IBOM AIR: A CUE INTO A SUSTAINABLE MANAGEMENT STRATEGY

IBOM AIR: A CUE INTO A SUSTAINABLE MANAGEMENT STRATEGY

By Steven Atogi

21 February, 2019.

Congratulations to the people and government of Akwa Ibom State, led by HE, Governor Udom Emmanuel, on successfully launching the Ibom Air. The Ibom Air initiative, as envisioned by the Akwa Ibom State government is a brilliant one. It is a great developmental project, if it effectively managed, it would prosper the people and State in no mean measure. Governor Udom Emmanuel of Akwa Ibom State took delivery of two aircraft for operations at the state-owned airline, Ibom Air, on Wednesday, 20th February 2019. It was officially unveiled by Nigeria's Senate President, Dr. Bukola Saraki, at the Victor Attah International Airport, Uyo. According to the News Agency of Nigeria (NAN), “the first Ibom Air aircraft touched the tarmac by 1:40pm while the second touched by 1:49pm.”

The State-owned airline “Ibom Air” is a historic feat, being the first State-owned airline in Nigeria. Governor Udom Emmanuel at the unveiling of Ibom Air, revealed that, when fully operational, it will employ 300 staff directly, and 3,000, indirectly. Ibom Air, being a large scale enterprise, no doubt, will create huge employment opportunities for people. The Ibom Air project guaranteeing excellent air-travel opportunity, will boost investor-confidence in the State. Human capital development is another merit of the project; the training of operational/technical staff, and employment of competent hands, will increase human capital development in the State. Apart from anticipated Return on Investment (ROI), Akwa Ibom State stand to benefit from increase in Internally Generated Revenue (IGR), as a result of spill-over economic activities. In this light, Ibom Air, when fully operational, will attract more businesses in sectors like land transportation (uber, taxify etc.), hospitality (hotels, restaurants, spar etc.), Courier Services (cargo and parcel delivery) amongst others. In addition to informal sector micro-scale businesses that will be littered around Victor Attah International Airport axis and Uyo metropolis.

While many are basking in euphoria on the Ibom Air unveiling, it is yet unclear, what plans the Akwa Ibom State government have in place, for effective management and sustainability of the airline, on the long run. What is the management strategy to ensure sustainability of Ibom Air? Who consist the management board? It is going to be managed by civil servants or private contractor? If the plan swings to the former, I'd strongly advise against it. Although, the Akwa Ibom government has not revealed plans for Ibom Air management and its sustainability strategy, it is advisable not to take the seemingly easy route of ceding to the State civil service for management, if truly, the project is not to tow the path of like other white elephant project taken by a State governments in the past. To elucidate, a cursory look at the conditions of other State-owned large-scale establishments would suffice. Take tertiary education for instance; how is the State-owned University, Polytechnic and Colleges of Education? What is the productive output in that sector in terms of quality education and patent registration? Will Ibom Air be stunted in the way of most State-owned establishments? Though, the problem, not peculiar to Akwa Ibom, has a national spread– State-owned enterprises are poorly run, and barely productive, with a cumulative high cost of management overburdening recurrent expenditure.

The big question remains; is Ibom Air a white elephant project? It will certainly be meritorious to Akwa Ibom State and its people if it succeeds. However, a lot of factors will stymie its progress, if the management is consisted of civil servants only, simply because there is an entrenched malady in Nigeria's civil service. It is a national plague which permeates all the federating States. If the management is ceded to the civil service, factors that will be reoccurring decimal will encompass; poor/laissez-faire work ethic, mismamagement, misappropriation of funds, incompetence of board members, non-remittance of funds, impunity, prebendalism (mediocres get employment via connection against meritocracy), and many more. It is common knowledge that politicians would perceive the project as one of the numerous political settlement agencies, for pacification of Party members, winning contracts through the backdoor and executing it poorly after payment. One formidable obstacle to Ibom Air would be policy somersault, which is a grave problem and swift killer of SMEs and large scale enterprises (private and public-owned) in Nigeria. 

