Agboarumi: Standardisation Key to Boosting Nigeria’s Exports

The Managing Director of Skyway Aviation Company Plc, Mr. Basil Agboarumi, in this interview with Chinedu Eze said there is progressive increase of exports from Nigeria, especially non-oil exports. However, bureaucratic bottlenecks associated with government inspection agencies often result in delays in the export of goods. Excerpts:

Handling companies have been complaining recently that their services are under-priced and they want the cost of their services to reflect what is obtainable in other countries, especially in Africa, given the same circumstances. Can you throw more light on this?

Over the years, there have been some problems. As at yesterday (Wednesday, July 28) when we were at the League of Airports and Aviation Correspondents (LAAC) seminar, I think the chairman of AGHAN (Association of Ground Handling Companies of Nigeria) was trying to throw more light on the situation of ground handlers in Nigeria, the metamorphosis of the ground handling companies in Nigeria, and how they came to be in the first place.

Fortunately, SAHCOL (Skyline Aviation Handling Company Limited) happens to be older than the competitor and SAHCOL was the ground handling services aspect of Nigerian Airways. It was set up to service Nigeria Airways as at that time. Then at a point in time, well for whatever reasons, Nigerian Airways started having problems. Of course, you understand that it will also begin to affect everything that was connected to Nigeria Airways. That was what prompted the foreign airlines then to float another ground handling company.

If you look at that AGHAN report, they listed the five foreign airlines. They came up and set up another ground handling company, the Nigerian Aviation Handling Company Limited (NAHCO), in conjunction with the Federal Airports Authority of Nigeria. It was called Nigeria Airport Authority (NAA) then.

So, it was formed with the foreign airlines with various percentages of ownership. The major reason why they established another company was because SAHCOL then had a mandate to efficiently provide services to the Nigeria Airways. So the foreign airlines needed a handling company that will meet their professional needs in ground handling service provision. As shareholders, they can insist on certain specifications of service, as long as professionalism was concerned.

Of course, as at that time whether you make profit or you don’t make profit, nobody bothered, as long as you were meeting that need of movement of cargo with people from one point to the other. But the newly established company became profit-driven; so it has to be run to provide service and make profits. But that was not the motive when Nigeria Airways established SAHCOL. They were more interested in the service.

At a point, things began to happen, which gave rise to changes. NAHCO was the first to become privatised by going to the Nigerian Stock Exchange and now they have shareholders. All the foreign airlines that were shareholders there then had left. None of them has shares in the company. And for us, we came out after Nigeria Airways was liquidated; we had to survive.

At a point, the government was holding 100 percent ownership of the then SAHCOL. So when we found ourselves in that situation, we had to run out in search of money and that brought us to the point where we began to sincerely speak to ourselves about the realities of the issues on ground. We realised that for us to succeed we have to operate profitably. That brought us to the situation where we have to review what we were paid for for our services.

Everyone knows that aviation is the same everywhere. I say to you that aviation follows the same standards and international best practices. We get the same equipment from the same market, even SAHCO Plc and NAHCO Plc are all ISAGO (IATA Safety Audit of Ground Operations) certified ground handling companies. We know what we went through to get the certification. I know the training that we put into this place, because there is nobody that will operate ground handling services that will not be certified. So, the staff are subjected to the same training, examination and certification.

The Nigerian Civil Aviation Authority (NCAA) carries out audit in this place every time. The airlines also will audit us to ensure that we have what it takes to manage ground handling services. We attend foreign conferences with other ground handling companies in the world and we know what is obtainable in other places. I am seated here today as the Managing Director of SAHCO, I understand the challenges of the things that needed to be done. It is just simple logic that you have to pay the right price.

The fact of the matter is that the airlines have not been paying the right prices, especially in Nigeria. They have not been paying the right price. Yes, there is understanding that it was like that before, but now things have changed. We need to get equipment and not just equipment, modern equipment. Equipment needs at the ramp today is quite different compared to what we used to have in the past. Things have changed. Even the cost of forex these days and then the cost of exchange rate, the economy, the staff, you are working with have changed.

