of GSE acquisition with the operators requiring more naira to buy the corresponding dollars.

The Group Managing Director of NAHCO, Indranil Gupta, stated that in addition to the devaluation, the dollar is also not readily available to purchase at the official rate.

Addressing newsmen at its headquarters at the Murtala Muhammed International Airport (MMIA), Lagos, the NAHCO GMD also disclosed that it had invested over N1bn in its export processing centre at the airport to boost export business in Nigeria.

He was flanked at the briefing by the Group Executive Director, Commercial & Business Development, Prince Saheed Lasisi and Chief Financial Officer, Adeboye Emiloju.

Despite the forex setback, he disclosed that the company has an elaborate plan for complete re-fleeting which would change all its equipment in Lagos and Abuja within the next two years.

“Our GSE acquisition was slowed down because of the global supply chain disruption. OEMs (Original Equipment Manufacturers) are finding it difficult to ramp up manufacturing to meet the demand post-COVID. After the COVID-19 lockdown, demand jumped and they are struggling to meet those demands,” he said.

On the export processing centre, he stated that this aligns with NAHCO’s focus on exports to boost the nation’s revenue. The plan involves interfacing with farmers to educate and train them on the international standards for packaging in order to reduce rejection of Nigerian goods.

“The idea is that Nigerian products will be in one shop where they will be well sorted, arranged and packaged before being transported. We plan to put forward some ideas on improving exportation before the Aviacargo committee.

“I know that Nigeria can be the food basket of the continent if the producers and farmers are exposed to the potential of the continent. It is much more profitable to export than to import because it comes with foreign exchange”, he said.

The processing centre, he added, would be replicated at other international airports in Kano, Enugu, Port Harcourt and Abuja.

Addressing issues around its clientele, he dismissed reports that the company is losing its clients, saying that was far from the truth.

Prince Lasisi on his part stated that the export processing centre would serve as the links between individual farmers and exporters.

“We are even reaching out to individual farms. We are facilitating the achievement of certifications required in the international market and we even got some embargoed products in Nigeria lifted in the international market,” he added.

Meanwhile, the firm has signed a series of contracts to provide services to eight international and domestic operators.

In a statement, the company disclosed that NAHCO will handle long-term client and partner, Egypt Air, from January 1, 2024, to December 31, 2028. Egypt Air has joined the list of NAHCO’s clients with five-year contracts, in addition to Qatar Airways, Turkish Airlines and Ethiopian Airlines who   recently increased NAHCO’s share of its warehousing wallet.

The contract with Egypt Air rounded off the list of contracts entered into with a number of airlines including Nigeria’s largest carrier, Air Peace for domestic, regional and international operations; Rwanda Air (including at Kano); ASKY; Air Maroc, DHL Aviation, Dana Air and Astra Aviation. The contracts, excluding Egypt Air’s, are for three years each.