FG Shrinks Aviation Budget, Eyes Private Funding
Atume Terfa
Nigeria’s aviation industry is heading into 2026 under a new financial reality, one shaped by leaner government spending and a stronger reliance on private capital to keep airports viable. With public funds tightening, the Federal Government is recalibrating its role in the sector, shifting from direct funding to a model that leans heavily on private investment and commercial efficiency.
The 2026 Appropriation Bill reflects this change in direction. The Ministry of Aviation and Aerospace Development received an allocation of ₦87.3 billion, a sharp 23 per cent cut from the ₦113.19 billion provided the previous year. The reduction signals not just fiscal restraint, but a deliberate policy move to rethink how Nigeria’s airports are funded and managed in the long term.
Despite the lower envelope, the government has kept its focus on capital projects rather than day-to-day running costs. Key agencies such as the Nigerian Airspace Management Agency and the Nigerian College of Aviation Technology saw their budgets tilted toward infrastructure and project execution, reinforcing the push to modernise facilities even as recurrent spending is squeezed. Officials insist the approach is part of a broader reform effort aimed at breaking a long-standing cycle in which public funds are used to prop up airports that consistently operate at a loss.
Aviation and Aerospace Development Minister Festus Keyamo has been particularly vocal about the problem. He has repeatedly warned that many regional airports are severely under-utilised and survive largely on subsidies drawn from the revenues of busier gateways like Lagos, Abuja and Kano. According to him, this cross-subsidy model is no longer sustainable and ultimately slows the sector’s growth.
To change the narrative, the government is accelerating plans to concession smaller, non-profitable airports to private investors. Under this arrangement, private operators would take charge of airport development and operations, with a mandate to turn them into commercially viable hubs. The vision goes beyond runways and terminals, aiming instead for “aerotropolis” ecosystems that include hotels, shopping centres, offices and conference facilities. Enugu Airport has already moved into private hands, while Port Harcourt is close to sealing a similar deal, with several others at different stages of evaluation.
The strategy aligns with long-standing concerns from economists and industry analysts who argue that Nigeria operates more airports than traffic volumes can realistically support. With only a few facilities handling the bulk of passenger and cargo movement, private sector efficiency is increasingly seen as the most practical solution to unlocking value from dormant infrastructure.
Beyond concessions, the shift toward private capital dovetails with wider modernisation efforts. The Federal Airports Authority of Nigeria is courting international partners to inject technology and expertise into airport operations, including the rollout of cashless payment systems designed to improve transparency and boost internally generated revenue.
Still, the new direction has not been without criticism. Some industry stakeholders caution that budget cuts, even when paired with private investment, will only succeed if backed by a clear and coherent reform framework. Transparent concession processes, stable policies and credible investors will be critical if the government’s strategy is to deliver lasting improvements rather than short-term fixes.
Ultimately, the 2026 budget marks a turning point for Nigerian aviation. It signals a gradual retreat from heavy government financing and a decisive move toward market-driven solutions, with private capital expected to play a central role in shaping a more sustainable and competitive aviation sector.