COVID-19 has also come in with its own challenge of certain protocols of some PPE (personal protection equipment) that you must use to do this work. And so, with all these things and the cost of running the machines, the wear and tear of the machines, because it is just like your car, the machine can break down without giving you notice and before you know it, you are running to get it fixed or replaced.

Let us talk about agro export. Reports indicate that SAHCOL has the unique quality of being more prepared than others in the area of export of perishable goods. So, what are the stages and how prepared is SAHCOL to boost such exports?

For us at SAHCOL, we have been prepared for a long time. We are just waiting for the exporters, whether it is export or import. We have been there for so many years. We put up cold rooms because most agric products need cold rooms at certain temperature of which those things must be kept. So, when we were building our warehouse; you will understand that we have the best cargo warehouse in West Africa as at today and it is fully automated. By the time we were building our warehouse, we took this into consideration and we put in the temperature control fridges and freezers, up to the point that warehouses in this part still have a time they operate.

There are Customs bonded warehouses. But for us it is 24 hours, no matter what you are shipping into the country; we have places where they will be kept. So, when you come in at any time of the day on the aircraft, you have to be sure that those things are well kept in that environment. So that is exactly the kind of preparedness we have. We have the trained personnel to handle dangerous goods, even up to recently the pharmaceuticals and other things like that. So, for us we are providing the right kind of training, in terms of the facility, in terms of manpower and in terms of the equipment.

So we have gotten all these things in place and I can tell you that we have been prepared. When we prepared for export of products from Nigeria, Nigerians were not even exporting much from aviation. But I know where we have gotten to in terms of our export facility today. We are looking for expansion; we are talking with FAAN to give us space to expand our export. Because where we are now is quite tight and I know that one way to grow is to continue to expand. For Nigeria, the language Nigeria does understand was to import but we are not pushing anything out. But suddenly Nigerians are beginning to understand that the only way you can source for or get forex into the system is to also engage in export because export is dollar-based.

So, I am telling you we are doing very well in export, our export has grown. We are determined to expand. We are also engaging FAAN to give us space.

Industry observers say there is too much bureaucracy in the processing of exports at the airports. Has the situation changed?

Yes, there is bureaucracy for people moving exports. Most of the airlines that move export from Nigeria use their belly hold. Most cargo flights that bring in cargo expect to take some cargo out of the country. Now the volume of exports has gone up and requires the services of cargo airplanes. There are a lot of bureaucracies in place, which have to do with various government agencies. We have some bodies that have been fighting against this and urging the government to look at these impediments and some of these bodies pushing for this have got as far as the Presidency.

But at the end of the day, when all these bureaucracies are taken care of, the price of export products will increase. These products are being exported to go and do one thing; they will go and compete in the market out there. By the time it gets outside, the cost of movement compared to what you have outside there, when you get there you just can’t compete. So, it becomes a challenge.

Are you working with the Nigerian Export Promotion Council?

They visit us and they have been in this environment recently. I have read something in the media. So, they can’t say they are not aware of these challenges that the airlines are having in terms of movement of things. They said it and it is there in the media. These are some of the things they needed to pick on and do something about it. I think that is one of their core mandates.

Compared to the last five years, would you say there has been an increase in what you export and what are the major things you export?

Yes, there is an increase. Export is growing by the day, especially exposure to export in aviation. It is growing by the day, I can tell you that. And when Nigerians export they export anything exportable. Many things that Nigerians produce are needed from neighbouring West African countries. So, many of our products produced here by some of these big manufacturing companies in Nigeria, they ship them to neighbouring countries.
And also many of our products also go to, especially these agro products that you are talking of, many of them go to our warehouse. Like snails, they are shipped outside the country. Others are oil, spare parts, women hair, weave-on, kolanuts, the list is endless.

We are yet to meet the standard of packaging?

Packaging is still a challenge. For me as a brand person I would have first compared what comes in with what goes out. The one that comes in, how are they packaged? When you see a packaged product come into the country, compare it to what is done here, you will observe that we have a long way to go. There is no doubt that we could work with so many organisations. I know of companies that are already interested in packaging of export, but it is the synergy that we are talking about. And of course you will also talk about the Custom agents. I think they have a major role to play in this place. Let us standardise because whatever goes out of this country goes to sell Nigeria.

