Distinguished shareholders, esteemed friends of NAHCO, members of the Board of Directors, our Regulators, Gentlemen of the press, ladies and gentlemen, I am delighted to welcome you to the 35th Annual General Meeting of our Company, the Nigerian Aviation Handling Company Plc.
All praises belong to The Almighty God. We thank Him for giving us the grace to lead the Company and navigate its affairs at this difficult time.
2015 was one of the most difficult years in recent history of Nigeria's business operating environment, which is a reflection of the global challenges facing major economies of the world including China, Europe and majority of the emerging markets.
We congratulate Nigerians for the successful and peaceful conclusion of the 2015 general election, which ushered in a new government headed by President Muhammadu Buhari; this peaceful transition strengthens and deepens democratic ethos and culture in Nigeria and has become a bench mark fora lot of countries.
Overview of the Global and the Nigerian Economy
2015 was a difficult year in several respects. "Africa rising" and Nigeria's recent yearly Gross Domestic Product GDP growth were both significantly interrupted by the global crash in commodity prices, the lack of foreign exchange buffer, lack of effective consistent response and strategy all combined to impact on the performance of our economy. The key indicators such as the GDP, declined from 6% in 2014 to 2.3% in 2015, inflation increased from 9% to 11%.
The Naira exchange rate depreciated significantly in both the official and autonomous markets, while interest rate and unemployment continue to rise to levels that have become unsustainable. At the sectorial level, nearly all the sectors of the economy including energy and electricity, agriculture, construction, manufacturing etc. suffered a shock and the lull was exercibated in the first quarter of 2016.
The Aviation industry, which was projected by IATA to grow at nearly 7% in 2015, suffered a significant decline, in both passenger load and cargo volume across the world including Nigeria. The Nigerian Stock Exchange also witnessed significant decline in its all share price index becoming the worst performing Exchange in Africa in 2015. It is against this background that our company NAHCO operated hence, our stable performance.
In 2015, NAHCO maintained relative stability in its performance and operations. We handled a total of 39,699 flights compared to 35,557 flights handled in 2014. This is an improvement of 11%. However, this increase was made possible by domestic operation (non core) and the opening of the Owerri Station, which grew 564%; and Enugu flights, which increased by 218% within a short period. NAHCO, in 2015 commissioned the Enugu Cargo warehouse, which we believe would go a long way in opening the South Eastern regional economy to the rest of the world and enable Enugu to handle international cargo and enjoy international passenger services.
The total number of international passengers handled by NAHCO however decreased from 3,311,024 to 3,099,101 passengers impacting negatively on airline load and yield factors. Cargo volumes also decreased from 106 million kg down to 85 million kg, a major decrease of nearly 20% compared to 2014 reflecting reduced import for cargo volumes generally across the country due to consistent depreciation of the Naira and restriction of imports by the Federal Government. In 2015, the Federal Government banned 41 items from accessing the FOREX market for imports. This policy shift will impact trade and cargo import volumes in the medium term.
(Download full statement)