Nigeria’s forex crisis has created a huge challenge for its travel industry that stakeholders are worried it would undermine the growth of the aviation sector in the long term.
The International Air Transport Association (IATA) had last month, appealed to Nigerian government to release $450 million belonging to international carriers operating in the country, which has been withheld for long.
The Central Bank of Nigeria is understood to be holding on to the money due to tight forex policies it has put in place to wedge the naira from free-falling.
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However, the situation is creating an anti-bilateral posture that stakeholders in the Nigerian travel industry are appealing to the federal government to address before it jeopardizes future investment opportunities for the country.
The National Association of Nigeria Travel Agencies, NANTA, has urged the Federal Government and the CBN to intervene in releasing the trapped fund, which stood at over $450 million as of May 2022.
In a statement released to the media, NANTA President, Mrs. Susan Akporiaye, said that NANTA as a strategic partner in the downstream aviation sector had over the years, appealed to the Federal Government through the CBN and the Aviation Ministry to consider the possibility of reducing the humongous trapped funds.
She said the foreign airlines may resort to taking measures that will hike airfare for Nigerian travelers.
“The current situation presents a real threat to the industry and the continuity of our business as travel professionals bearing in mind the potential job losses and the attendant national economic losses just as the country gradually comes out of the pandemic era.
“The foreign airlines may resort to taking out lower inventory in the system resulting in high cost of tickets from the Nigerian market. As a result of the situation the foreign airlines find themselves in, a six-hour trip to London may attract a fare rate of about $2,000 or more.
“Foreign airlines may also encourage tickets sold outside the country to flood Nigeria, thereby affecting the survival of Nigerian travel agents and consequent loss of taxes and levies from such transactions,” she said.
The situation was exposed at the just-concluded 78th Annual General Meeting of IATA in Doha, Qatar, by the Vice President of the organization for Africa and the Middle East, Kamal Al Awadhi, who described talks to repatriate funds as a “hectic ride.”
Mrs. Akporiaye said the trapped fund is capable of reversing the excellent representation that Nigerians have made in the global travel industry as it paints the wrong narrative.
“We are by this outing once again, appealing to the Central Bank of Nigeria, the Ministry of Aviation and the office of the Vice-President to speedily intervene to bring down the amount of trapped funds to help resolve the operations of these airlines
The current development does not show Nigeria as a good business destination for an investor.
“With this situation, a bleak future more than the effects of the pandemic, awaits Nigeria travel trade operators if nothing concrete and effectual is done urgently to address this disturbing situation by the CBN.”