The Ethiopian Airlines Consortium has reached out to President Bola Tinubu, seeking his intervention in a dispute involving the Minister of Aviation, Festus Keyamo, and the Nigeria Air project.
The letter, titled “Ethiopian Airlines Consortium Plea on the Issue of the National Carrier,” was dated October 15 and delivered to the presidency on October 17.
The letter which was signed by Mr. Michael Adebayo, a representative of the consortium expressed concerns about Keyamo’s recent remarks, particularly his use of the term “fraud” in reference to the project, warning that such statements could jeopardise the decades-long relationship between Ethiopia and Nigeria.
The disagreement centres on what Keyamo referred to as a “Master Agreement” during a recent discussion on the aviation industry. However, the consortium insists that the proper term is “Establishment and Operations Agreement” and provided supporting documents, including copies of the agreement held by the Ministry of Aviation and other government bodies.
Addressing Keyamo’s claims about staffing, tax practices, and operational concerns, the consortium clarified that it is standard practice for strategic investors to provide initial management personnel, stressing that Nigerians had already been shortlisted for key roles.
They also countered the claim that profits would be sent to Ethiopia, citing Nigerian laws that require the majority of profits to remain in the country due to the local ownership structure.
The letter also expressed fears that Keyamo’s negative portrayal could discourage foreign investments, a critical component of Nigeria’s economic reforms. They urged the president to address the situation, noting that continued negative rhetoric could harm the consortium’s reputation and the broader partnership between Nigeria and Ethiopia.
“The negotiation meetings produced a Draft Establishment and Operations Agreement and Full Business Case. We therefore do not understand why responding to a published bid has brought us so much humiliation. If this is allowed to continue, it may affect the ability of your Government to attract further Foreign Direct Investment which is critical to the success of your reforms,” it read.
The letter also cited the thorough process behind the establishment of Nigeria Air, explaining that the consortium followed the government’s guidelines and was selected as the preferred bidder after a rigorous evaluation. The group reiterated its willingness to support any changes in the government’s approach but called on Tinubu to stop the further public undermining of its efforts.
“Your Excellency, we plead that you kindly direct Mr. Festus Keyamo to stop further damage to our Consortium’s reputation and the relationship between Nigeria and Ethiopia,” the memo added.
SEE FULL LETTER BELOW:
“We would like to specifically mention that the Minister’s statement on all management staffing being Ethiopians, tax avoidance, profits being taken to Ethiopia and wet leases for aircraft are not true.
“Normal practice is for a strategic investor to provide the management staff of the company it runs during an initial period to stabilise the company; to nominate such staff does not mean the staff will be Ethiopians, some Nigerians had already been shortlisted for the management positions.
“It is also normal practice for staff on secondment to be under a management contract and to avoid paying tax in two countries, they pay only tax in their permanent abode. However, the negotiation team informed the consortium that Personal Income Tax was levied by the State Government and the Federal Government did not have such powers to waive it. As such, no tax waiver existed in the Agreement or Full Business Case.
“In a company with 51% owned by Nigerians, 51% of the profits will reside in Nigeria and like in other businesses complying with Nigerian Law foreign companies who show evidence of investment are allowed to repatriate their share of the profits.
“Also, Nigeria has many pilots flying worldwide including Ethiopian Airlines; we never considered using wet leases or foreign pilots in Nigeria. The aircraft were to be Nigerian registered aircraft on commencement. We had even been allocated Nigerian registration numbers for the initial aircraft by the Nigerian Civil Aviation Authority.
“Your Excellency Sir, following the approval of the Outline Business Case (OBC) by the Federal Executive Council in 2021, the OBC determined the structure of the National Carrier, not our consortium and it was the Nigerian Government that recommended a 51% Nigerian investor participation and a 49% Strategic partner participation.
“The OBC recommended that the Strategic Partner be an International Airline This structure was determined by the Federal Executive Council in which Mr. Festus Keyamo was a member.
“The Federal Ministry of Aviation published adverts in the Economist Magazine and several Nigerian Newspapers in 2022, our Consortium submitted a bid in compliance with the advert and the subsequently issued request for proposal.
“Following the submission, the Government evaluated our bid and subsequently declared us preferred bidder. We thereafter commenced very rigorous negotiation meetings with the Ministry of Aviation, Infrastructure Concession and Regulatory Commission (ICRC), Ministry of Finance and Ministry of Justice.
“The negotiation meetings produced a Draft Establishment and Operations Agreement and Full Business Case. We therefore do not understand why responding to a published bid has brought us so much humiliation. If this is allowed to continue, it may affect the ability of your Government to attract further Foreign Direct Investment which is critical to the success of your reforms.
“We reiterate that we do not have any issue with the Government having a change of approach on the issue of a national carrier. What worries us is the Minister’s continuous denigration of our consortium and his constant intention to misinform the public. Our consortium has a combined history of over 100 years in operation and has never been so maligned.
“Your Excellency, we plead that you kindly direct Mr. Festus Keyamo to stop further damage to our Consortium’s reputation and the relationship between Nigeria and Ethiopia,” the memo added.(Guardian)
