Nigeria now considered safe for aircraft leasing as CTC compliance score increases

The Aviation Working Group (AWG) has increased Nigeria’s Cape Town Convention (CTC) compliance index score from 49 percent to 70.5 percent.

The development means that Nigeria is now considered safe for aircraft leasing by the AWG.

The AWG is a not-for-profit legal entity comprised of major aviation manufacturers, leasing companies, and financial institutions that contribute to the development of policies, laws, and regulations that facilitate advanced international aviation financing and leasing.

Jeffrey Wool, AWG’s secretary-general, informed Festus Keyamo, minister of aviation and aerospace development, of the group’s decision in a letter on Tuesday.

“Thank you (and your colleagues) for the time, effort, and skill over the past months on the Practice Direction issued late last week,” Wool said

“Based on that important legal development, AWG has swiftly and materially increased the Nigeria CTC compliance index score from 49 to 70.5.”

The federal government had, on September 12, signed the CTC practice direction.

The treaty, adjudged to reposition the country’s aviation sector, was signed by John Tsoho, chief judge of the federal high court, during a stakeholders’ meeting of the Presidential Enabling Business Environment Council (PEBEC) chaired by Vice-President Kashim Shettima.

On September 13, Keyamo had said Nigeria was perceived as a noncompliant country prior to the convention’s signing.

This, he said, led to the blacklisting of Nigeria by the AWG.

In documents detailing the resolutions of the AWG, the group said the CTC practice directions, which constitute legally authoritative rules, affirm Nigeria’s commitment to ensuring compliance with its CTC obligations and directs courts to apply convention without being qualified by other provisions of law in applicable cases.

“As such, the CTC Practice Directions supplant previous substantially non-compliant judicial precedent in Nigeria and the impact of such precedent are no longer reflected in Nigeria’s variable B score in accordance with our methodology. As a result, Nigeria’s variable B score has been increased from 1 to 3,” the AWG said.

“Adherence to the CTC Practice Directions by Nigerian courts in future cases relating to CTC would result in further increases to the variable B score.

“Due to the corrective action taken, AWG no longer recommends that a review of eligibility for the OECD discount be initiated for Nigeria on the basis of past non-compliance. Accordingly, Nigeria’s variable C score has been increased from 3 to 5.”

“Nigeria’s communication channel has worked effectively and efficiently with AWG to address the CTC compliance issues presented by previous judicial precedent, and, accordingly, its variable D score has been increased from 3 to 5.”

However, the group said Nigeria remains on the CTC compliance index watchlist as a separate compliance-related development is ongoing.