Fani-Kayode: Defends Obasanjo on Nigeria Airways Liquidation

• Former Aviation Minister Femi Fani-Kayode defended ex-President Obasanjo's 2004 liquidation of Nigeria Airways.
• Fani-Kayode argued the airline's collapse stemmed from pre-1999 mismanagement and debt, not Obasanjo's actions.
• Minister Festus Keyamo accused the Obasanjo-Atiku administration of leaving thousands of Nigeria Airways workers without pensions.
• President Bola Tinubu's administration recently approved and released N36 billion to settle these outstanding entitlements.
• By 1999, Nigeria Airways, once a national pride with 32 aircraft in 1979, was reduced to one non-functional plane due to corruption.

The settlement of these outstanding benefits, which have caused immense hardship and even loss of life among former employees, highlights the enduring financial and social implications of such corporate insolvencies and the eventual need for state intervention to address historical liabilities.

Femi Fani-Kayode, Nigeria's High Commissioner to South Africa (with concurrent accreditation to Lesotho and Eswatini), who served as Minister of Aviation in 2006, recently took to his X account to defend former President Olusegun Obasanjo concerning the 2004 liquidation of Nigeria Airways. This defense came in response to current Minister of Aviation and Aerospace Development, Festus Keyamo, who had, on Wednesday, criticized former Vice-President Atiku Abubakar. Keyamo's remarks linked the Obasanjo-Atiku administration to the airline's dissolution in September 2004, highlighting the subsequent plight of thousands of workers who lost their jobs and were left without their due pensions and gratuities.

Keyamo's accusation underscored the long-standing issue of unresolved entitlements, noting that many former employees reportedly passed away while awaiting their benefits. He further revealed that President Bola Tinubu has since authorized and disbursed N36 billion to settle these outstanding obligations, with former staff members already receiving payment alerts. Keyamo also accused Atiku of selectively claiming credit for the Obasanjo administration's successes while disavowing its more contentious decisions. Fani-Kayode, however, countered these claims, asserting that it was unjust to attribute the airline's collapse solely to Obasanjo's tenure, arguing its decline predated his return to power.

Fani-Kayode emphasized that the "mess" surrounding Nigeria Airways was firmly established before Obasanjo assumed the presidency again in 1999. He described the situation Obasanjo inherited as a "virtually collapsed airline," leaving the administration with little alternative but to proceed with its liquidation in 2004. The former Aviation Minister recounted that when Obasanjo concluded his term as military Head of State in 1979, Nigeria Airways was a thriving entity, boasting 32 operational aircraft, a cadre of experienced pilots and crew, a highly competent management team, and a responsible board of directors. At that time, the airline was widely regarded as a symbol of national pride.

However, the intervening two decades saw a dramatic deterioration. By the time Obasanjo returned to civilian leadership in 1999, a mere 20 years later, only a single aircraft remained, and even that was non-functional. The vast majority of the fleet and the company's assets had disappeared. Fani-Kayode attributed this precipitous decline between 1979 and 1999 to systemic corruption and gross mismanagement by successive leadership teams and boards. He stressed that the ultimate decision to liquidate the airline was a consequence of its chronic insolvency, complete operational failure, and the futility of various attempts to revive it, including the withdrawal of privatization advice from the International Finance Corporation.

Fani-Kayode firmly defended the Obasanjo administration's decision to cease injecting public funds into the failing airline, stating that the liquidation was a necessary, albeit painful, step. He asserted that Obasanjo "had no choice" in 2004, as there was genuinely "nothing left to save." This was particularly poignant given Obasanjo's personal history of contributing significantly to the airline's development during his time as military Head of State. The subsequent issue of outstanding pensions and gratuities for the thousands of affected workers became a critical and protracted concern following the airline's dissolution.

The recent announcement by Minister Keyamo regarding the N36 billion disbursement by President Tinubu's administration marks a significant step towards finally resolving these long-standing financial obligations. This action underscores the government's ultimate responsibility for the entitlements of employees from state-owned enterprises, even decades after their collapse. The settlement of these outstanding benefits, which have caused immense hardship and even loss of life among former employees, highlights the enduring financial and social implications of such corporate insolvencies and the eventual need for state intervention to address historical liabilities.

Lawyers and compliance officers should note the long-term financial and legal implications of state-owned enterprise liquidations, particularly the government's eventual settlement of long-standing employee entitlements. This case highlights the potential for historical liabilities to resurface and require significant government intervention, setting a precedent for how similar past or future corporate insolvencies involving state entities might be addressed regarding stakeholder compensation.

Source: Original reporting via news article.