International Aircraft Leasing companies are not currently addressing the West and Central African market. Taking into account the projected expected overall growth in the demand for aircraft and the problem of aircraft leasing and high insurance premium charges to Nigerian airlines, it is the desire of the Federal Government that the proposed Aviation Leasing Company (ALC) in Nigeria becomes a hub serving the leasing demands of domestic and regional airlines; bearing in mind following key objectives: 
1) Alleviate the challenges of aircraft leasing by Nigerian and African airlines 
2) Limiting Capital Flight 
3) Improved airline operating fleets in Nigeria and Africa 
4) Improved Foreign Investment 
5) Enhanced knowledge transfer to Nigerians 
6) Contribution to the development of the aviation sector 
 

The Federal Government of Nigeria, through the Federal Ministry of Transportation (Aviation) is keen to provide a framework for the establishment of an Aviation Leasing Company (ALC) which can also be referred to as an African Leasing Company (ALC). To this end, the Federal Government seeks to partner with a private partner consortium in a Joint Venture, with the Government owning a minority stake which will be supported by Government guarantee for either the aircraft or lease payments. 
Government Incentives:
The Federal Government is willing to provide incentives to support the ALC, some of which are: 
• Establishment of Free Zone at the airports which qualifies the ALC for the following: 
o Stamp Duty exemption 
o 0% Value Added Tax 
o 0% Withholding Tax 
o Custom Duty and Import Tax waivers on aircraft and spares 
• Availability of FOREX and futures support 
• Granting of pioneer status 

The ALC will provide leasing opportunities for African airlines in order to boost fleet size, alleviate the problem of aircraft leasing and play a significant role in modernizing the aircraft fleet in Africa.

The proposed ALC is aimed at providing an opportunity for local leases for aircraft to both domestic and international carriers, and to facilitate the ease of doing business for foreign lessors with Nigerian domestic airlines being a one-stop shop.
In view of fact that aircraft acquisition is an expensive proposition and very few airlines can afford to pay upfront for all their fleet. Airlines use export credit agencies, leasing companies, commercial banks, and engine manufacturers to buy their aircrafts from aircraft manufacturers. Leasing companies provide secured lending, operations leasing and finance leasing facilities. In Africa generally, most airlines are small with the challenge of inadequate funding to purchase aircrafts, therefore, aircraft leasing would be the sustainable choice for Africa. It has been estimated that about 70% of commercial aircraft in Nigeria are leased, as very few airlines can afford to pay upfront for all their fleet.
The project OBC recommends the establishment of the ALC as a Joint Venture (JV) between the Federal Government and the Private sector with the Government owning a minority stake which will be supported by Government guarantee for either the aircraft or lease payments to International lessors.
The OBC’s proposed structure recommends the establishment of the ALC by bringing together international lessors, financial institutions, local and international investors to form a company that will become an African arm or subsidiary of an international lessor. The role of the ALC will be to lease aircraft to African airlines and mitigate the risks that limit international lessors from leasing to Africa. In this option the ALC will not own the aircraft but will have access to aircraft owned by the international lessors.