NIGERIA Trends and Developments Contributed by: Tamuno Atekebo, Chinasa Unaegbunam, Naomi Kabowei and Favour Osayuwamen, Streamsowers & Köhn
Further, strengthened IDERA enforcement would encourage lenders and lessors to offer improved financing terms, extended tenors on aircraft leases, and more favourable security arrangements. It may also enhance Nigeria’s eligibility for export credit agency (ECA) funding, which typically requires com - pliance with the Cape Town Convention. Dry-lease framework and the Afreximbank facility In January 2025, the African Export-Import Bank (“Afreximbank”) Dry-Lease Financing Initiative was announced. The initiative, spearheaded by Afrex - imbank, will provide 25 dry-leased aircraft to Nige - rian airlines. Under the initiative, aircraft will be leased through a special-purpose leasing subsidiary domi - ciled in jurisdictions aligned with Cape Town Con - vention standards, and having lease agreements governed by English law or similarly recognised legal regimes. It is expected that local carriers participating or intend - ing to participate in the initiative will be required to adhere strictly to IDERA protocols, which demands compliance with international standards. The ben - efits of the initiative for Nigerian operators include the elevation of the overall standard of aircraft operations and fleet management in Nigeria. It is expected that the initiative will introduce Nige - rian carriers to a disciplined legal framework, which aligns with international standards and boosts cred - ibility with global lessors. NCAA and ministry-level policy actions The NCAA has embarked on a digital transformation towards creating and maintaining an efficiency-driv - en regulatory body. This initiative targets two major procedural bottlenecks – licensing and aircraft reg - istration. Manual inefficiencies in aircraft registration, operator certification and document authentication discouraged international lenders from engaging con - fidently with Nigerian carriers. Delays in confirming ownership, deregistering assets or verifying operator standing often resulted in higher transaction costs and extended lead times. These processes are of particular concern to aircraft financiers and lessors, as they form the backbone of legal and operational risk assessment.
To address these concerns, the NCAA launched a centralised e-portal in December 2024 – its Direc - torate of Air Transport Regulation (DATR) e-portal, a single-window digital portal for aircraft registration, deregistration, licensing, airworthiness reviews, and air operator certificate applications. This reform was part of the NCAA’s 2024 project agenda, which also included aligning IDERA enforcement and compliance procedures with global leasing standards. While the platform is still developing, it is a significant step towards transparency, traceability and regula - tory efficiency. From a financier’s perspective, the availability of online records reduces dependence on physical document trails and in-person follow-up. It also improves the process of due diligence. These digital reforms, although not yet comprehensive, represent an important structural shift that enhances the viability of aircraft leasing transactions in Nigeria. As the NCAA continues to fine-tune its systems and build inter-agency connectivity, lessors and lessees can expect an increasingly predictable environment for regulatory compliance and risk management. Challenges In Nigeria, a major challenge to aircraft financing and leasing is insurance cover. International lessors are typically concerned about the capacity of the Nigerian local insurance market to adequately underwrite the risks inherent in dry-lease arrangements. Notably, the National Insurance Commission (“NAI - COM”) requires that all insurable risks occurring within Nigeria must be underwritten by local insurance companies. However, given the substantial financial exposure associated with dry leasing, local insurers typically lack the capacity to carry the full risk and therefore need to obtain reinsurance from international markets. This reliance on foreign reinsurance arrange - ments results in increased insurance costs, which are ultimately borne by local airline operators, thereby increasing the overall cost of leasing aircraft in Nigeria. Further, volatility in the foreign exchange market – particularly the persistent depreciation of the naira against the US dollar – has significantly increased both the cost and unpredictability of leasing arrange -
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