• House summons ministry, CBN to another stakeholders’ meeting
The Lower Chamber of the National Assembly has appealed to foreign airlines to make affordable airfare layers available to the Nigerian market, as it pledges to find a solution to the stranded fund is now close to $500m.
The House of Representatives, led by its Speaker, Femi Gbajabiamila, also summoned the Ministry of Aviation and the Central Bank of Nigeria (CBN) to another stakeholders meeting scheduled for Thursday as part of measures to release trapped airlines’ funds in the country.
Meeting with the foreign airlines, International Air Transport Association (IATA), Airline Operators of Nigeria (AON) and travel agencies, on the trapped fund, Gbajabiamila noted that the inability of foreign airlines to repatriate funds has led to harsh consequences from the airlines.
However, going forward, he said: “We need a two-way solution to this. On our part, we will find a way, by intervention or others, to have the funds released. While we are looking for that solution, I will also request the foreign airlines to exercise good faith by returning to the status quo.
“Unfortunately, the other parties (Aviation Ministry and CBN) could not be here because of the two-day ministerial session going on. But we will invite them to be here to also have their own submissions. We need to find a lasting solution to ensure that we do not continue to pile up such funds,” Gbajabiamila said.
Indeed, the crux of the matter has been the inability of foreign airlines to convert their ticket sale proceeds to dollar for repatriation. Though the CBN recently released $265 million out of the total of $464 million trapped, the foreign airlines are unimpressed.
Affordable travel tickets that were earlier withdrawn by the foreign airlines in the wake of the crisis have continued to elude the Nigerian market, even as there are complaints of some foreign airlines either blocking local access to sale platforms or rejecting naira in preference for foreign currencies contrary to local regulations.
IATA Regional Manager, Dr. Samson Fatokun, told the forum that the stranded fund scenario was quite embarrassing for the country, by having in its possession 36 per cent of all stranded funds globally.
Fatokun noted that the current problem did start in March 2020 with $700 million stranded in Nigeria until $265 million was released.
He described as untrue the claim that foreign airlines were selling in foreign currencies. “The issue is that because of local conditions by banks on the use of credit cards to make payments, it has become easier to buy tickets from abroad than in Nigeria.
“Unfortunately, all of these are market reactions to the blocked fund’s realities in Nigeria. But on the appeal on foreign airlines to make booking platforms available to Nigerians and travel agencies, country managers will have to seek such approvals from their parent airline offices,” Fatokun said.
President of the National Association of Nigerian Travel Agencies (NANTA), Susan Akporiaye, had earlier said the consequence of the stuck fund was the misfortune of Nigerian travellers buying an average six-hour Economy Class ticket for between N1.5 to N2.7 million. The Business Class variant sells at an average of N4 to N5 million – being over a 250 per cent spike from the rate sold in other parts of the world.
Sources told The Guardian that the matter has almost gone out of hand, with travellers, travel agencies and the entire industry in distress.
“Government’s negligence is the biggest worry for all of us. Not only has the government failed to engage the airlines and other stakeholders concerning the stuck fund, but most disappointing is the Central Bank’s comment that foreign airlines are not its priority. Really? Then, something is fundamentally wrong with us as a people and NANTA has decided to take the matter to the National Assembly next week Monday,” one of the sources offered.