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Foreign Airlines’ Blocked Funds In Nigeria Hit $743m — IATA

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The International Air Transport Association (IATA) says foreign airlines’ revenue blocked from repatriation by the Nigerian government has increased to $743 million from $662m in January 2023.

The association disclosed this on Tuesday in a letter addressed to Hadi Sirika, minister of aviation, and signed by Samson Fatokun, the association’s area manager West and Central Africa.

The air transport group and the global airline community wrote to the federal government, seeking a special invention for the resolution of airlines’ blocked funds in the country.

“For over a year, Nigeria has been the country with the highest amount of airline-blocked funds in the world. Please find attached the comparative table of airlines’ blocked funds by country,” the letter reads.

“Moreover, as of January 2023, airlines’ blocked funds in Nigeria have increased to $743,721,092 from $662m in January 2023 and $549m in December 2022.”

Since the amount increased from $450 million in May 2022, to $464 million in July the same year, the trapped funds have been linked to some of the challenges in Nigeria’s aviation sector with far-reaching effects.

In attempts to recover its revenue last year, Emirates Airlines suspended flight operations to Nigeria, but later resumed passenger scheduled flights in December 2022.

In a similar move, British Airways (BA) closed inventory on Nigeria in the global distribution system (GDS) — an act that prevented local travel agencies from making bookings from their portals.

Following several meetings by the authorities aimed at addressing the impasse, the Central Bank of Nigeria (CBN) released the sum of $265 million to foreign airlines operating in the country to settle outstanding ticket sales.

But the problem is yet to be fully resolved.

Susan Akporiaye, national president, of the National Association of Nigeria Travel Agencies (NANTA) asked the federal government to proffer solutions to the challenges of airfare profiteering in the aviation sector.

She said the face-off with foreign airlines has affected travel agents’ businesses in several ways as the airlines blame the hike in airfare on their trapped funds.

Negative Effects On Investment

Speaking in the letter on Tuesday, IATA said the increasing backlog of international airlines’ blocked funds in Nigeria sends a strong message against foreign direct investment (FDI) in Nigeria.

“Potential investors are reading from the plight of the airlines that they would not be able to repatriate their funds from Nigeria, even at this moment when Nigeria is expecting investments in the concession of some of its prominent airports,” the group said.

“Foreign airlines fly into Nigeria within the legal framework of the bilateral air service agreement (BASA) signed between their countries and the Federal Republic of Nigeria. It is agreed in those BASAs that Nigeria will facilitate repatriation of the funds of the other party’s airline. Nigeria flaunts this contractual obligation by not facilitating enough the repatriation of airlines’ funds.”

Reduced Connectivity, Job Loss And High-Ticket Prices

According to the association, to mitigate the increasing backlog of their funds in Nigeria and its impact on their cash flow, some airlines have had to reduce the number of their frequencies, or the number of seats made available for sale in the Nigerian market.

This mitigation measure, IATA explains, reduces person and cargo access to Nigeria.

“E-commerce that relies on aviation for speedy delivery will be impacted in Nigeria. Moreover, going by the law of demand and supply, the reduction of airline inventories in the Nigerian market will lead to ticket fare increase which will further burden average Nigerians and take air travel away from the reach many Nigerians,” it said.

“The downstream sector [of] the aviation industry (travel agencies, freight forwarders, ground handling companies) relies heavily on airlines capacity to grow or remain in business. Should the airlines be compelled to further reduce their capacity, those businesses would be negatively impacted, leading to job losses. The negative indirect impact will also affect ground transportation (taxi, car hire), hotels and restaurants output.”

IATA, therefore, appealed to Sirika to ensure that the airlines’ blocked funds “are  totally cleared before your administration leaves office”.

BIG STORY

UBA Takes Centre Stage At 2024 ECOWAS Mining Forum In Cotonou, Benin As Elumelu Gives Keynote Address

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Africa’s Global Bank, United Bank for Africa (UBA) Plc, has been announced as the official sponsor of the 4th edition of the ECOWAS Mining and Petroleum Forum (ECOMOF 2024) scheduled to take place at the Palais des Congrès in Cotonou, Benin from February 22 to February 24, 2024.

The regional event is expected to see a large gathering of key players and stakeholders in the mining and petroleum sectors of the Economic Community of West African States (ECOWAS) and as the financial institution of choice, with presence in 20 African countries and active involvement in major continental development projects, UBA is the preferred partner for the event, underlining the bank’s commitment to the growth of mining and Petroleum industry in the sub-region but to the whole not African economic development.

UBA Group Chairman, Tony Elumelu, would give the keynote address during the opening ceremony of this all-important event.

Elumelu who doubles as Chairman of Transcorp Group, with extensive interests in energy and power, will be speaking on the theme: “Geo-extractive Resources and Technologies: what pooling strategies for Value Creation in West Africa”

His speech is expected to highlight UBA’s increasing effort to support and develop the African continent through strategic investments in the key sectors of mining and petroleum.

Under the esteemed leadership of the President of the Republic of Benin, His Excellency, Patrice Talon, and the President of the Federal Republic of Nigeria and current President of ECOWAS, His Excellency Mr. Bola Tinubu, UBA Group will at the forum aim to restate its commitment towards supporting economic and social development across the continent.

The focus of ECOMOF 2024 underscores the significance of transforming the mining and oil sectors into economic pillars by formulating attractive policies for investors, essential for the sectors’ substantial contribution to the Gross Domestic Products (GDP) of ECOWAS member states.

The Transnational Corporation Group (Transcorp Plc) – a diversified conglomerate with strategic investments in various sectors, including power and energy – will also actively participate in the forum.

Key officials from UBA Group and Transcorp Plc, including the Chief Executive Officer UBA Africa, Abiola Bawuah; UBA’s Group Head, Corporate and Energy Bank, Ebele Ogbue, and President/ Chief Executive Officer, Transcorp Group, Owen Omogiafo will be actively involved in discussions and panels on the sidelines of the event.

Anticipated to attract over 2,000 participants from diverse sectors, including representatives from mining and oil industries, government officials, international and national investors, industry experts, ECOWAS delegates, and international organizations, ECOMOF 2024 promises to be a significant platform for collaborative dialogue and partnership building.

United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees’ group wide and serving over 35 million customers globally. Operating in 20 African countries and in the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting edge technology.

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JUST IN: FG Working To Reduce Rising Food Prices Inherited From Past Government — Finance Minister Wale Edun

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Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, said that President Bola Tinubu’s administration inherited a surge in food and general commodity prices from the previous government.

He, however emphasized the government’s commitment to reducing food prices and tackling the nation’s high inflation rate.

Speaking at the Public Wealth Management Conference in Abuja on Tuesday, February 20, the finance minister acknowledged the hardships faced by Nigerians and outlined measures taken to alleviate their suffering.

He revealed that, as part of these interventions, the government has released 42,000 metric tons of grains, with an additional 60,000 metric tons scheduled for release soon.

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JUST IN: State Police Bill Passes Second Reading At House Of Representatives

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A bill proposing the establishment state police has passed second reading at the house of representatives.

Sponsored by Benjamin Kalu, deputy speaker of the house, and 14 others, the bill proposes to transfer the term “police” in the 1999 constitution from the exclusive legislative list to the concurrent legislative list.

The bill, which comprises 18 clauses, seeks to amend sections 34, 35, 39, 42, 84, 89, 129 153, 197, 214, 215 and 216 of the constitution.

 

More to come…

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