Dirty fight for Nigeria’s sky & forex – By Louis Odion, FNGE

Hadi Sirika, Minister of State for Transport
Anyone
still doubting the manipulative influence of multinationals in the political
economy of Third World countries like Nigeria only needs to pay more attention
to dispatches from our aviation sector lately. With the nation falling on hard
times in the last eighteen months over the steep drop in oil price and the $28b
foreign reserve barely enough to pay 5-month import, the Central Bank has
literally had to ration dollars to users the way food packet is shared in a
typical war situation.


For the
first time in a long while, Nigerian parents are officially told point-blank to
source forex to offset tuition of their wards schooling abroad. Tightening of
the forex screw at the official source has made the parallel market dearer with
the dollar going for N320 against N199 at the CBN. Suddenly, shopaholics are
learning abroad to endure the shame that credit cards issued by local banks are
worthless beyond Nigerian borders.

Genuine
businesses are wailing. The gnashing of teeth appears even more severe among the
rent-collectors and opportunists who, over the years, had perfected the scheme
of exploiting the nation’s liberal economic climate to make free money, pay
little or nothing as tax, and then cleverly sidestep the lax fiscal framework
to hurl their loot back to their home countries.


Louis Odion

This
time, only a few saw the hurricane coming. So, many now find themselves
drenched, thigh-deep in dirty greasy water. For 2015 alone, British Airways and
other foreign carriers claim they have a backlog of $1.3b they are unable to
repatriate home because of the Federal Government’s new restrictive forex
policies.


But
whereas hapless Nigerians have little or no choice but to swallow the bitter
pill, not so with foreign capital, which typically shares little or no affinity
with the nation or her people other than the carnal desire to exploit and
profit. To be sure, being unable to show empathy in the circumstance is no
crime; being soulless is what actually defines capitalism in its finest
tradition.


In what
brings to a new height a psychotic desperation to access the Nigerian vault,
the empire fired warning shots on behalf on its own last week. Two Nigerian
competitors on the Lagos-London route namely Medview and Arik Air were
targeted. Part of the sordid story was exclusively carried by LEADERSHIP
Wednesday.


According
to the newspaper, the European Organization for the Safety of Air Navigation
(Eurocontrol) had written Arik Air, indisputably Nigeria’s biggest indigenous
carrier today, a nasty letter. It sought to recover ongoing navigational
charges, setting an unreasonable deadline, falling which its wide-bodied
aircraft would be impounded at its next touch-down at London Heathrow. The said
claims were yet to be reconciled as Arik Air insists on 594,000 Euro while
Eurocontrol says 715,000 Euro.


The
timing was most curious. The payment demand was reportedly emailed to Arik
Air’s London/Lagos office by 7pm on Thursday (March 24), with March 30 as the
deadline. Of course, the letter only arrived after office hours on the delivery
day. It is very easy to smell the mischief in the air. Good Friday (March 25)
and Easter Monday (28) were public holidays in Nigeria. So, technically
speaking, the Nigerian carrier had just one clear day to pay the sum even when
the account had not been reconciled!


For
clarity, navigational charge is what an airline pays for using the airspace of
the country of destination. Ironically, whereas Eurocontrol is willing to smash
the Nigerian carrier with sledge-hammer, BA and Virgin Atlantic themselves are
said to be owing Nigeria’s aviation authorities including NCAA and NAMA tens of
millions of dollars in back taxes and levies. Yet, no one has served BA or
Virgin any threat or deadline in Nigeria!
David Cameron

Ironically,
until the current forex crisis, BA had always enjoyed free ride in Nigeria and
had, over the years, repatriated billions of Pounds Sterlings home unhindered.
In fact, it pioneered the Nigerian airspace during the colonial rule and for
close to a century had been making a kill on the Lagos-London route documented
today as its most lucrative in its global operations.


Indeed,
the exploitation of the Nigerian traveler has been ongoing for as long as
anyone can remember with the regulatory authorities either looking the other
way or keeping a conspiratorial silence. For instance, the Nigerian traveler
pays 76 percent more than a passenger traveling from, say Accra (Ghana), to
Europe in the premium class of any European carrier on the West African route.
Whereas the cost of a first class ticket on a European carrier on the
Lagos-London-Lagos route is about N1.4m (off peak), the cost of
Accra-London-Accra is about N774,000.


In
response to the forex constraint, BA has since January downgraded its flight
instrument to Nigeria from B747-400 (406 passengers) to B777-200ER (217). Yet,
it is finding it exceedingly difficult to fill the seats on the smaller
aircraft because more and more Nigerians are now patronizing Medview and Arik
Air, which not only offer cheaper tickets but also gladly collect Naira from
passengers. For instance, whereas
  Arik Air charges an average of N600,000 for business class,
BA charges double of that for the same class.


On its
own, Virgin simply fired all Nigerian in its employ who happened to be less
than twenty members of the cabin crew. Following criticism, it tersely
explained that they were no longer useful in its operations!


