Trapped funds: FG’s action caused massive damage to Nigeria’s image
The continued withholding of ticket sales of foreign airlines by the Central Bank of Nigeria (CBN) is having a negative effect on the image of the country, Aviation Roundtable (ART) has said.
The body of aviation professionals has however advised the Federal Government to as a matter of urgency ensure the payment of the airlines’ in a bid to return normalcy to the sector.
ART in a statement by Mr. Olumide Ohunayo, its Assistant General Secretary, described as appalling the handling of the accumulated foreign airline funds trapped in the Nigeria’s banks, due to the non-allocation of forex to these airlines.
The statement hinted that in all Bilateral Air Service Agreement (BASA) arrangements, an Article in the agreement — ‘Transfer of Earnings’, clearly stated that “each designated airline shall have the right to convert and remit to its country on demand, local revenues in excess of sums locally disbursed.
Conversion and remittance shall be permitted without delay in accordance with the prevailing foreign exchange regulations”.
The body insisted that international trade is bound by agreements, which are sacrosanct and respected. It said Nigeria could not do otherwise if it wanted more Foreign Direct Investments (FDIs) in the country, stressing that no investor would be willing to invest its resources in the country with this attitude.
The statement added:”It’s important to state that foreign airlines sold these tickets at the official IATA rate and cannot be expected to go the parallel market to source, convert and remit as opined in some quarters, the central bank should do the needful as enshrined in the BASA agreements.”
”These funds should have been remitted at the official rate on date of sale immediately the Airlines get clearance after paying all the local obligations including taxes.”
”The damage that our action has done to the Nigerian image as an investment friendly nation is far reaching, while the citizenry is faced with high fares, reduced capacity and limited travelling options, which will worsen if we continue on this trajectory.”
ART explained that Nigeria found itself in this unenviable situation because it lacked the capacity to compete, which would have reduced the remittance volume.
It pointed out that the yet to be launched Air Nigeria could not produce this capacity, irrespective of the funds allocated, but by an aggregated process of developing the industry to produce vibrant flag carriers that would be courted for commercial partnerships,”which is the purveyor for successful international flight operations.”
The ART also charged the government to create a functional and credible data gathering methodology for the industry.
