Cash-strapped States Waste Billions On Unprofitable Airports

Nigeria’s state governments are pouring billions of naira into building and maintaining airports that remain largely unprofitable, raising significant concerns about fiscal responsibility and economic planning. Only five of Nigeria’s 32 airports are currently profitable, highlighting a stark contrast between the substantial investments made and the negligible returns on these projects. The question of viability looms large as these state-funded ventures continue to drain taxpayer money without yielding the expected benefits.
A breakdown of state airport expenditures shows that Bayelsa State spent N60 billion on its airport, while Akwa Ibom spent N20 billion. Delta and Jigawa spent N17 billion each, while Bauchi pumped N15 billion into an airport project.
Kebbi, on its part, spent N15 billion on an airport. Other states which are on the same journey are: Ogun (N20 billion), Ekiti, (N20 billion), Abia (N40, billion) Kebbi State (N15 billion), Nasarawa State (N40 billion), Osun (N40 billion) and Zamfara (N62.8 billion) billion.
Anambra State cargo airport in South-East Nigeria cost N10 billion, while Bayelsa International Airport gulped N60 billion.
More so, Wachakal Airport, Damaturu, Yobe State, costs N18 billion but is still uncompleted. Dutse International Airport, Jigawa, cost N20 billion.The statistics are alarming.
Despite such heavy expenditures, NATIONAL ECONOMY investigation shows that the airports in Lagos, Abuja, Kano, Port Harcourt, and Enugu account for nearly 90 per cent of the nation’s passenger traffic. This means the remaining 27 state airports collectively handle just over 10 per cent of the air traffic, rendering the investments into these airports highly questionable.
The core issue is the misalignment of priorities. A former airport commandant and aviation consultant, John Ojikutu,commenting on the issue, urged that state governments should focus on essential infrastructure like roads, schools, and hospitals rather than building airports that do not attract sufficient traffic.
Akure Airport in Ondo State, for instance, has not seen more than 200,000 passengers in a decade, raising doubts about the necessity of another airport in neighbouring Ekiti State.
Similarly, the airport in Umueri, Anambra State, situated between Enugu and Asaba, raises questions. Ebonyi is close to Enugu, and Abia plans to construct an airport between Owerri and Port Harcourt. This pattern is seen in many northern states as well, such as Bauchi, Gombe, and Taraba.
It is seen across the country, with airports being constructed in proximity to already existing and under-utilised facilities.
“These states would benefit more from building toll express roads connecting their capitals to the nearest airports,” said one frequent air traveler, Francis Nwaobasi.
Ojikutu pointed out that most air travelers are government and corporate officials on official trips, with fares covered by their employers.
“It makes no economic sense for states to build new airports when they could allocate the funds to other social services like schools, hospitals, and roads,” Ojikutu added.
The concept of ‘white elephant projects’ perfectly encapsulates the economic inefficiency at play. These airports, built with public funds, fail to generate revenue or attract significant passenger traffic. The maintenance of these airports is also a burden, with some state governments transferring maintenance responsibilities to the already overburdened Federal Airports Authority of Nigeria (FAAN).
As highlighted by the CEO of Mainstream Cargo Limited, Seyi Adewale, these airports cannot often generate enough revenue or attract investors and tourists, making them economically unviable.
The chief economist at PriceWaterhouseCooper (PWC) lists such white elephant projects as constituting Nigeria’s $900 billion ‘dead assets’. The sad development is that these dead assets are increasing at an astronomical rate.
Financial economist at Nnamdi Azikiwe University, Dr. Felix Echekoba, stated that given the low passenger traffic and the high costs of maintaining these airports, states should consider alternative investments that could yield better economic and social returns. He said building toll express roads that connect state capitals to the nearest functional airports could be a more cost-effective solution. “Such infrastructure would not only improve accessibility but also stimulate economic activities along these routes,” he said.
Industry analyst, Olumide Ohunayo, suggested that the inefficiency of these airports is partly due to the lack of airline operations in these locations. He said encouraging airlines to operate routes connecting hinterland airports could help increase usage. However, this requires a strategic push from regulatory bodies like the Nigeria Civil Aviation Authority (NCAA) to streamline the process of obtaining air operating certificates and to make it less cumbersome and expensive for airlines.
But the bottom-line remains profitability. The regulatory authorities can’t demand that the airlines fly certain routes when they are not viable.
The continued investment in unprofitable airports necessitates a policy and strategic reassessment. Development economist and dean at Adeleke University, Professor Tayo Bello, also noted that state governments need to evaluate the economic benefits of these projects critically and consider whether the funds could be better utilised elsewhere. He said effective planning should involve feasibility studies that take into account the potential passenger traffic, the economic activities in the region, and the overall demand for air travel.
“The money spent on unprofitable projects could have been invested in more beneficial and revenue-generating initiatives. The opportunity cost of these investments means missing out on potential economic growth and improvements in other sectors.
“Unprofitable infrastructure often experiences low usage rates, leading to inefficient use of resources. For example, airports with low passenger traffic may remain underutilised, failing to provide the economic benefits anticipated.
“Unprofitable infrastructure projects consume significant public funds without generating adequate revenue. This financial strain can divert resources from other critical areas such as healthcare, education, and public safety,” he said.
A lecturer at Auchi Polytechnic, Zakari Mohammed, noted that investing in infrastructure that does not meet demand can lead to economic inefficiency. He stressed that it may result in wasted resources and poor return on investment, ultimately affecting the overall economic health of the region.
Mohammed further cited that citizens may become disillusioned with government spending if they perceive investments as wasteful or ineffective as this can erode public trust in government and its ability to manage resources wisely.
“To finance these projects, states may incur debt. The burden of repaying this debt, especially when the projects do not generate sufficient revenue, can strain state budgets and limit financial flexibility,” he said.
Nigeria’s approach to airport construction highlights a significant disconnect between investment and actual economic benefit. With only a small fraction of airports being profitable, it is clear that the current strategy is unsustainable. Redirecting funds towards essential infrastructure and fostering a more integrated transportation network could provide more tangible benefits for the population. As the country forays its economic future, a shift towards more pragmatic and economically viable projects is essential for sustainable development.