President Buhari
By now
seeking to get Medview and Arik Air off the Nigeria-UK route, Eurocontrol’s
two-prong agenda is easy to recognize. Travelers would be forced to patronize
BA or Virgin in the short term, and in the medium term, possibly force Federal
Government to direct the CBN to allow the European airlines repatriate back
home billion dollar it harvested in Nigeria last year. During her January visit
to Nigeria, one of the undisclosed objectives of the IMF managing director,
Christine Lagarde, was said to be a strong case for forex to be provided Air
France, BA and others to cart home their profits.


Beyond
the angle reported by LEADERSHIP Wednesday, the story is told that before
Eurocontrol’s drastic step against Arik Air last week, agents of BA had made
high-level presentation to the CBN in what seemed its last-ditch attempt to
make the Nigeria’s exchequer grant its request. But the CBN governor, Godwin
Emefiele, was said to have told the lobbyists point-blank that much as he
sympathized with foreign airlines unable to convert their naira savings to
forex and repatriate home, the overall health of the Nigerian economy was his
priority for now. If BA and others were to take out their $1.3b in one fell
swoop, Nigeria’s foreign reserve will instantly drop by more than five percent!


They were
told that a Nigerian carrier, Arik Air, is experiencing the same difficulty
elsewhere like Angola, an oil-rich country. The story is told that Arik Air is
today unable to access ticket sales return amounting to over $2m due to forex
crisis also being experienced by the African country, but the Nigerian carrier
is willing to exercise patience “in spirit of African solidarity.”


Leaving
the CBN disappointed, the same lobbyists were said to have secured next an
appointment with the Finance Minister, Kemi Adeosun. But told BA may be forced
to close shop if their request was not met, Minister only smiled and reportedly
said: “That means more business for Nigerian-owned carriers then.”


By
official records, yearly spend by government people on foreign tickets amount
to a whopping N20b.


Having
failed at the CBN and the Finance Ministry, the persuaders were said to have
secured the services of an influential aide to reach out to the President with
a view to making him get the CBN “do the needful” for the “sake
of 2,000 Nigerians working in the foreign airlines.”


While its
remains to be seen whether President Buhari will finally succumb to the
relentless lobbyists, to me, two weighty questions are invariably brought into
bold relief by the ongoing chess-game in the aviation sector. One is the
sustainability of a system that empowers foreign airlines to milk so much and
cart away same at will without necessarily benefitting the local economy other
than giving few demeaning jobs to Nigerian citizens.


To stir
up public sympathy, BA and others readily bandy “2,000 Nigerian
work-force” today.
  But
industry insiders are quick to dismiss this as a shameless lie. Usually, the
only jobs reserved for Nigerians for the billions of dollars carted away
annually are no more than messengers, baggage handlers and ticket officers on
the counter. No less disturbing, therefore, is the loud silence of the relevant
workers union on an issue that does not only underline patriotism but also
speak directly to the Nigerian worker’s interest.


Chris
Aligbe, an aviation aficionado captured the ugly trend in a recent interview
thus: “These people come into Nigeria and employ mostly foreigners while
our own people are not considered. Now, they claim that they have about 2,000
staff. From where did they come from?”


The
second issue is the seeming collusion of our own officials to shortchange their
own fatherland. Sustained whistle-blowing over the years by some patriotic
elements like the National Association of Nigerian Travel Agencies (NANTA) have
fallen on deaf ears as these foreign airlines continue to smile to the bank. It
is now open secret that rules are not enforced simply because the enforcers
have been captured by these foreign interests. For a bribe or commission, they
readily turn a blind eye to the discriminatory prices and allocate more
in-country-wide slots to these airlines without getting anything in return as
required under the Open Skies Agreement. No country ever develops that way.


For
instance, BA today maintains multiple entries in the country. It took a titanic
diplomatic battle before Arik Air was allowed to land at Heathrow from Lagos
years back. When the Nigerian carrier attempted to add the Abuja-London route,
the British establishment resorted to familiar dirty tricks by imposing
arbitrary charges designed solely to bankrupt its operations. After fighting
the losing battle for about a year, Arik Air was left with no option than shut
the Abuja-London route. Still seeking to extend its frontiers, Arik Air also
ventured into Dubai. But no one can compete favorably against Emirate which is
heavily subsidized by the UAE government.


Against this
sordid backcloth, the urgency of reform in the all-important aviation sector in
Nigeria can’t be overstated. Sorely needed is a bouquet of policies
deliberately formulated to empower local airlines to compete internationally.
That is where the real money is. It is simply a chicken-and-egg situation.
Without considerable financial war-chest, our local players can’t break into
the big circle, much less compete favorably.


Lots of
enthusiasm was expressed when Hadi Sirika was named Minister of State for Aviation.
At least given his modest experience as a helicopter captain, many saw a break
with the past when complete novices deployed there. But in case he truly
possesses any clear vision to change things, evidence is yet to be seen. As one
insider put: “It is like our Oga pilot is still floating in the air.
Several months after assuming office, he’s yet to bring himself down from his
high horse to even engage the airline operators and other stakeholders with a
view to charting a way forward.”


Honestly,
things can’t continue this way.

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