So, if the packaging goes out and they say these goods are coming from Nigeria and they look at the presentation if they are not good looking it will form negative opinion about Nigeria. I believe that government must put interest in it to ensure that whatever goes out of this country is given the proper standard. There must be a standard of what the packaging should be on or should look like.

Since you went public, how has your operations been going and how do you intend to use the synergy between SAHCOL, Marriot and Sifax to deepen your operations in the aviation sector?

SAHCOL came out of the ashes of Nigerian Airways and because of what happened to Nigerian Airways after it was liquidated, SAHCOL needed to be helped. At that time it was a parastatal under the Federal Government of Nigeria. And so government decided to sell and SIFAX Group bought it. Many companies have been privatised and they have been very unlucky. But I think for us we are a very fortunate company that a company like SIFAX Group came to buy SAHCOL, which is now Skyway Aviation Handling Company Plc (SAHCO). And, of course, being a fully indigenous company in Nigeria, one would have thought what could they do? But rather than the then SAHCOL going down, it survived.

Obviously when companies are privatised, one of the things that you will know is that staff will lose jobs. And even while they are there, so many other things will be happening that will become a challenge but that did not happen to SAHCO. Apart from staff retaining their jobs, the staff strength of SAHCO grew, almost doubled from privatisation to now. So that is what SIFAX Group has done. Now, one of the challenges SAHCO was having before was the challenge of equipment because our equipment are so much capital intensive.

But when SIFAX Group came in, one of the first things I saw was massive deployment of equipment and it could only take SIFAX Group to do that. They came as a saviour of course. SAHCO was given to them 100 per cent, with the charge to do whatever it would take to succeed. Of course, when you have a child that is not doing well, that you don’t even have a hope if he will survive, you can easily hand over the child to everybody.

SAHCO has become a beautiful bride because it is doing well, it is listed in the stock market and it is doing very well. Because SIFAX Group played its role well, they invested and they allowed the company to survive.
SIFAX Group came as a saviour and became the 100 per cent owner of this place. Until 2018 when SIFAX Group had to respect the share purchase agreement that said, divest some percentage of the shares to the stock market.

So that was how SIFAX Group took SAHCO to the stock market and gave out some shares to the Nigerian public whereby you now have shareholders with SIFAX Group. And Dr. Taiwo Afolabi is still the major shareholder of SAHCO. So, SIFAX Group is the major shareholder of the Skyway Aviation Handling Company Plc with other shareholders as listed in the Nigerian Stock Exhange.

Now that is the relationship. SIFAX Group owns through a company called Mac-Folly, for example, we can say that SAHCOL is also a subsidiary of the SIFAX Group. So SIFAX Group is a group that has interest in Maritime, in the hospitality industry, in the oil and gas, in haulage, as some other aspects of transportation.

SIFAX Group invested in SAHCOL, and just the same way SIFAX Group has a hospitality arm called the Mac-Folly Hospitality. So Mac-Folly was the one that built Marriot Hotel. Well, Marriot is fully managed by the Marriot Group, but SIFAX Group built it and handed it over. They have the franchise, they are the owner of the group and they built it 100 per cent and handed over to the Marriot brand. The Marriot brand manages Marriot Ikeja, Lagos, but it is owned by SIFAX Group through the Mac-Folly Hospitality. So, we are all subsidiaries of the group.

Lets talk about airport security and security of the goods that come through your company. What is your relationship with the Nigerian Customs Service?

One of the things I have come to understand is that we are a community of people and we are just like the human body. Just as different parts of our body work together to sustain our existence; that is the way it is in aviation. Every aspect of service delivery helps the body, which is aviation, to prosper.

