Airlines want quick implementation of forex policy for carriers

*How Sirika pressured govt. to act

Nigerian airline operators are still pessimistic about securing special sectorial allocation of foreign exchange for them in the Secondary Market Intervention Sales (SMIS), saying the implementation would determine its success.

Some of the operators who lauded the initiative told WoleshadareNews that that does not clear the immediate problems of the airlines, adding that the modalities and availability of forex from Banks would determine its workability.

The Managing Director of Medview Airlines, Alhaji Muneer Bankole said, “It is a welcome development but we hope it would be acted upon.”

Another airline chief who spoke on condition of anonymity said the policy would favour foreign carriers the more than domestic operators.

President, Aviation Safety Initiative (NASI) Captain Dung Rwang Pam commended federal government’s move to secure a special sectorial allocation of forex for Airline Operators in the Secondary Market Intervention Sales (SMIS) for Airline operators however, cautioning on the implementation.

Pam who described it as a welcome development however cautioned on its implementation stating that the entire process must be by the book, transparent and accountable.

He said,”It is a welcome development but must be implemented with transparency and accountability at its core and throughout the entire process. It is a welcome development that the (CBN) has decided to grant “currently operating” Nigerian airlines access to the secondary market intervention sales (SMIS). “

“As with most interventions, I hope this not just be a knee-jerk reaction to the clamour for government support to this critical sector. I expect that the entire process will be unambiguously transparent from start to finish, i.e., from the CBN, foreign exchange primary dealers (FXPD), all the way to the benefiting airlines. “

“It is expected that the economic monitoring team of the regulatory agency (NCAA) will ensure that the foreign-exchange is directed and dispensed for the purposes for which it was approved. So that at the end of the process, there will be incontrovertible evidence that there is a return to accountability within the system. “

Following the proposal sent by the Minister of State for Aviation, Hadi Sirika, airline operators can smile as the Federal Government has finally secured a special sectorial allocation of forex for them in the Secondary Market Intervention Sales (SMIS) for Airline operators.

This is to further engender market confidence, ensure access to forex by the airlines and sustain the integrity of the Nigerian Inter-bank forex market.

The Central Bank of Nigeria (CBN) has resolved pursuant to the Minister’s show of concern to intervene in the inter-bank forex market through forward settlement.

For clarity, the Special Secondary Market Intervention Sales (SMIS) – Retail is an important one-off exercise dedicated to the clearance of the backlog of matured forex obligation for airlines.

Spokesman for the Nigerian Civil Aviation Authority (NCAA), Sam Adurogboye in a statement yesterday said it is however worthy to note that other sectors were similarly availed priority in the inter-bank forex market, adding that these are raw materials and machineries for manufacturing companies and agricultural chemicals.

Adurogboye explained that the Director General, NCAA, Capt Muhtar Usman had earlier led a delegation of Airline Operators of Nigeria (AON) to hold meetings with the Ministers of State for Aviation, Finance and their Petroleum counterparts including the CBN Governor.

As a result of the meeting, Sirika was able to extricate for the foreign airlines 50 per cent clearance of their forex obligations, stressing that, “This present success is another step ahead in seamless operations in the aviation industry.”

He said it is expected that this is a major window for those airlines who had earlier ceased their operations to recommence in earnest.

Therefore, with this intervention, he said, comes a landmark incentive for both local and foreign operators to carry out safe, secure and lucrative operations in Nigeria.

“In addition, all scheduled and mandatory checks which are done in the Diasporas will be undertaken with this leverage at a reduced cost.

The Director General of the Regulatory Authority, NCAA, therefore expects the foreign operators to carry out their operations with renewed vigour.”

According to him, all problems associated with repatriation is now a foregone conclusion.

He advised all airline operators to take full advantage of this laudable gesture of the Federal Government of Nigeria and adhere strictly to the provisions of the Bilateral Air Services (BASA) with Nigeria.

In a circular from CBN to the concern sectors, “In order to further engender market confidence, ensure access to FX by end users and sustain the integrity of the Nigerian Inter-bank FX market, the Central Bank of Nigeria (CBN) has resolved to intervene in the Inter-bank FX market through forward settlement”.

The exercise is to clear backlog of the sectors concerned. CBN stated that, “This is an important one-off exercise dedicated to the clearance of the backlog of matured FX obligations for: Raw materials and machinery for manufacturing companies; Agricultural chemicals; and Airlines”.

Informing about “Bid Agents” while stating the peculiarity of the exercise CBN said, “Due to the peculiarity of this exercise the CBN will not apply the relevant provisions under clause 2.4.3 (i) of its Revised Guidelines for the Operation of the Nigerian Inter-bank Foreign Exchange Market (hereinafter referred to as the Guidelines) which provides that “all SMIS bids shall be submitted to the CBN through the FXPDs”. Consequently, CBN shall receive bids from all the Authorized Dealers.

Allotted Amount per bidder, “The CBN will also not apply the relevant provisions under clause 2.4.3 (i) of the Guidelines which provide that “Spot FX sold to any particular end-user shall not exceed 1% of the overall available funds on offer at each SMIS session”.

Bid Period, “Authorized Dealers shall submit their customers’ bids to the advised e-mail address by 2:00pm. Any bid received after this time will be automatically disqualified”.

As regards Funding, the circular stated that, “Authorized Dealers should debit the customers’ accounts for the Naira equivalent of their bid”.

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Wole Shadare

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