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Trapped Funds: IATA Warns Federal Government, Says Some Foreign Airlines May Quit Nigeria

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The International Air Transport Association has cautioned the Central Bank of Nigeria that if nothing is done to address the $790 million in ticket income that is now stranded in the country, some foreign airlines may be compelled to exit Nigerian markets.

At a media presentation with African journalists at the IATA Global Media Day in Geneva, Switzerland, on Thursday, Kamil Alawadhi, Regional Vice President, Africa & Middle East, also said Lagos and Abuja airports had been ranked the most expensive gateways in the region despite the poor state of their infrastructure.

According to him, the Nigerian government now has the most airline-trapped funds.

On blocked funds, the IATA VP listed Nigeria as the country with the highest amount of airlines’ blocked funds at $792m followed by Egypt ($348m); Algeria ($199m); AFI zone ($183m) and Ethiopia $128mn.

While Ethiopia has mapped out a strategy to defray the debt, he said that Nigeria had yet to do anything on its own.

Al-Awadhi said, “Ethiopia is seeking a way to resolve this issue even though the blocked fund is rising. The first step for us to solve these blocked funds is for both parties to engage. If parties don’t engage, it is very difficult to move forward. I have not been able to engage with Nigeria’s CBN Governor. He said he would engage with me when he had a solution. He is not promising but I have engaged with the Aviation Minister who is very understanding, new to the position, or maybe wowed by the situation he inherited will help to resolve the matter.”

“The airlines in Africa are owed $34 million. That $34 million is blocked. Depreciation has set in on the money. They have already lost $10 million because of depreciation. That is not fair for the airlines because they have paid all the dues to the operators of the airports. Every due has been paid for. They carry Nigerian officials on these flights and they can’t get their money.

On the state of aviation in Nigeria, the IATA boos said with 25 per cent interest on loans, high airport taxes and insurance premiums which it said was six times more than anywhere in the world, it would be difficult for Nigerian airlines to make profit.

According to Al-Awadhi, any airline in Nigeria operating outside of Nigeria has a cheaper operating cost and better prices than Nigerian airlines.

He said, “Every airline has its challenges and it depends on where it operates. To answer this question, I will use Nigeria as an example. Nigeria has two most expensive airports; their fuel is higher than elsewhere in the world, and insurance is six times more expensive than anywhere else in the world.”

“The interest on loans is 25%. It is ridiculous. It is the highest interest I have ever seen. When you set up these airlines, you are already disadvantaged. Any airline in Nigeria operating outside of Nigeria has a cheaper operating cost and better prices than Nigerian airlines. You can see why it is difficult for African airlines to make profit.

He added, “IATA is identifying why these costs are high and we are trying to tackle them one by one by seeing how they can reduce the costs. We are expecting that the operating costs of the African airlines will be lowered and they can become profitable”, said Al-Awadhi.

IATA is identifying why these costs are high and we are trying to tackle them one by one by seeing how they can reduce the costs, hoping that the operating costs of the African airlines will be lowered and they can become profitable. “

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UPDATE: Uncover Negligence, Deliberate Actions Behind Ibadan Stampede — Tinubu To Security Agencies

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President Bola Ahmed Tinubu has ordered an investigation into the incident at the children’s funfair in Ibadan, which resulted in the death of 35 persons.

In a statement issued on Thursday by Bayo Onanuga, his special adviser on information and strategy, the president called for a “thorough” inquiry to determine whether negligence or deliberate actions contributed to the stampede.

“In this moment of mourning, President Tinubu stands in solidarity with the affected families and offers prayers that the Almighty God will grant peace to the souls of those who have departed in this unfortunate event,” the statement reads.

“President Tinubu has urgently directed the relevant authorities to investigate the circumstances of this tragedy thoroughly. He emphasises that it is imperative to determine whether negligence or deliberate actions contributed to this painful incident, ensuring a transparent and accountable process.”

“The President urges the Oyo State Government to take every necessary measure to prevent such a tragedy from reoccurring.

“Among the essential actions are a comprehensive review of all public events’ safety measures, strict enforcement of safety regulations, and regular safety audits of event venues.”

