More troubles await the Federal Government over the foreign airlines’ blocked $600 million funds in Nigeria as indications have emerged that failure not to defray the accumulated funds urgently may thwart the rights granted Nigeria to host the first ever global conference on tourism, culture and the creative industry in November.
This is just as the National Association of Nigeria Travel Agencies (NANTA), a major stakeholder in the hosting of the global tourism event has vowed to boycott the event should the federal government fails to pay the foreign carriers.
President Muhamadu Buhari had in June this year travelled to Madrid in Spain to sign for the hosting right of the conference at the United Nations World Trade Organization (UNWTO) headquarters.
The president who had expressed the readiness of Nigeria to host the global conference in November in a conducive environment, had described the granting of the hosting rights as a “further proof of Nigeria’s support for the vision of the organization and also an affirmation of the confidence reposed in our country by your organization.”
The promise by Buhari that the global event would provide, yet, another opportunity for the country to showcase its tourism and creative industry to the whole world may not be realized after all following the withholding of the foreign airlines funds in Nigeria and the threats by the airlines to withdraw their services if the federal government fails to release the funds.
The threats made by the airlines became a reality when the UAE based flag carrier, Emirates announced plans to suspend its operations into Nigeria effective September 1st, 2022 until it gets its $85 million trapped funds out of the large chunk of $600 million belonging to the over 27 foreign airlines operating into Nigeria.
Speaking to Saturday Tribune on the controversy and the consequences awaiting the country should the government fail to take urgent intervention,the president of NANTA, Mrs Susan Akporiaye who lamented how the measures so far taken by the airlines to ensure they did not accumulate fresh deficit had already crippled the travel agencies’ business, said her members will not participate at the global conference due to the hardship and economic downturn the owing of the airlines had caused them.
According to Akporiaye; “Do not let us forget that Nigeria is hosting the UNWTO, I wonder how Nigeria is going to host this in November if all the foreign airlines stop flying into Nigeria. Who is going to bring the visitors all over the world into Nigeria knowing what it took us to get that hosting right, it took the president to fly all the way to UNWTO headquarters to sign. So if all the airlines decide to take the advantage and say UNWTO is coming and you refuse to give us our money and they all do what Emirates has done, how then are we going to host UNWTO, how, and that will be a very big embarrassment.
“That’s the reason why I believe very strongly that the promises of the minister of information and culture, Alhaji Lai Mohammed at the Lagos airport last week were not empty promises because the UNWTO is his event and he knows the risk involved, he knows the kind of embarrassment this will bring if this situation does not improve. And if not for anything, we are going to boycott the UNWTO because we are suffering and you want us to come and join you and celebrate what exactly, celebrate our pains, celebrate lack of money, where is even the money to buy tickets and go for UNWTO when local ticket is as high as N200,000 now, we are not making money, then we will buy N200,000 ticket and go for UNWTO. Nobody is in the mood of celebration so if they want that UNWTO to be a success, that’s why I believe the promises he made was not an empty one because he knows the implication. If not we will boycott the UNWTO and they know the implication. We cannot be suffering and be crying out and it seems as if it’s falling on deaf ears. So that’s why I believe Lai Mohammed’s statement is going to hold water and not just empty.”
Akporiaye who confirmed that many Nigerians have now shifted their patronage to neighbouring countries like Ghana and Togo to purchase low fare tickets and fly to other parts of the world, said through this, the travel agencies and Nigeria also is losing huge funds to other countries due to reduction in the sales of tickets.
Besides, the travel and tourism expert had described the crisis generated by the trapped funds as another pandemic starring the travel agencies on the face in view of the drastic reductions and low income generation thrown at them by government’s nonchalant attitude towards the trapped funds.
Her words: “O yes. The fares are just crazy, so passengers would just have to look for opportunities and ways and we are also actually getting our passengers these same opportunities that they don’t have to stress themselves too much, we also have our ways. You know life is all about collaborations and if there is one industry in the entire world that works better with collaboration it’s the aviation sector. So we are all collaborating and trying to see how we can service our passengers better and save them a lot of money.
“What does this mean for the travel agencies in Nigeria, of course low income, reduction of our income because sales are very low, right now it’s practically just the corporate that can afford the prices that we are seeing on the systems because its crazy, so that’s just saying that if there are no sales there is no income, if there is no income, then there is problem. This is another pandemic facing us, it’s as good as we should all stay at home and stop wasting transport money to come to the office so that’s what it’s means for travel agencies in Nigeria. There will be drastic reductions in our sales and of course this should mean reduction in the income. When we are not making money a lot of people suffer and it’s not just the owners of the travel agencies, the staff are also affected and Nigeria as a whole because these tickets even though Nigerians are the ones using the tickets, the income is not coming to the Nigerian government because they are no longer traveling out of Nigeria but out of other African countries so the revenue generated is not coming to the government. So it’s a ripple effect and a terrible situation actually.