Ibom Air is a large scale start-up. And start-ups in Nigeria have a three-year lifespan. If a start-up survives the first three years of operation, recording good business growth and anticipated returns in line with the business plan, it will likely succeed on the long run. Given Nigeria's four-year electoral cycle, there is a sustained political culture of policy somersault, as power changes hand in government houses across the country. Each new leader in government (whether succeeds another in same Party or an opposition that comes into power) may likely introduce policies far different from what was, discarding whatever economically viable policy of his/her predecessor. This political culture is a great impediment to business growth in various States across Nigeria. Irrespective of how adverse policy somersault is–leading to abandoned projects and stifling already growing businesses–politicians are unperturbed as their motive, primarily, is self-interest, to perpetuate their reign in power, thereby taking up new projects (markers), different from their predecessor(s). Given this political and economic reality, it is too early to merry on the mere unveiling of Ibom Air. 

For Ibom Air to succeed, there must be a viable and pragmatic long term strategy and a competent management. As Ibom Air seeks to conform with global best practices in the aviation industry, being nascent (start-up), it is best to be managed by an experienced and competent private firm. The Akwa Ibom government should, preferably, contract the management of Ibom Air to a credible private firm, after bidding. Manangement should be transferred to the firm on a manage, maintain and transfer basis, within a ten-year period (renewable). The agreement should cover insurance of the airline within the timeframe, possible expansion, and agreed percent of remittance to the government, preferably bi-annually. This way, government will play a supervisory role in the operations of the airline. By being managed by a private firm, the State government will not budget for the airline annually. Private management of the airline will save government the burden of huge cost of recurrent expenditure. The firm should be empowered by agreement to wield 70% power in the affairs of the airline, while government 30%. The power to fire and hire should rest solely on the management. This will eliminate mediocrity in terms of employment and ensure quality staff based on merit, and consequently, enhance productivity.

During the unveiling of the airline, the Chairman, Ibom Air, Idongesit Nkanga, hinted that the airline will go international before the end of Governor Udom Emmanuel's second term–here, before 2023, is an indicator of the government's short-term plan for the airline. But, it begs the question; is Ibom Air going international before 2023, predicated on Governor Emmanuel successfully securing a second term? It will be quite unfortunate, if the Ibom Air vision is limited to just the next electoral cycle. What the concern should be, is on ensuring the sustainability of Ibom Air, irrespective of who occupies Hilltop Mansion, in the aftermath of the 2019 gubernatorial election. If indeed, the vision of a State-owned airline business, was birthed during the administration of Obong Victor Attah (1999-2007), it goes further to show the resolve towards the establishment of Ibom Air. It wouldn't be out of place, if efforts are consolidated, for the Ibom Air vision to be fully sustained on a long-term, to the benefit of the State. Also, it reveals that, the State government can avert policy somersault in the aviation industry and sustain Ibom Air on a long-term. The runners of Ibom Air vision should be thinking in the line of long-term goals such as; Flight Academy, plant; for production of spare parts (for export), assemblage and servicing.

Conclusively, Ibom Air, if managed effectively would be a viable alternative source for generating internal revenue–diversification–in a non-oil sector. There is a good prospect of generating enormous internally generated revenue (IGR) from the numerous spill-over economic activities in different sectors (formal and informal) within Akwa Ibom. When efficiently managed, Akwa Ibom would blaze the trail for many other States in Nigeria and Sub-Saharan Africa. This will especially spur oil-producing States in Nigeria to diversify into non-oil sectors of the economy with great prospects of wealth creation and employment. 

Unemployment statistics by the Nigerian Bureau of Statistcs (NBS) for the Q3 of 2017 revealed a brutal reality for oil-producing States, indicating Rivers at 41.82%; Akwa Ibom 36.58% and Bayelsa 30.36%. The data further showed that youth demographic (15-35) unemployment had a higher margin within these oil-rich States. 

This is the more reason why Ibom Air with all its prospects for employment, wealth creation and development is a welcomed initiative that should be sustained on a long-term basis.

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