3Views 0Comments
Nigeria Approves Budget with New Payments for JF-17 fighters
On 20 June 2018, Nigeria’s President Muhammadu Buhari signed the country’s next fiscal budget – i.e. the 2018 Appropriation Bill of the Federal Government of Nigeria – into law.[1] Not only did the final budget retain the $35 million US installment allocated for three JF-17 Thunder multi-role fighters – to be procured from Pakistan Aeronautical Complex (PAC) – but the revised budget added another $47 million US for the Nigerian Air Force (NAF) JF-17 program.[2] With Nigeria previously allocating $14 million US for JF-17s in its 2016 budget, it appears that the country will complete its payments to PAC by the end of 2018.
Not only does the allocation firmly settle that the NAF is to be a JF-17 user, but with its payments done, it should be on track to begin inducting these aircraft. Currently, the workhorse of Nigeria’s combat aircraft fleet is the F-7NI (i.e. a version of the F-7MG), a platform the JF-17 was designed to affordably supplant.
The NAF is also taking delivery of Russian Helicopters’ Mi-35M assault helicopter. As of April 2018, Nigeria has taken delivery of a total of four Mi-35Ms out of a total order of 12 helicopters.[3] The NAF is also waiting for the delivery of 10 Sierra Nevada A-29 Super Tucano close air support (CAS) aircraft, a deal for which it had inked at the beginning of January 2018.[4] Of Nigeria’s marquee programs, the JF-17 is the smallest one in terms of its current value and quantitative scope. This is surprising seeing that it is a fast-jet program.
However, speaking to Quwa in January, retired Pakistan Air Force (PAF) Air Commodore – and today, historian and analyst – Kaiser Tufail outlined that the NAF’s relatively modest purchase is likely a prelude to a long-term, gradual fleet build-up. Basically, the first three aircraft will enable the NAF to acclimate to the JF-17, be it in terms of its maintenance training or its pilots. In addition, small batch purchases such as this can readily be absorbed into Nigeria’s fiscal budget without forcing the country into a loan.
JF-17 Export Efforts: Negotiating Expectations
Despite attaching the importance of exporting the Thunder in its narratives, commercial endeavours (in regards to the JF-17) have not been a priority of the PAF… | Read More
Additionally, one should examine the situation from PAC’s perspective as a soon-to-be original equipment manufacturer (OEM) for a fighter aircraft. In fact, the NAF JF-17 program would be PAC’s first project as a fast-jet OEM. Granted, PAC has been involved – as a result of its workshare agreement with the Aviation Industry of China (AVIC) – in supplying subassemblies for Myanmar’s FC-1 order, but that appears to be a program led by AVIC. It would not be surprising if PAC itself prefers a smaller batch order (for a start) as a relatively low-risk means to build expertise as a fast-jet OEM.
Prior to the NAF JF-17 program, PAC had built its reputation on exporting the Super Mushshak basic trainer to numerous countries in the Arabian Peninsula, Sub Saharan Africa and the Middle East. Nigeria is among the latest Super Mushshak customers (alongside Turkey and Qatar) with 10 aircraft, which PAC delivered as of January of this year.[5] Though entirely different in technical complexity, scope and value to the JF-17, the Super Mushshak did provide the PAC a number of relevant lessons.
Like the JF-17, the Super Mushshak involves a mix of inputs comprising of local manufacturing work and third-party critical systems, such as the engine, propeller and avionics sourced from Lycoming, Hartzel as well as Garmin and Dynon, respectively. In this respect, awareness and processes will have been built at PAC to ensure that the appropriate export permits (for third-party transfers) are acquired, especially in light of the product’s lifecycle (so as to guarantee maintenance and support).
In parallel to the Super Mushshak, PAC had also been involved in the K-8 Karakorum jet trainer, which was the first aviation joint-venture between PAC and AVIC. However, it appears that the K-8 program – at least from PAC’s vantage point – involved supplying sub-assemblies (much like the Myanmar FC-1) than actually managing an aircraft export project. Nonetheless, the Super Mushshak and K-8 demonstrate that the PAC had actually developed some measure of exposure to aircraft supply-chain work and project support.
However, one should not downplay the technical complexity of exporting and supporting a fully-fledged fighter aircraft platform such as the JF-17. Firstly, unlike the Super Mushshak, most of the inputs involved with the Thunder are inherently restricted or controlled, thus the issue of licensing for third-parties might be more taxing than those involved for the Super Mushshak. In fact, not only is there an issue of controls from a foreign relations standpoint (e.g. some countries might not prefer being linked to Nigeria), but PAC could also have to deal with the conflicting commercial interests of its input-partners.
For example, Russia’s United Aircraft Corporation (UAC) could raise an issue regarding Klimov’s export of the RD-93 turbofan engine. After all, Nigeria is one of Russia’s aviation export markets, so it follows that Moscow would have an interest in reinforcing UAC’s prospects – be it through the MiG-35 or the Flanker-series – by not granting PAC permission to re-export RD-93-equipped JF-17s. However, PAC managed to (be it out of Moscow’s indifference, support and/or unwillingness to deal with Beijing-backed AVIC) secure a transfer to Nigeria, which is a significant aspect to have run in PAC’s favour.
Besides production, flight testing and qualifications – all of which must be stringent so as to remove risks of an accident in Nigeria – PAC must also gear its processes for after-sale maintenance and support. Yes, there is a potential opportunity for overhauling and supplying spare parts, but it must establish a precisely-calibrated supply chain linking production (including external production) to delivery.
