Concerns of the Nigerian-Brazillian Loan
The recent announcement of the Nigerian Government to acquire the sum of $1.2 from Brazil is uncalculated. In 2017, President Buhari secured the purchase of Twelve A-29 Super Tucano Aircrafts for the sum of $494m paid upfront. The Aircrafts are originally Brazilian, manufactured by Embraer. The United States Government in 2013 made purchases for 20 of the same Aircrafts from Brazil the sum of $427.5m.
In 2017, President Buhari secured the purchase of Twelve A-29 Super Tucano Aircrafts for the sum of $494m paid upfront. The Aircrafts are originally Brazilian, manufactured by Embraer. The United States Government in 2013 made purchases for 20 of the same Aircrafts from Brazil the sum of $427.5m.
Based on reports of the deal, the conditions set forth were that the Aircrafts won't be delivered until 2021 with additional support and training agreements to be completed by 2023 with then Nigerian Minister Mansur Dan Ali, requesting a re-negotiation to include 2020 transfer date for the aircraft and that Nigerian technicians will not be trained by U.S. staff, be part of maintenance crews, and not to the production of the planes. A complaint that never made its way out of Abuja. The contract of the Aircrafts, were awarded (by US Government) to Sierra Nevada, a United States Aerospace & Defence supplier (partnered with Embraer) for the sum of $329m to include forward infrared systems, Spare parts & Ground support equipment. Giving the US Government a profit of $165m (On a brokered deal).
The Federal Government should have approached Brazil directly to loan the purchase. That would have given Nigeria a debt balance of $700m. The $494m used would have been available to pay off 10% of the Loan immediately, to allow for payback time. That would have still given an allowance to increase Defence spending by up to $350m. Even though the loan acquired by the Nigerian Government was for Agricultural purpose, the Aircraft purchases could still be negotiated within. This shows that there is a weak communication between the Defence, Foreign Affairs & Finance ministries in respect to the Central Bank of Nigeria.
Solutions would be to centralise communications between Federal Government parastatals and the improvement of the culture of open conversations related to such purchases both by the Executive and Legislative arms of Government.
Parnda Hedima is a Business, Aviation & Research Consultant who is a member of the National Business Aviation Association. Experimental Aircraft Association, & Aircraft Owners & Pilots Association.
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