Kuku calls for financial partnerships to drive aviation innovation
BY CHUKWUEMEKE IWELUNMO
The Managing Director of the Federal Airports Authority of Nigeria (FAAN), Mrs Olubunmi Kuku has advocated for partnerships to develop more affordable, flexible, and targeted financial solutions. Emphasizing the importance of leveraging existing financing options instead of creating a new aviation finance institution.
Speaking on plans to transform the nation’s airports, the Managing Director of the Federal Airports Authority of Nigeria (FAAN) argued that the aviation sector requires innovative solutions, such as credit guarantees or financial backstops, rather than duplicating structures already offered by commercial banks, private equity firms, and development finance institutions.
Kuku expressed her concerns about the limitations of commercial bank financing, particularly double-digit interest rates that stifle growth opportunities. Instead of creating a new aviation finance institution, she called for partnerships to develop more affordable, flexible, and targeted financial solutions.
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She added that efforts should focus on integrating tailored financial products that address sector-specific risks and challenges. By leveraging existing financial frameworks, the industry can allocate resources more efficiently while avoiding the administrative overhead of establishing and maintaining new institutions.
Furthermore, Kuku negates the need to shutter unviable airports, emphasizing their vital economic and social contributions despite financial challenges.
She argued that these airports, while underperforming, remain critical to local economies and regional connectivity. Using clear and precise language, the FAAN boss stated that infrastructure investments involve sunk costs, making airport closures an inefficient solution.
Instead, she advocated for strategies aimed at maximizing returns on investments while addressing the broader social contributions airports provide.
FAAN, under Kuku’s leadership, has identified four strategic priorities to enhance airport viability: promoting economic activities around airports, expanding cargo operations, fostering tourism, and supporting local business growth.
These focus areas align airport development with broader economic objectives, including job creation and regional trade. Transitioning to specifics, she revealed ongoing collaborations with state governments to expand cargo operations for agro-allied and perishable goods, a move aimed at improving food security and boosting airport-generated revenue.
Cargo operations, according to Kuku, represent a promising growth avenue for underperforming airports.
She elaborated that successful cargo initiatives depend on connecting the agricultural value chain from farms to airports through efficient feeder systems. “For instance, states like Kano and Jos are advancing agro-cargo projects, and FAAN is prioritizing investments in logistics infrastructure, such as packaging systems and testing labs, to streamline export operations. By linking cargo operations to economic growth, FAAN is simultaneously driving revenue generation and addressing food security challenges”
Kuku underscored the significance of aligning airport revitalization efforts with national GDP growth by encouraging activities that promote tourism, business development, and local economic participation.
The focus, she stressed, must remain on optimizing resources, fostering innovation, and maximizing airport potential to transform regional economies. With a clear and structured vision, Kuku’s leadership continues to champion efficient strategies for revitalizing underperforming airports while preserving their economic and social value.