For us as a ground handling company, we operate Customs bonded warehouse. One of the things that aviation sells to us is safety, safety, safety and safety. And for safety to be right, the security has to be right. For example, if you are looking at it from the cargo aspect, definitely we have various levels of security that we operate with. And in talking about the safety of goods and cargo that passes through our warehouse, yes it is actually the duty of the Federal Airports Authority of Nigeria to provide scanning machines for all the gateways across the federation. Even up to a point when we were waiting for FAAN and we were not meeting that responsibility, we went and spent our money and bought scanning machine and installed them in our warehouse. Even though we are still expecting FAAN to return our money to us because it is their duty; it is government responsibility to ensure that scanners are provided for gateways. And what we are doing is to ensure that we also help and enable the security architecture to be efficient. For goods that are shipped to Europe, we have what we call the ETD machines (explosive detectors) in our warehouses and these are investments that we have made.

Apart from the security agencies that operate in our warehouses, don’t forget we are just a gateway. Just like the international airports, government has put their agencies, from the NDLEA, Customs, Quarantine, SSS, Immigration, to ensure that their eyes are open to track whatever that passes through that gateway that has to do with their specific areas of calling and they know how to cooperate and how to do that.

So we are there, we cooperate with all the security agencies to ensure that the work within the area of our operation are not hampered.

We give them all the full support because at the end of the day we are working towards the same goal and the same aim which has to do with the facilitation of cargo, passenger or goods from one point to the other in a very safe and in a very secure way. For example, in SAHCO our motto is speedy, secure, safe and expedient ground handling service.

So, we support security and we work hand in hand with all security agencies apart from our own security. Because we have various level of security that are engaged that we are paying, even in our facility here we have the police, Civil Defense, even for night operations, we have our own aviation security on ground. And we have another sub security and we have surveillance system that monitors the security and, by the grace of God, this environment is fully surveillance covered. So, from the time the goods are coming out from the ramp, we follow up to ensure all goes well.

Have you had issues of people bringing in drugs and how were you able to manage it?

I can tell you that the National Drug Law Enforcement Agency (NDLEA) director here is much in touch with us. And the way we operate, we would have wished that the issue of drugs were fully eliminated.

But one thing I have realised sitting on this seat is that criminals will always be criminals. I used to tell a proverb that I picked from Chinua Achebe’s Things Fall Apart; the eneke the bird said since hunters have learnt how to shoot without missing; I have learnt how to fly without perching. That is how the security agencies are tackling security issues at the airport. If you have been in aviation for some time you will notice that there is continuous restriction, as criminals became more daring.

Before I even started working as an IT student, I can enter the Murtala Mohammed Airport and go to anywhere up to the ramp. We will drive at the airside and go anywhere but over time things have changed. Do you know why? Because of the challenges of security, and that is why even myself as the Managing Director of SAHCO, I can’t just move into the airport without being challenged. Even with my ODC (On duty card) I still have to go through some levels of checks before I will be allowed to access certain areas of the airport. That is exactly what has happened.

So, when you are talking about the issue of drugs, you will be surprised why in their wisdom the government had to set up a full agency called the NDLEA. They are all over the country and because they know that the criminals will continue to try. I wish you know what these drug people are doing. Every day they are becoming more sophisticated in their way of operation. And also the NDLEA, I know they are not sleeping, many times they share the tactics that they are using. And what have we done also? That is why we talked about the scanning machine, we put the scanning machine and we have come up with ETD and so many other gadgets to track all these things.

Our duty also is that we are giving the NDLEA and all those people that are involved the level playing ground to ensure that they do their work. We don’t interfere in their work. If they have suspicions and they said they needed to do anything, we give them all the full support that is needed. And so, that is one of the major role that we play, and if we identify, I can tell you that many times our staff have also tracked the cargo because sometimes we give them some level of training to identify certain things. I am telling you they tell the officers that have been trained to do that and they take it to a new level.

So we are giving that support. But it is unfortunate that those drug people have continued with their nefarious activities. We don’t interfere with the authorities because we have the NDLEA officials in our facilities and their duty is to ensure that they monitor what is going on. Once in a while they even bring in their dogs and the dogs will bring out certain things. They ensure that they continue to go after them and catch them. They don’t give them free access to continue to operate as they like.

When I called about the Ilorin Airport incident recently, you argued that an airport should have necessary equipment; that if there is any incident like an aircraft breaking down on the runway, it should be able to use that equipment to take it out and it made sense. So, do you still maintain that position or what is the general notion about that?

