The Ethiopian Airlines Consortium has written to President Bola Tinubu over the ongoing dispute involving Aviation Minister Festus Keyamo, and the controversial Nigeria Air project.
Titled ‘Ethiopian Airline Consortium Plea On The Issue Of The National Carrier”, the letter – dated October 15 and received by the presidency on October 17 – was signed by consortium representative, Mr. Michael Adebayo.
The petition expressed dissatisfaction with Keyamo’s comments, including the use of the term “fraud”, saying such could undermine a collaborative relationship of over seven decades.
During a recent Zoom meeting which discussed the Aviation industry, the Minister raised issues regarding certain clauses in what he referred to as a “Master Agreement”.
But the letter to the President, sighted by Economic Confidential, maintained that the correct designation is “Establishment and Operations Agreement”, not “Master Agreement” as presented.
The consortium provided documentation to back its claims, including copies of the agreement held by the Ministry of Aviation, the Ministry of Justice, and the Infrastructure Concession Regulatory Commission (ICRC).
It addressed Keyamo’s statements on staffing, tax measures, and operations, saying while it is common for investors to provide initial management staff, Nigerians had already been shortlisted for important positions.
The consortium countered the assertion that profits would be repatriated to Ethiopia, explaining that under Nigerian laws, a company with a 51% local ownership structure must have the majority of profits remain in Nigeria.
The letter warned that the negative portrayals of Keyamo’s remarks could deter foreign direct investments, which are critical to the Nigerian government’s broader reform efforts.
It reads in parts: “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 stabilize 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.
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