Forex Crisis: $283m foreign airlines’ funds trapped in Nigeria, says Sirika

…calls for urgent intervention of President Buhari

Nigeria’s Minister for Aviation, Hadi Sirika, has said that the nation’s aviation sector currently suffers a hydra-headed crisis bordering on forex and fuel scarcity that prevents it from raking in revenue potentially generated from air connectivity.

Speaking on Tuesday at the commissioning of the new terminal at the international wing of the Murtala Muhammed Airport, Lagos, the minister said for the industry to gain significant benefits from air connectivity within and outside the country, the government must put strong measures in place to allow airlines access to foreign exchange without hindrance.

According to him, foreign airlines operating in Nigeria have been unable to repatriate $283 million generated from ticket sales back to their home countries due to the scarcity of the Dollar.

It would be recalled that the situation prompted some foreign airlines to cut down their ticket sales on Nigerian routes amid worsening forex scarcity last year.

For instance, British Airways announced last year, towards the festive period, that it would reduce its ticket sale inventory in Nigeria by removing the lower classes from its Global Distribution System.

The development shrank ticket sales to Nigerians by 35 per cent within the period, sources told TW.

The minister expressed worry that the nation is at the risk of losing billions of naira as proceeds generated from visitors’ expenditure if the situation persists.

“It is pertinent to mention that, the stands to gain significant benefits in restoring and maintaining connectivity within, to, and from the country. Analysis from IATA shows that Aviation Sector provides N341bn GDP contribution, 160,000 local jobs created and N535bn expenditure from visitors will be solely generated from restoring and maintaining this connectivity.

“Consequently, Sir, these are the numbers at risk if that connectivity is threatened … Mr. President, aviation business suffers from the issue of access to foreign exchange by local and foreign airlines and the ability to repatriate blocked funds. Nigeria currently holds $283m of foreign airlines funds blocked in the country. I would like to humbly request the support of the Central Bank, through the directive of Mr. President, to prioritize access to forex for all carriers both local and foreign; and to work out a mechanism to clear the existing backlog urgently and prevent subsequent build-up,” said Sirika.

On the scarcity of Jet A-1, which has triggered an increase in prices of tickets on domestic routes, the minister also pleaded with the President to prevail on the Nigerian National Petroleum Corporation (NNPC) to import the commodity in large quantity with a view to sustaining and stabilizing the industry.

“Mr. President is aware of the recent chaos in the sector caused by lack of Jet-A. Flights are unduly delayed and/or canceled unpleasantly. While apologizing to our teaming passengers, I wish to use this medium to humbly request Mr. President to direct NNPC to import Jet-Al in good quantities and devise means to sustain supply as well as directing CBN to allocate Forex for the major marketers to sustain supply,” he said.