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Nigeria releases $425m foreign airlines’ fund, $175 million pending
- Aviation to contribute $8.2b to Nigeria’s GDP
International airlines which $600 million funds were blocked in Nigeria can now heave a sigh of relief as the Federal Government has released $425 million. remaining a whopping $175 million still in the coffers of the Central Bank of Nigeria (CBN).
The clearing house for 280 international airlines, the International Air Transport Association (IATA) while commending the Federal Government for resolving the crisis of blocked funds that almost forced all carriers to withdraw their operations last year, pleaded with the Federal Government to speed up the release of the remaining funds as with the case with Egypt which cleared all trapped funds in the country.
IATA’s Area Manager, (South-West Africa), Dr. Samson Fatokun at a press briefing yesterday when IATA Regional Vice President, Africa and Middle East, Mohammed Ali Albakri visited Nigeria.
During his visit to Nigeria, Albakri’s delegation will meet industry stakeholders from the Nigerian Civil Aviation Authority (NCAA), the National Association of Nigerian Travel Agents, IATA members airlines based in Nigeria and all domestic and international airlines.
According to Fatokun, “As at June, 2016 $600 million, but we still have $175 million left. We had a lot of engagement with the CBN. We encourage CBN to maintain the tempo. It is not the profit of the airlines but revenue from the service they did. It is funds for staff salaries; maintenance and other things the airlines need”.
He disclosed that discussions between airlines, the Central Bank of Egypt and Egypt’s Civil Aviation Authority resulted in all the remaining funds which Woleshdare.net learnt was about $240m was repatriated to the airlines.
Albakri says more jobs could be created and additional economic growth achieved in Nigeria if the West African nation used the transformative power of aviation as a strategic pillar to further strengthen and enhance its economic recovery and national development.
He reiterated that air transport supports more than 650, 000 jobs including tourism-related employment, while contributing $8.2 billion to the country’s Gross Domestic Product (GDP).
To him, over the next ten years passenger volumes are forecast to grow more than seven per cent annually, exceeding the global average by a healthy margin.
He said for Nigeria, this means an additional 7.9 million passengers will take to the sky every year, creating significant opportunity to accelerate economic growth, boost prosperity and support development.
His words, “Despite significant investment in Nigeria’s aviation sector, the country’s air transport infrastructure still ranks low among African states. IATA recognises and supports the positive developments by the government on infrastructure and aviation processes.
He urged continued adherence to international best practices and an optimal regulatory environment, adding that now that the country is emerging from recession, aviation can unlock the enormous economic potential that exists within Nigeria.
He encouraged the government to continue to promote aviation for its role as a catalyst and socio-economic enabler for the country and to promote stronger connectivity within Nigeria and its neighbouring African countries.
Albakri stated that now is the time to continue to invest in modern and efficient infrastructure to accommodate the future traffic growth that will occur.
IATA Vice President for Africa, Raphael Kuuchi said fuel prices in higher in Nigeria than elsewhere, adding that other parts needs to come to terms for the growth and positive contribution to the GDP to be achieved.
Aviation fuel costs more in Nigeria and other oil producing countries than their counterparts that do not produce oil, investigations have revealed.
For instance, in Nigeria, despite the stability in the lifting of aviation fuel across the country and the deregulation of the commodity, JET A1 has hit an all-time high of N200 per litre.
The skyrocketing price of JETA1 in Nigeria has added more to the pains of airlines, which use 30 per cent of their revenues for fuelling aircraft.
He added that for inter-connectivity, African airlines should abide by the Yamoussoukro Declaration which Nigeria is a signatory.
Kuuchi disclosed that increased intra-African air connectivity is essential if Africa is to seize the opportunities for growth promised by its demographic and resources advantages.
“Aviation in Africa supports nearly seven million jobs and $80 billion in GDP, but it faces challenges in terms of liberalization of markets, safety, costs, infrastructure, and regulation. Only through industry and governments working hand-in-hand can these challenges be overcome, to the benefit of everyone across Africa.”
A key enabler of liberalization is the Yamoussoukro Decision, signed by 44 African countries in 1999. To support economic growth, the agreement committed the countries to aviation deregulation and the promotion of transnational competition in regional markets.
