NIGERIA Trends and Developments Contributed by: Tamuno Atekebo, Chinasa Unaegbunam, Naomi Kabowei and Favour Osayuwamen, Streamsowers & Köhn
Streamsowers & Köhn 16D Akin Olugbade Street Off Adeola Odeku Street Victoria Island Lagos Nigeria
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Legislative and Regulatory Framework Shaping Aviation Financing in Nigeria Introduction The Nigerian aviation sector has witnessed a surge in strategic regulatory activities aimed at revitalising the sector’s access to financing. Amid persistent chal - lenges, ranging from inadequate fleet sizes to limited funding, policymakers and regulators are turning to targeted reforms to enhance the legal framework gov - erning aviation finance. Nigeria has significant domestic and regional air traf - fic and remains a pivotal market for aviation invest - ment. Airlines operating in the country have however struggled with access to affordable financing, weak infrastructure, and currency volatility. Several local airline operators are faced with high-interest loans, short leasing tenures, and frequent regulatory hurdles that impact capital inflow. The federal government, through the Ministry of Aviation, Aerospace Develop - ment and the Nigerian Civil Aviation Authority (NCAA), has responded with a reform agenda to improve the regulatory ecosystem and stimulate investors’ confi - dence. Cape Town Convention and IDERA enforcement A central element of Nigeria’s aviation financing reforms is the implementation of the Cape Town Convention on International Interests in Mobile Equip - ment and its Aircraft Protocol (the “Cape Town Con - vention”), which was ratified in 2006. The Cape Town Convention provides a harmonised legal framework for protecting the rights of creditors, lessors and finan - ciers of aircraft assets.
In a bid to reinforce compliance, the NCAA issued an Advisory Circular on Procedures for Recordation of IDERA and De-Registration of Aircraft Under an IDE - RA (“Advisory Circular”) to ensure that IDERA filings by lessors and financiers are promptly registered and honoured. The directives emphasise: • the mandatory registration of IDERA instruments with the NCAA immediately after lease execution; • time-bound administrative compliance with dereg - istration requests made under IDERA; and • streamlining the internal approval process to elimi - nate delays caused by legacy manual systems or ambiguous procedures. These steps are crucial for reassuring creditors that, in the event of default, they can repossess and export aircraft without prolonged legal delays or enforcement obstacles. In addition, Federal High Court Cape Town Conven - tion Practice Direction 2024 (“Practice Directions”) was also issued to assist courts in dealing with cases involving transactions made under the Cape Town Convention. Further to the issuance of the Advisory Circular and the Practice Directions, Nigeria’s Cape Town Compliance Index rating improved from 49% to 70.5% in 2025. This improved rating is expected to lower the risk ratios of Nigerian operators/carriers by foreign lessors and financiers and facilitate better financing terms from international lessors and export credit agencies.
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