The president also called on event organisers to prioritise the safety of all attendees, especially children.

He noted the importance of integrating professional security, protocol, and logistics at events to ensure the safety of all participants.

“Our children’s safety and well-being remain paramount. No event should ever compromise their safety or take precedence over their lives,” he added.

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BIG STORY

2025 Budget Proposal Scales Second Reading At National Assembly

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The 2025 appropriation bill has passed the second reading at the national assembly.

The budget cleared the second reading during plenary on Thursday following an extensive debate by legislators in the Senate and the House of Representatives.

On Wednesday, President Bola Tinubu presented a record N49.7 trillion as the proposed budget for 2025 to a joint session of the upper and lower legislative chambers.

The lawmakers, during plenary on Thursday, took turns discussing the general principles of the money bill, offering recommendations that included thorough scrutiny of the budget breakdown during engagements with heads of ministries, departments, and agencies (MDAs).

Leading the debate, Julius Ihonvbere, majority leader of the green chamber, said the budget would improve the nation’s economy and consolidate the achievements of the president.

In his debate, Kingsley Chinda, minority leader, said Tinubu’s assertion that the budget would reduce inflation from the current 34.6 percent to 15 percent is “ambitious” and not realistic.

The ranking lawmaker said the allocation of N4.91 trillion to defence and security “will not take us to the promised land.”

He added that the budget should also prioritize human capital development and environmental sustainability.

“The budget might appear very beautiful, but there is much more for us to do as a nation,” Chinda said.

‘2025 BUDGET IS INADEQUATE’

Oluwole Oke, a Peoples Democratic Party (PDP) member from Osun, stated that the budget is “grossly inadequate” and won’t sufficiently fund development projects.

Abdussamad Dasuki from Sokoto supported Oke’s position, describing the budget as inadequate.

“The budget may look robust on paper, but if you convert it to dollars, you will realize that the budget is not where we should be,” he said.

“With the challenges we have, if you convert it to dollars, the nation will be inadequately provided for. I urge the relevant committees, particularly the committee on finance, to work on this.”

Also speaking, Ismaila Dabo from Bauchi called for an increased allocation to the agricultural sector to boost food production.

“Inflation is on food items, and Nigerians are finding it difficult to cope. I urge the house to do everything possible to ensure enough allocation is reserved for agriculture,” he said.

Some lawmakers from the north-east and south-east geopolitical zones demanded more funding for their development commissions.

The lawmakers unanimously voted in support of the bill when it was put to a voice vote by Benjamin Kalu, the deputy speaker, who presided over the session.

Kalu referred the bill to the committees on appropriation for further legislative work.

He said the bill will be passed before January 30.

In November, both chambers approved the 2025-2027 medium-term expenditure framework (MTEF) and fiscal strategy paper (FSP) of the federal government.

The parliament passed the oil benchmark prices of $75, $76.2, and $75.3 for the daily crude oil production of 2.06 million, 2.10 million, and 2.35 million for the 2025-2027 fiscal years respectively.

Also, the national assembly maintained the gross domestic product (GDP) growth rate projected at 4.6 percent, 4.4 percent, and 5.5 percent for the three years in the fiscal strategy paper.

The lawmakers endorsed the projected exchange rate of N1,400/$ but said it is subject to review in early 2025 according to monetary and fiscal policies.

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JUST IN: Ooni’s Ex-Wife Naomi, 7 Others Arrested Over Children’s Funfair Stampede In Ibadan

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The Oyo State Police Command has announced the arrest of the ex-queen of the Ooni of Ife, “Naomi Silekunola”; the Principal of Islamic High School, Ibadan, “Fasasi Abdulahi”; and six others in connection with the deaths of several children during a stampede at a funfair in Ibadan, the state capital, on Wednesday.

The ex-queen was identified as the primary sponsor of the event.

Furthermore, the number of children who have died from the stampede has increased to 35, while six others are critically injured, according to a statement issued on Thursday by the State Police Public Relations Officer, “Adewale Osifeso.”

The event, which was held at the Islamic High School, Basorun, Ibadan, was intended for 5,000 children, but reportedly over 7,500 attended.

 

More to come…

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