Forex scarcity, high exchange rates: Making international travel from Nigeria a costly endeavour

In light of a shortage of foreign exchange, international travel has become a challenging endeavor.

With Nigeria experiencing a high exchange rate, surpassing a thousand naira to a dollar, many individuals are exploring alternative avenues to secure more affordable airfares when journeying to neighboring nations.

Recent claims suggest that certain foreign airlines insist on ticket sales in dollars due to funds being inaccessible.

Our correspondent, Nosa Aituamen, delves into the status of these trapped funds and those involved in dollar transactions.

It is no longer news that numerous Nigerian travelers opt to purchase air tickets from nearby countries like Benin, Togo and Ghana for their overseas trips.

This trend stems from the expensive flight tickets in Nigeria, attributed to foreign airlines’ trapped funds, high interest rates, and a scarcity of foreign exchange.

These factors have led to the stoppage and closure of lower inventories for sale by travel agents representing foreign airlines.

Presently, economy flight tickets exceed N3million, while business class tickets command approximately N7million to N8million depending on airlines and destinations.

Despite the surge in prices, patronage continues to rise as travelers seek tickets beyond Nigeria’s borders, departing from both Lagos and the country of purchase.

A travel agent, Mr.Daisi Olotu noted that while business is slow for travel agencies, the government is also losing substantial funds from taxes.

“If we look at what the government is losing in terms of VAT, if you look at the sales that are going outside Nigeria, it is in billions when you convert them to naira”.

Foreign airlines, eager to convert ticket sales in naira to repatriate as dollars trapped in the Central Bank of Nigeria, have allegedly resorted to selling tickets in dollars.

This move drew criticism from the CBN, which threatened sanctions against individuals or organizations engaging in domestic transactions in foreign currencies.

Again, Mr. Daisi Olotu sheds light on whether this holds true for foreign airlines.

“I wouldn’t say yes, I wouldn’t say No. They are just doing what they like, one, to recoup their money, make up the losses and everyone is paying for that now as we speak”.

Interestingly, the purported use of foreign currency for business transactions in the aviation industry is not limited to foreign airlines.

Reports indicate that some private companies and government agencies are also involved in these alleged illegalities, as shared by Captain Samuel Caulcrik, former Rector of Nigeria College of Aviation Technology (NCAT) in Zaria.

“It is a violation of the CBN Act, it is not only them including some of our own service providers they all work together. The service providers instead of charging naira, they are charging forex, NAHCO, SAHCO, FAAN, NAMA, they paid it in dollars”.

Minister of Aviation and Aerospace Development, Mr. Festus Keyamo, recently disclosed that the government had cleared the trapped funds.

He urged foreign airlines to approach commercial banks for the remaining balance.

Emphasizing the government’s awareness of the challenges faced by local airlines in sourcing forex for maintenance, repairs, and spare parts, Mr. