Foreign airlines are giving Nigeria a cold shoulder owing to their inability to repatriate revenue realised from ticket sales in the country. A good number have pulled their flights, while others arranged for their tickets to be sold to Nigerian travellers in dollars in an affront to our currency nationalism. But those measures are a comeuppance for scarcity of foreign exchange that has seen this country defaulting on terms of Bilateral Air Services Agreements (BASAs) signed with host countries of the foreign airlines, which provide that revenue from tickets sold in naira be repatriated in forex through the Central Bank of Nigeria (CBN).
Lately, British Airways instructed travel agencies to henceforth sell its tickets to Nigerian travellers in foreign currency. Before now, the airline and others like South African Airways (SAA) had required travellers to buy their tickets online in apparent design to make them pay in dollars, in the wake of the forex crisis that has seen $464million revenue of foreign airlines trapped in Nigeria as at the end of July, according to the International Air Transportation Association (IATA). Other carriers like Emirates Airlines have suspended flights to the Nigerian market. Emirates had announced the suspension of its flights to Nigeria from September 1, but has since recalibrated the policy to restore partial operations.
Last week, the House of Representatives Committee on Aviation asked foreign airlines that had made arrangements to sell their tickets in dollars to discontinue the idea. The panel said the policy imposed enormous pressure on intending travellers and made it difficult for people to travel. Chairman of the committee, Nnolim Nnaji, also urged foreign airlines that had taken steps to stop their operations or cut flight services to Nigeria to reconsider.
The Reps’ advocacy was obviously borne out of nationalistic passion, only that it rings hollow against the backdrop of the difficulty airlines are having repatriating their revenue. Recently IATA bemoaned the mounting obligation, with trapped funds growing from $450million in May to $464million as of July. The body urged government to prioritise allocating forex towards airlines’ revenue repatriation before more damage is done, warning that delay could incur reduced air connectivity on Nigeria. “Airlines can’t be expected to fly if they can’t realise revenue from ticket sales. Loss of connectivity harms the economy, hurts investor confidence and impacts jobs and people’s lives. The government of Nigeria needs to prioritise the release of funds before more damage is done,” the agency said on its official Twitter handle.
Amidst the trapped funds crisis, the CBN recently disbursed $265million of which $230million, according to reports, was direct forex intervention to enable airlines to repatriate some of their revenue while $35million was released through Retail SMIS auction to clear outstanding ticket sales. Aviation stakeholders were, however, reported saying much more was required from government to boost investor confidence and stave off national embarrassment that would arise from boycott by international airlines. Some stakeholders argued that government needs to enter into negotiations with the airlines on its credit worthiness and commitment to fund revenue repatriation in due course, while making deliberate effort to allocate forex at every possible opportunity. “Communication is key, they shouldn’t wait until airlines begin to issue threats,” one aviation expert was quoted in the media saying. Another stakeholder, an executive of the Aviation Round Table (ART), noted that trapped funds contravened the BASAs signed with host countries of the airlines. “Other nations will think twice before signing such agreement with Nigeria. We all know there is economic lull across the globe, but it is worrisome when government lacks the political will to show itself as credit-worthy or when it fails to communicate with its stakeholders,” the ART chieftain was reported saying.
We cannot have foreign airlines selling tickets to Nigerians in dollars, especially when it is unlikely any of the airlines’ host countries would have transactions conducted on their soil in foreign currency and in pointed neglect of the local currency. That very idea affronts on our national sovereignty. But we must also acknowledge that businesses are run for revenue to be realised and utilised, hence everything possible must be done to enable foreign airlines to repatriate their proceeds.
Besides, agreements are signed to be honoured, and Nigeria can’t afford to have its national credibility undone by the failure to fulfil terms prescribed in the BASAs with airlines’ host countries. It is not lost on anyone that times are uncommonly hard, but the test of integrity is to honour obligations even in the most dire of circumstances. This is what government must rise up to..