The Minister of Aviation and Aerospace Development, Festus Keyamo, has said Nigeria’s former petrol subsidy regime deprived the country of funds needed to develop and maintain critical aviation infrastructure.
Gatekeepers News reports that Keyamo made the disclosure on Monday at an event marking the 67th anniversary of Aero Contractors.
The minister said the Murtala Muhammed International Airport (MMIA), Lagos, had remained largely underdeveloped for decades despite serving as Nigeria’s major international gateway.
He noted that the airport was built in 1977 and questioned why successive administrations had failed to undertake major reconstruction and development of airports across the country.
According to him, the major obstacle was a lack of funds for infrastructure development.
Keyamo said four major airport terminals in Lagos, Abuja, Kano and Port Harcourt were eventually built with loans obtained from China, while the terminal in Enugu was funded through budgetary allocations.
“We could not raise money to do anything in the last 50 years, because there was no money. The thing we managed to do was that we borrowed money from the Chinese, and we are paying back that money,” he said.
Explaining the reason for the funding shortage, the minister said a large portion of the country’s oil revenue had been used to subsidise petrol, while the naira was also being artificially supported.
“Why was there no money? The simple thing is that all the monies we were earning in this country from oil was going to subsidies. When we make money, all the monies went to subsidising PMS. And not only PMS, we were also suppressing the naira.”
Keyamo described the former petrol and foreign exchange subsidy arrangements as “the real audio money,” arguing that Nigerians were accessing petrol and foreign exchange at prices that did not reflect their actual costs.
He said the system had negatively affected the aviation sector by limiting the government’s ability to finance major infrastructure projects.
Subsidy removal boosts liquidity, investment
However, Keyamo said the removal of petrol and foreign exchange subsidies under President Bola Tinubu had improved Nigeria’s liquidity and created greater capacity for investment in infrastructure.
He said the government was able to raise $500 million to rebuild infrastructure in Lagos without borrowing, less than two years after the reforms were introduced.
“In less than two years, after we removed subsidies from both money and fuel, the president could raise $500 million to rebuild Lagos. Not money borrowed,” he said.
The minister added that the country’s liquidity had increased, while foreign reserves had risen from $3 billion to $56 billion.
“Our liquidity rose. Our foreign reserves also rose from $3 billion to $56 billion now. Investors are rushing to the country because they now see the country as viable.”
Keyamo said the government had also approved additional airport infrastructure projects, including runway resurfacing in Kano, Port Harcourt and Akure.
“We didn’t borrow money. That is how the Renewed Hope agenda is affecting the aviation sector positively,” he said.
The minister maintained that the government’s economic reforms were not “whimsical policies”, but measures that successive administrations had attempted to implement.
He also highlighted measures introduced to strengthen local airlines, including improved access to aircraft leasing and Nigeria’s compliance with the Cape Town Convention.
According to him, the policies have contributed to the emergence of new airlines backed by sub-national governments, while enabling existing domestic carriers to expand into regional and international markets.
Keyamo further pledged the Federal Government’s support for Aero Contractors as the airline seeks to expand its fleet and operations.
He said he hoped to see the airline operate international routes to destinations such as New York, London and Canada.
