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Aircraft Leasing Activity in Nigeria Remains Limited Despite Sector Reforms

Aircraft Leasing Activity in Nigeria Remains Limited Despite Sector Reforms
Progress in Regulatory Compliance
Nigeria has made significant strides in aligning its aviation sector with international standards, achieving a 75.5% compliance score on the Cape Town Convention Index. This improvement follows reforms to the Irrevocable Deregistration and Export Request Authorisation (IDERA) framework under the Nigerian Civil Aviation Authority (NCAA), spearheaded by Aviation Minister Festus Keyamo. These reforms were designed to bolster creditor protections and enhance Nigeria’s standing among global aircraft lessors and financiers.
Industry experts, including aviation finance executive Gemade, have hailed Nigeria’s removal from the Aviation Working Group (AWG) watchlist as a pivotal achievement. This development signals to international stakeholders the country’s commitment to adopting global best practices. Enhanced regulatory compliance has improved Nigeria’s reputation, making it a more attractive destination for lessors and financial institutions seeking stable and predictable markets.
Persistent Challenges Limiting Leasing Activity
Despite these regulatory advancements, aircraft leasing activity in Nigeria remains constrained. Gemade cautions that reforms alone are insufficient to stimulate large-scale investment or leasing. Investor confidence is still in a recovery phase, with leasing companies maintaining a cautious stance. This “lagging effect” means financiers require consistent evidence of policy implementation and operational reliability before increasing their exposure to Nigerian airlines.
Beyond legal protections, lessors evaluate operational efficiency, airport infrastructure, maintenance capacity, fuel price stability, taxation, and broader economic conditions. Ongoing challenges in these areas continue to impede leasing activity. For instance, high jet fuel prices threaten to disrupt Nigerian airline operations, exacerbating difficulties in accessing international leasing markets. Similar structural issues affect the wider African aviation market, limiting the region’s appeal to global lessors, although some firms like TrueNoord are expanding their footprint.
The cautious approach of global leasing firms is reflected in the scarcity of high-profile deals. Air Peace’s dry lease transaction in late 2025 remains one of the few publicly visible aircraft financing agreements involving a Nigerian airline since the reforms.
The Need for a Holistic Aviation Strategy
Gemade emphasizes that sustainable investment inflows require more than regulatory compliance. He advocates for a comprehensive approach that includes coordinated development of infrastructure, airline operations, maintenance capabilities, and financial systems. He cites Saudi Arabia as an example of a country pursuing an integrated aviation strategy, combining investments in airlines, airport infrastructure, and maintenance facilities to attract long-term capital. In contrast, Nigeria’s aviation sector remains fragmented, with airlines operating independently and competing for limited aircraft supply and financing. This fragmentation weakens their bargaining power and increases operating costs.
Global supply chain disruptions and aircraft shortages further complicate the landscape. The International Air Transport Association (IATA) projects that global aircraft order backlogs will reach approximately 17,000 units by 2025, resulting in delivery delays and higher leasing costs. While sustained high oil prices could potentially benefit aircraft lessors such as AerCap, the immediate impact on Nigeria’s aviation sector poses significant challenges, particularly for smaller and emerging market carriers.
Despite recent reforms, Nigeria’s aviation sector continues to confront structural and market obstacles that restrict the growth of aircraft leasing activity. Overcoming these challenges will require sustained and coordinated efforts across the entire aviation ecosystem.

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