“As a matter of fact, a lot of our members have actually scaled down, their staff do not come to office on a daily basis, they scheduled their coming so that everyone does not come the same day so that they can at least save on transport. This is summer when we could have probably given staff some incentives but we can not do this and if this lingers on till December, the usual incentives that staff would have benefitted and gone home with cannot happen. These staff also have those who depend on them just like the owners of the agencies. So no doubt it’s a really very bad situation and according to the minister of information that came the other day to talk, let’s keep our fingers crossed and let’s hope he was not just making empty promises that they are actually seriously looking into the issue.”
Commenting on the the negative effects of Nigerians now trooping the neighbouring countries to buy tickets and travel will have on the economy of Nigeria and the subsequent effect on the hitherto plans to make Lagos airport a hub in the sub region, a one time military commandant of the Lagos airport, Group Captain John Ojikutu, retired, declared: “I have explained it; your earnings in forex which contributes about 80% of our commercial aviation earnings will drop or disappear to Ghana and we shall lose the hub in the region to Europe, US, Middle and Far East, East and South Africa, etc to Ghana.
Ojikutu knocked the federal government and the responsible aviation authorities for not handling the trapped fund issue properly, saying: “The recklessness by which we have been taken intervention funds from the purse of the government did not make us to plan for days like this; first how did we plan to be repatriating the foreign airlines earnings when we signed the Bilateral Air Service Agreements (BASA) with them? How did we come to be giving the foreign airlines multiple destinations outside the BASA without the considerations for the domestic markets and the domestic airlines?
“What was the sense in cancelling the commercial Agreements that are made outside the BASA? What have we been doing with over $1 billion earnings on services provided to the foreign airlines by the private and government services providers? Have we ever considered that these earnings from the foreign airlines alone account for over 80% of our earnings in commercial aviation? These are unilateral decisions that have no government backing and they surely are leading us to losses in earnings to government and the private sectors and further loses with the present administration. “We shall lose earnings on Passengers Service Charge (PSC), landing and parking, navigational charges, ground handling services, cargo service charges, 5% tickets sales charges and cargo sales charges, fuel charges, etc. All these are what our neighbouring countries that may turn to be new hubs in the sub region will be generating from our lack of foresight.”
Ojikutu however called on the aviation authorities to “stop the multiple destinations giving to the foreign airlines but give them multiple frequencies to two airports; Lagos or Abuja and one other airport in the alternative geographical area; they must be forced to have interlining connecting flights with the domestic airlines on domestic routes for their transiting passengers to their local destinations and pay in DOLLARS for the connecting flights. Same too for Cargo. This way, we can generate additional forex from these airlines. Such forex must be domiciled with the CBN where the recurring exchange can be paid for the repatriation of the foreign airlines earnings can be paid or supported.
“Government must call on its agencies that have been collecting forex earnings from these foreign airlines and ships in the maritime services too as well as the private sectors in the two sectors to bring back their forex earnings; where they fail, they must return whatever government has given them in forex transactions in the last 8 years or their certificates of incorporation cancelled. Government must thoroughly investigate such earnings too in its agencies and take appropriate disciplinary action against those who have acted unilaterally to exploit the funds. The country is bleeding and in need of forex blood; we must get it from all those who have sucked it out and not only from Abacha.”
Another travel and tourism expert who said he was not authorized to speak on the issue had blamed the global attention the trapped funds issue is receiving on bad leadership which he said was not only affecting the airlines and the travel agencies alone, but also affecting Nigerian travelers and the entire country.
While saying the only few that were not affected by the reactions of the foreign carriers were those who have private jets, he further took a swipe at the government for not learning from even small Ghana whose government had been able to manage the little resources they have.
According to him, Ghana should not be blamed if despite its size it takes over from Nigeria in aviation saying; “it’s our fault if we had managed our potential well, people will be coming here. We should even thank Ghana for becoming another option for the airlines and the Nigerian traveling public.
“All foreign airlines planning to come to Nigeria now prefer to first go to Ghana because they are tired of Nigeria. If we can no longer sell Nigeria, we sell others. We cooperate with travel agencies in other countries”.
He however attributed the reasons why the airlines stopped selling lower inventory tickets in Nigeria to the obvious fact that by the time the CBN decides to pay the trapped funds that the money value would have lost its value and CBN will not pay interest on the funds.
ALSO READ FROM NIGERIAN TRIBUNE
and then