Dr Gabriel Olowo, the President of Sabre Central and West Africa, in this interview with SHOLA ADEKOLA, speaks on trending issues affecting the aviation sector, including the foreign exchange unification policy of the government, its effects on businesses and the Nigeria Air project, among others.
What is your opinion on the unification of the exchange rates by the government?
Personally, I think it is a step in the right direction. We need to merge our rates so that we don’t have black, white, red, concessioned, favourites and presidential market rates. But, even with the singular rate, if you don’t remit the foreign airlines’ ticket sales funds to them after two weeks or maximum of one month when it falls due, it will begin to accumulate again.
As it is, the exchange rate will not be stable, it will continue to fluctuate. Don’t forget that the black market people are still in that market. They will do everything possible to make sure that the policy doesn’t work, but it has to work. Let’s have a single exchange rate.
How do you think the unified exchange rates can aid business?
I am an economist and as an one, you need to really study the areas of your production. Which area of my production is really generating forex? Those sectors of the economy are the ones that will determine your exchange rates and exchange rates parity is key. How much does transportation cost? It is not every business that is involved in foreign exchange. That parity is important and then we fix the rates. But the rates should not only be fixed, it must fluctuate with the reality on ground. Once we do that, we have no any problem again.
You can’t just hold it down with the guns like the former administration of President Muhammadu Buhari did. Whatever that President Bola Tinubu is doing right now with the unification of the foreign exchange rates is a step in the right direction.
Don’t you think foreign exchange unification may lead to job losses in the aviation sector?
Airfares will go up in the naira value, but it doesn’t change in the dollar value. If the dollar value crashes to N1 tomorrow, it will reflect in the economy. When I first came into the industry, a dollar was about 52 kobo. Supposing 52 kobo is one dollar today, how can you lose your job? The tariff may go high, but it doesn’t stop people from flying. People will travel for tourism, business, health, sports and others. The naira must have a good value. We must care about the naira and that is the job of the economist, not a banker.
Former governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, is a banker. So, he missed it. Look at Professor Chukwuma Soludo, he is an economist. He was able to balance the economy with Professor Ngozi Okonjo-Iweala. That was the most successful regime. You need the regime of the economists and the bankers.
Do you want to stimulate the economy? If that is what you want to do, then, bring the interest rates down from the present 26 percent. If the interest rate is down, people can afford to buy whatever they want. And this will lead to multiplier effect in the economy. The exchange rate will still fall automatically.
Do you think the previous government was sincere about the now controversial national carrier project?
If the government was sincere on the national carrier project, we won’t be where we are today on it. If the national carrier was meant to be Public Private Partnership (PPP), what is the government doing in it? The Infrastructure Concession Regulatory Commission (ICRC) just said the government had no shares in the project. What we used to hear is that the government had a five percent share in Nigeria Air project. If government doesn’t have shares in it, what is the government doing, midwifing Nigeria Air? If the government doesn’t have any interest, all that government needed to do is just to give full government support. All we need is full government backing for private investments to succeed.
More than 20 years ago, I was working in an airline where government said we could not do it. What they are doing to Air Peace today was what they did to us. And every minister wants to do his own airline, thinking it would succeed with government backing. So, what is needed is government backing for the private sector.
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