Festus Keyamo, Minister of Aviation and Aerospace Development, has stated that international aircraft lessors and manufacturers require insurance to be sourced from the international market, not locally, before they can bring aircraft into Nigeria on dry-lease terms.
Keyamo shared this insight during an exclusive interview on the “News Night” program on Channels TV on Sunday, where he discussed the state of the nation’s aviation sector.
He highlighted that the international lessors and manufacturers have reservations about the capacity of Nigeria’s local insurance market to handle the risks involved in dry leases, insisting that this issue must be addressed before they will deliver aircraft to Nigeria.
The Aviation Minister pointed out a challenge to meeting this requirement, explaining that the National Insurance Commission (NAICOM), the agency responsible for regulating and controlling insurance business in Nigeria, mandates that all risks within the country be insured locally.
Keyamo acknowledged the importance of local content but noted a significant challenge: for the local insurance market to handle the risks associated with dry lease aircraft arrangements, most local firms would need to seek reinsurance in the international market, which would increase costs for local airline operators.
To address this deadlock, Keyamo revealed plans to initiate discussions with NAICOM to potentially allow an exception for dry lease insurance in the aviation sector, while keeping other aviation-related insurance local.
The Aviation Minister further explained that resolving the insurance issue, along with revising legal guidelines to prevent courts from issuing injunctions that block lessors from reclaiming aircraft from airlines that default on their dry-lease agreements, would encourage international aircraft lessors and manufacturers to bring their aircraft into Nigeria on dry leases.