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‘You Are Demarketing Nigeria’- IATA Warns FG

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The International Air Transport Association, (IATA), has stated that the current delay in the release of over $464million owned by foreign airlines, trapped in the Central Bank of Nigeria (CBN), is negatively impacting on Nigeria’s image.

In a recent statement, the regional vice president, Africa and Middle East, Kamil Alawadhi, said IATA is disappointed that the amount of airline money blocked from repatriation by the Nigerian government grew to $464 million in July.

According to him, government should release the trapped fund before more damage to the country’s image is done.
IATA is warning that failure to restore timely repatriation of airlines’ income will hurt Nigeria with reduced air connectivity, as airlines cannot be expected to fly in regularly if they cannot evacuate their revenue from ticket sales. IATA also pointed that loss of air connectivity will bring much harm to the local economy, hurts investors’ confidence, affect jobs and people’s livelihoods.

Still on the same issue, Aviation Safety Round Table Initiative (ARTI), is urging the CBN to ensure a prompt release of the foreign airlines’ trapped fund.

In a statement signed by the association secretary general, Olumide Ohunayo, the body said ”ARTI is dismayed by the appalling handling of the accumulated foreign airline funds trapped in our banks, due to the non-allocation of forex to these airlines. In all Bilateral Air Services Agreement (BASA), an Article in the agreement — transfer of earnings, clearly states that ‘each designated airline shall have the right to convert and remit to its country on demand, local revenues in excess of sums locally disbursed. Conversion and remittance shall be permitted without delay in accordance with the prevailing foreign exchange regulations.’”

”International trade is bound by agreements which are sacrosanct and must be respected. Nigeria cannot do otherwise if we crave the attention of investors in our industry. It’s important to state that foreign airlines sold these tickets at the official IATA rate and cannot be expected to go the parallel market to source, convert and remit as opined in some quarters, the central bank should do the needful as enshrined in the BASA agreements. These funds should have been remitted at the official rate on date of Sale immediately the Airlines get clearance after paying all the local obligations including taxes.”

Industry noted further that the action of government on the matter has affected the country’s image as a country that is not investment friendly.

”The damage that our action has done to the Nigerian image as an investment friendly nation is far reaching, while the citizenry is faced with high fares, reduced capacity and limited travelling options, which will worsen if we continue on this trajectory. We found ourselves in this unenviable situation because we lack capacity to compete, which would have reduced the remittance volume.
It is reported that the Blocked funds belonging to these airlines have risen to about 600 million dollars as the CBN had not been able to make the dollar available for the carriers to repatriate.

It is strongly speculated that foreign airlines operating into Nigeria have concluded plans to blacklist the country should the Federal Government fail to remit their over $600 million trapped in the Central Bank of Nigeria in the next four months.

They are planning to shift operations to neighbouring countries like Ghana and Benin Republic. This means most Nigerians will soon be flying out to Europe and America from neighbouring countries.

With the increase in dollar rate leading to rising in flight ticket prices, especially en-route America and Dubai, which is now over a million naira, the economic environment of the country is really getting very hostile for businesses to thrive.

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