By Obafemi Bajomo, Senior Special Adviser on Foreign Direct Investments and Capital Improvement Programs to the Honourable Minister of Aviation and Aerospace Development
In a decisive move that signals the federal government’s commitment to a sustainable and globally competitive aviation ecosystem, the Honourable Minister of Aviation and Aerospace Development, Festus Keyamo, SAN, CON, has engineered a landmark reform in Nigeria’s aircraft insurance regulatory framework—paving the way for greater investor confidence and enhanced local airline participation.
The new directive issued by the National Insurance Commission (NAICOM), which takes effect May 1, 2025, introduces special provisions for the insurance and reinsurance of leased and financed aircraft—a long-standing pain point for lessors, financiers, and local operators alike. But behind this policy, milestone lies a story of strategic vision, regulatory diplomacy, and unwavering leadership.
It all began on May 30, 2024, when the Honourable Minister, responding to industry-wide concerns raised by the Airline Operators of Nigeria (AON) and foreign lessors, penned a compelling letter to Vice President Kashim Shettima, Chairman of the Presidential Enabling Business Environment Council (PEBEC). The same letter was copied to the Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun.
The Minister’s plea was simple yet urgent: in order to grow local airlines while upholding international standards, Nigeria must address the high-risk perception that deters aircraft lessors from entering the market—starting with a concession for aircraft insurance on dry lease terms.
The Vice President swiftly acknowledged the importance of the issue, directing PEBEC to intervene and liaise with NAICOM to chart a feasible path forward. What followed was a cascade of inter-agency collaboration: consultations between the Ministry, NAICOM, the Nigerian Civil Aviation Authority (NCAA), Nigerian Insurers Association (NIA), and the Nigerian Council of Registered Insurance Brokers (NCRIB) culminated in a landmark stakeholders’ meeting on November 6, 2024, at the Transcorp Hilton, Abuja.
Still, the Honourable Minister was not done. Determined to match Nigerian policy with global best practice, he led a high-level delegation—including regulators and key stakeholders—to the Airline Economics Growth Frontiers Global Conference in Dublin in January 2025. Hosted by Boeing, Nigeria facilitated an exclusive insurance forum at the event, bringing international lessors and financiers face-to-face with Nigerian regulators.
That meeting proved to be a turning point. Armed with international insights and industry benchmarks, the Honourable Minister returned to Nigeria and established a technical committee to distill the findings into actionable policy.
The result? An addendum to Chapter Five of the Prudential Guidelines for Insurers and Reinsurers (2022), now formalized by NAICOM. The directive allows:
- Nigerian insurers to retain only 10% of net liability and 30% of gross capacity, reducing exposure while maintaining local participation.
- Acceptance of “cut-through” clauses, ensuring financiers are paid even in case of local insurer default.
- Simplified requirements for proof of international reinsurance coverage.
- Approval for international placements under new, less-restrictive conditions.
This thoughtful blend of local inclusion and global confidence is more than an insurance policy, it’s a blueprint for a sustainable aviation ecosystem.
“True sustainability,” the Minister noted recently, “goes beyond infrastructure—it’s about trust, credibility, and creating an environment where both investors and indigenous operators can thrive.”
Industry leaders have hailed the reform as a game-changer. International lessors now have greater assurance that their assets are protected in Nigeria, while local airlines benefit from a more attractive leasing environment that supports growth and compliance with global standards.
As Nigeria eyes its goal of becoming West Africa’s aviation hub, this reform affirms that bold leadership, strategic engagement, and forward-thinking regulation remain essential instruments of transformation. Festus Keyamo’s approach offers a masterclass in public sector problem-solving—one that ensures Nigeria is not just flying, but soaring.
Discussion about this post