The Minister of Aviation and Aerospace Development, Festus Keyamo, has said that Nigerian airlines are burdened with higher insurance premiums compared to their foreign counterparts, paying an additional 10-20 per cent due to perceived risks within the country’s aviation sector.
Speaking at the dry leasing conference in Dublin, Keyamo underscored the issue, explaining that these premiums are not based on actual risks but on external perceptions of Nigeria’s aviation ecosystem.
“The Nigerian airlines have always paid about 10-20 per cent more of the premium that other airlines in other jurisdictions pay, and I think it is because of the perceived risks within the Nigerian aviation ecosystem,” the minister stated.
Keyamo further clarified his stance on these “perceived risks,” asserting that Nigerian airlines have proven their reliability and financial responsibility. “I used the word perceived because we think the risks the world perceives within Nigeria are not real. For example, most of the airlines run their fleet on aircraft, crew, maintenance, and insurance, and they are able to meet up with their obligations.
“The ACMIs that they run come with financial obligations, and we do not have a lot of them defaulting. It means that we have a lot of responsible airlines within Nigeria,” he explained.
The minister also emphasised the government’s commitment to addressing this issue by engaging with stakeholders in the insurance sector to change these perceptions and reduce the financial burden on Nigerian airlines.
“We want to let the world know that this risk they perceive is not real. We are working with the insurance stakeholders from Nigeria for them to understand our position better.”
So that’s the conversation that is going on,” Keyamo said.
Describing the situation as a “challenge,” Keyamo expressed optimism that ongoing discussions would “untie that knot around insurance,” ultimately ensuring unjustified premiums no longer overburden Nigerian airlines.