This is where a forthcoming Structural Health Management/Damage Tolerance Analysis (SHM/DTA) suite, which is being procured from Portugal’s Critical Materials, could be a factor.[6] Critical Materials’ PRODDIA SHM/DTA suite was designed to generate “key information on the structural condition of aircraft to OEM decision makers. With in-service visibility of structural integrity at fleet, system and component level, [the PRODDIA AERO] increases availability and reduces OEM costs.”
The PRODDIA SHM/DTA suite also requires hardware-level sensors (to evaluate the aircraft in question), but it is evidently a method to perfect the linkage between the production and delivery of parts. However, PAC could need to potentially design the maintenance set-up in Nigeria to accommodate for this as well as other elements, thus adding to the technical complexity of the program. Thus, PAC has an incentive to keep the initial delivery to Nigeria relatively small and, in time, push and accommodate for expansion in alignment with both its production capacity and internal competencies.
Failure to execute in Nigeria could jeopardize PAC’s efforts to export not just the JF-17, but possibly future aircraft platforms as well. For example, during the 2017 Dubai Air Show, a PAC official reportedly outlined plans for developing and manufacturing a 10-30-seat commercial airliner.[7] Yes, there is a domestic angle in terms of fulfilling local airliner demand (notably in the hot-and-high areas and unprepared airfields that form the Northern Areas), but exports “in the Middle East and Central Asia” are also of interest.[8]
Likewise, Project Azm’s next-generation fighter (NGF) – if successfully developed – could make PAC truly one of the few OEMs in the world to have a much-coveted solution. Exporting NGFs would allow Pakistan to scale its research and development (R&D) overhead, thus bringing the cost of each fighter closer to the cost of manufacturing and its inputs. Given Pakistan’s foreign relations realities (of not having particularly strong relations with the US or Western Europe), Project Azm would be among a scarcely few aircraft with minimal – if any – critical Western subsystems in play to restrict exports to developing world states.
However in the near-term, success with Nigeria (of lack thereof) could impact efforts to market the JF-17 to other markets, notably Azerbaijan, which reportedly (at least in 2016) rekindled its interest in the JF-17. Furthermore, a successful case in Nigeria (along with the NAF expanding its fleet) could draw interest from other countries, including those that had walked away from the JF-17 at first, such as Argentina.
Granted, there were severe fiscal restraints, but a successful export case with measurable outcomes will offer PAC additional substance in any re-approach. For example, it has shown (in Nigeria’s case) an ability and willingness to stage the end-user’s induction phase through small batches which can be paid through comparatively low-cost (e.g. $20-80 m) annual installments. Yes, the induction period would be long, but if staged in alignment with the PAF’s order-run, PAC would not run the risk under-utilizing its production line (i.e. under-capacity). Today, big-ticket fighter sales are done through major cash payments or credit, so PAC demonstrating an alternative suitable for fiscally-sensitive countries could be an advantage.
Overall, the NAF’s JF-17 program is certain to expand, if not to at least supplant its F-7s through the long-term. It will be interesting to see if PAC essentially aligns the export catalogue with its current PAF run – (i.e. once the Block-III enters production, would the NAF – and others – only have access to the Block-III?). In any case, the Nigeria JF-17 project is a commercial watershed moment for PAC, marking its first active foray as a fighter OEM (and among a relative few to have a new program in Sub-Saharan Africa).
[1] “Federal Government of Nigeria’s 2018 Budget.” Deloitte Nigeria. June 2018. URL: http://blog.deloitte.com.ng/wp-content/uploads/2018/06/Newsletter-2-2018-Budget-002.pdf (Last Accessed: 11 July 2018).
[2] “2018 Appropriation Bill. Budget Office of the Federal Republic of Nigeria. URL: http://www.budgetoffice.gov.ng/index.php/2018-approved-budget-details?task=document.viewdoc&id=681 (Last Accessed: 11 July 2018).
[3] Goodness Adaoyiche. “NAF takes delivery of MI-35M helicopter gunships.” Pulse. 30 April 2018. URL: https://www.pulse.ng/news/local/naf-takes-delivery-of-mi-35m-helicopter-gunships-id8324106.html (Last Accessed: 10 July 2018).
[4] “Nigeria Senate Sees Alarming Rise of Human Rights Violations.” Bloomberg. 11 July 2018. URL: https://www.bloomberg.com/news/articles/2018-07-11/nigerian-senate-sees-alarming-rise-of-human-rights-violations (Last Accessed: 11 July 2018).
[5] Olatokunbo Adesanya. “NAF Receives Brand New Trainer Aircraft.” PR Nigeria. 14 January 2017. URL: https://prnigeria.com/2018/01/14/naf-receives-new-trainer-aircraft/ (Last Accessed: 11 July 2018).
[6] “Critical Materials Selected by Pakistan Aeronautical Complex to Deliver Advanced DTA/SHM Technologies.” Critical Materials. 22 June 2017. URL: http://www.critical-materials.com/en/media/short-news/posts/short-news-1/critical-materials-selected-by-pakistan-aeronautical-complex#.W0mUQdJKiUl (Last Accessed: 11 July 2018).
[7] Waheed Abbas. “Pakistan to soon start producing commercial aircraft.” Khaleej Times. 14 November 2017. URL: https://www.khaleejtimes.com/business/aviation/pakistan-to-soon-start-producing-commercial-aircraft-in-kamra-official (Last Accessed: 11 July 2018).
[8] Ibid.
