FG Asks CBN To Meet Airlines Quarterly To Resolve FX Crisis

FG Asks CBN To Meet Airlines Quarterly To Resolve FX Crisis

The Federal Government has directed the Central Bank of Nigeria (CBN) to hold a quarterly reconciliation meeting with carriers to resolve foreign exchange scarcity, which is crippling the opera­tions of most indigenous airlines.

The government said that the quar­terly meeting would enable it to get an update on the forex challenge in the country and would also lead to resolving the lingering issues associated with forex in the aviation industry.

Festus Keyamo, the Minister of Aviation and Aerospace Development, disclosed this on Wednesday in Abuja during his welcome address at the sev­enth edition of the Aviation Africa Sum­mit and Exhibition 2023.

This is as the International Air Transportation Association (IATA) has identified two Nigerian airports, Abuja and Lagos, as the most expensive in terms of charges in the world.

Keyamo also apologised to affected foreign airlines for their trapped funds in the country, promising that the government would resolve the issue soonest.

“The current administration is aware that one of the setbacks entrepreneurs have suffered in Nigeria in recent years is the fluc­tuation of foreign exchange and its availability.

“This administration is com­mitted to ensuring that forex is readily available to entrepre­neurs and the government has directed that the Central Bank of Nigeria (CBN) holds quarter­ly reconciliation meetings with airlines with a view to resolving this issue”, he said.
Keyamo also unveiled three roadmaps for the Nigerian avia­tion industry, mentioning aero­tropolis; maintenance, repair and overhaul (MRO) facilities, and aircraft leasing company (ALC).

He said these were parts of the priorities of the current admin­istration, emphasising that the three are critical for the develop­ment of the aviation industry in Nigeria and in West Africa.

He lamented that it was a shame for the entire West Afri­can countries not to have a world class MRO facilities, but assured that the country would take the lead in this.

“The government is already looking at the aircraft leasing company, aircraft maintenance organisation, forex availability and tax holidays to improve the aviation business in Nigeria.

“This includes upgrading of the Cat3 landing system, at major airports, construction of the second runway in Abuja, air­port improvement programmes through concession and govern­ment willingness to partner with companies to turn major airports into aerotropolis.

“The government welcomes major players in aircraft leasing and head lessors to invest in Ni­geria airlines to provide state of the art aircraft,” he said.

Keyamo said the government would ensure enforcement of contract agreements, rights of investors and indeed all parties were protected as Nigeria being a signatory to the Cape Town Con­vention to uphold international obligations.

The minister said main­tenance, repair and overhaul (MRO) facility was another crit­ical component that could make the Nigerian aviation industry a hub on the continent.

“With the shortage of qual­ified engineers, the current ad­ministration is willing to provide all the necessary support for the establishment of a world class MROs and training organisation.

He further explained that the current administration was open to providing tax holidays to encourage existing and new entrants into the Nigerian avia­tion sector.

“I wish to reiterate that my administration will continue to sustain the support being given to the industry.

“I firmly believe that as key players and decision makers, this summit will provide the required atmosphere for you to discuss, and identify recovery strategies that would attract private inves­tors to support the funding of infrastructure projects.

“By building a transparent, stable and predictable investment climate, as well as include avia­tion in the continent’s national development plans.

“Nigeria is honoured to have these distinguished captains of aviation industry and industry stakeholders, from all over the world who are participating in this event,” he said.

According to him, air trans­port remains an essential com­ponent of the global transporta­tion system as a crucial driver of economic, social and cultural development worldwide.

He said air transport generat­ed economic growth and develop­ment, provides jobs and fosters a range of socio-economic benefits.

Keyamo said the continued promotion of collaboration, knowledge sharing, and busi­ness development within the African aviation community would address all the significant and structural challenges.

“Having this unique and im­portant event for the seventh time demonstrates the organiser’s de­termination and interest to sup­port the sustainable development of air transport in Africa.

“I therefore wish to take this opportunity to appreciate Times Aerospace Limited, which has been the champion of the Avi­ation Africa Summit as well as making Nigeria the first country to host this noble event in West Africa.

“The recent global events further exposed the immense contribution and importance of air transportation as a catalyst for economic development, vital engine of global socio-economic growth”, he said.

Meanwhile, International Air Transport Association (IATA) has berated the Nigerian gov­ernment for stiffing airline op­erations with heavy and sundry taxes and charges.

At least, there are about 27 charges imposed on airlines by the Nigerian government, IATA said.

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Kamil Al Alwadi, the Vice President, IATA, Africa and Mid­dle East, said research shows that Nigeria ranks highest in airport charges in Africa, saying Abuja airport is the most expensive air­port in Africa, closely followed by Lagos airport.

He lamented the stunted growth in the region, especially Nigeria, calling on Nigerian gov­ernment to create a conducive en­vironment for airlines to thrive.

“In a recent research conduct­ed, web discovered that the most expensive airport in Africa is Abuja airport, followed by Lagos airport. With all these exorbitant charges, Nigerian airlines can’t compete with their foreign coun­terparts.

“Africa has put itself in a place where it cannot help its own, expensive fuel, excessive charges, leasing and insurance through the roof, the airlines need to be financially viable too. The airlines contribute to the country’s GDP but Nigeria needs to decide what to do for them to survive”, he said.

According to him, carriers based in Africa are expected to generate a moderate combined loss of around $484 million in 2023 because the continent remains a difficult market in which to op­erate an airline, with economic, infrastructure and connectivity challenges impacting the indus­try performance.

“However, despite the chal­lenges, the industry continues to move towards profitability following the COVID disruption and could be in the black as soon as next year. Underpinning this is the robust demand for air travel. As we saw in the second quarter of 2023 – and for two consecutive quarters – African carriers had one of the world’s highest annu­al passenger traffic growth rates, second only to Asia Pacific.”

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