Experts Divided Over Proposed Aviation Development Bank

​LAGOS — A sharp division has emerged among key aviation stakeholders regarding the proposed establishment of a dedicated Aviation Development Bank, with industry leaders split on whether a specialised financial institution will resolve the sector’s chronic capital constraints or merely duplicate layers of unviable lending.

​The debate highlights ongoing anxieties over long-term funding for Nigerian carriers, which have long struggled with high operational costs, dollar-denominated obligations, and limited access to single-digit credit lines from traditional commercial banks.

​Proponents of the specialised bank argue that conventional financial institutions are ill-equipped to handle the capital-intensive, long-term nature of aviation assets. Samuel Caulcrick, Chief Executive Officer of Merchant Express Cargo Airlines, dismissed arguments that dismissing the bank because it has never existed overlooks the core value of sector innovation.

​“Traditional banks were never built for aviation, and aviation can never scale on traditional banking,” Caulcrick stated, pointing to international frameworks like the African Development Bank’s $7bn Integrated Aviation Transformation Programme as proof that dedicated institutional funding models are viable mechanisms for fleet renewal and infrastructure.

​Conversely, skeptics caution against viewing a new bank as a universal cure for structural ailments. Alex Nwuba, CEO of Palewater Advisory Group Africa, argued that any new institution would still face high costs of capital sourcing.

​“Such an institution does not manufacture money. It must source lendable funds and price them above what it paid,” Nwuba noted. He warned that on-lending at market rates would offer little relief, while below-market lending would merely amount to state subsidies that require transparent public debate. He also emphasized the necessity of addressing industry-wide data discrepancies and performance benchmarks before rolling out fresh financing architectures.

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​Echoing these reservations, John Ojikutu, CEO of Centurion Aviation Security Services Ltd, opposed the creation of a new bank outright, urging policymakers to audit previous government aviation intervention funds. Ojikutu cautioned that without resolving the foundational weaknesses that crippled past interventions, a new bank risks generating another wave of unrecovered public loans.

​Instead of establishing a specialized financial institution, Ojikutu recommended enforcing strict economic and financial regulations, improving airport infrastructure, establishing credible airline business plans, and implementing optimized route and fleet frameworks.