Nigeria has taken a significant step towards enhancing its aviation sector by introducing new guidelines for its Federal High Court. These guidelines aim to ensure greater compliance with the Cape Town Convention and its Protocol on International Interests in Mobile Equipment, specifically focusing on aircraft.
The new Practice Directions were formally signed by Vice-President Senator Kashim Shettima during a Presidential Enabling Business Environment Council (PEBEC) meeting held in Abuja. Aviation and Aerospace Development Minister Festus Keyamo, a staunch advocate for the growth of domestic airlines, highlighted the significance of this development. One of his key priorities within his 5-Point Agenda is to foster the growth of domestic airlines while maintaining adherence to global standards.
The Cape Town Convention, a cornerstone of international aviation finance, regulates aircraft leasing agreements between airlines and manufacturers like Boeing and Airbus. Nigeria’s previous lack of compliance with this convention resulted in the country being blacklisted by the Aviation Working Group (AWG), which monitors adherence to the Convention. The AWG raised concerns about Nigeria’s legal framework, particularly its inability to meet the Convention’s requirement of a 10-day response time for creditors seeking urgent remedies.
With the unwavering support of the President, Vice-President, and Attorney-General, Minister Keyamo worked closely with judicial bodies to address these legal challenges. This collaborative effort culminated in the Chief Judge of the Federal High Court signing the new guidelines.
These updated directions are expected to have a positive impact on the aviation industry. By streamlining aircraft acquisition and enhancing investor confidence, they are anticipated to enable Nigerian airlines to acquire aircraft at more competitive rates. Minister Keyamo emphasizes that this initiative will significantly accelerate the growth of the aviation industry, creating jobs, promoting economic development, and ultimately positioning Nigeria’s aviation sector to compete effectively on the global stage.
Nigeria ratified the Cape Town Convention and its Protocol in 2001. The Convention was subsequently incorporated into the country’s legal framework via the Civil Aviation Act of 2006, with further amendments introduced in 2022. These legal obligations require Nigeria to align its legal framework with the Convention’s provisions, including adherence to the prescribed timelines for remedies.
The Cape Town Convention mandates that aircraft deregistration and export requests be processed within five days. However, Minister Keyamo has committed to shortening this period to four days for leased aircraft in default. This commitment further demonstrates Nigeria’s dedication to facilitating smoother operations within the aviation sector.
The Cape Town Convention, jointly developed by UNIDROIT and the International Civil Aviation Organization (ICAO), aims to facilitate asset-based financing and leasing of aircraft. A nation’s compliance with the Convention’s terms has a direct impact on its economic well-being, as it fosters a conducive environment for aviation investment and growth.
Since Nigeria’s removal from the Aviation Working Group’s non-compliance list, Minister Keyamo has actively pursued a strategy to revitalize the aviation sector. Earlier this year, he visited Airbus in France, followed by the signing of a Memorandum of Understanding (MOU) at Boeing’s Charleston facility in South Carolina on August 29, 2024. These efforts underscore Nigeria’s commitment to developing its civil aviation sector and positioning it for future success.