You know when we were talking about handling charges; I took you through certain things. For us, apart from just being ground handling company, we are here for business too. Somebody will even ask you what is wrong with you. It is just like an airliner taking an aircraft and flying it to an airport where they are not picking passengers; you are not picking cargo from there, which is foolishness in investment.

So, for us as ground handling company, we cannot just move equipment to areas where they are not needed. Yes, it was an unfortunate issue that happened on the landing of the aircraft. Of course, incidents happen everywhere, you can even drive your vehicle on the way and your tyre got busted on the way. That was one of the things that happened, but when it happened because of the level of operation in that place, I learnt it needed to be moved out of the runway. In Lagos here when things like that happen, we deploy some of our equipment to assist the agencies to move that.

So, everybody in this industry have their duties and responsibilities and government also have their duties and responsibilities. For us as a ground handling company, we pay 5 per cent of our gross revenue to government through FAAN. So it is expected that they have also things they must provide to make my service work. Even though I might be doing one thing that the government should do, but it should not be expected because I pay tax to government.

All forms of taxes that we are supposed to pay we are meeting our obligations. We are still paying concession. So at that point like I said to you, when you called me, everybody has his responsibility. Yes, if we had the equipment there and we needed to assist at that particular point in time, we will do that. Why do you think that the government set up NEMA (National Emergency Management Agency)? And NEMA has all sorts of facilities to help at any particular point in time.

So, whatever agency or government, they should also have minimum things in case of emergencies like that. Like I said, the industry belongs to all of us, we should be sincere to speak out. I used that opportunity at the LAAC conference seminar to speak out on things all of us need because we all have to build this industry.

Fortunately, we are only opportuned to play our role today. There were people in the field of play yesterday and they are not here today. And some of them are only opportuned to watch from the flanks today, while others are in the field of play. We are here today; tomorrow it will be another person’s turn. But the question we should ask ourselves is, while we were here, what did we do differently? That is why we are speaking in that area, everybody is trying their best to speak and to counsel and to give the right advice but aviation must work. Because the man outside there, immediately they hear you work in aviation, they do not even understand the area you are working. Even you as a journalist, when they call you they think that you have answers to all problems.

So, that is why we must talk to ourselves and ensure that if the government needs to do something, then the government should do what it needs to be done. I am playing my role, I am meeting my duties and my responsibility to ensure that the industry continue to make progress. So, we believe that we all have our duties to help this industry grow.

But aviation companies are few. Can you form a cartel as some groups have done in this industry?

That would not be good for the industry. We understand that competition is good. But for us, like what AGHAN is pushing for now, let us compete on providing service. By the time you have a cartel, you can just say okay since you are now a cartel you just collect the money and they are not giving quality service, which is not good. But to do what we are trying to do, increase the price but not form a cartel. We can still compete on service.

Look at what is happening in the banking sector. You have the right to go to any bank where you believe that you are getting the service. But if we cannot be a cartel, yes apart from the fact that it is anti-competition, like you know, government will not allow us to do that. We are also people that respect the law. But also there is nothing bad because we have a common problem.

We can say okay let’s come together and see how we can solve this problem and that is why AGHAN was set up. It has been so bad for so many years that everybody wants to shortchange. I know I came in here just few years ago, but I can tell you that the rock has been there but nobody wants to sheath the sword for the other, who wants to bell the cat?

So we said okay, since it is like that, let us continue to be foolish, let’s do that war. We continued to drop prices since that is the way you can get a client and the airlines actually enjoyed what was going on. And that is exactly what has actually brought us to where we are today.

Competition is good but it is just that it will not be for the best interest of the aviation industry; to the airlines for us to come to the point whereby we say we are forming a cartel. Cartel is not for any industry, at the end of the day if we are not even careful with what we call cartel, it will also consume the ground handling companies, because it is not the best way. If the interest we are driving is for the flying public then the way to go is to just pay the right pricing for the kind of service that you are enjoying. I think that is the best way to go for all of us.

What has been your experience since you went public?

By the grace of God we are doing quite a lot. For us we have done very well. Since we went public, we have a duty to our shareholders.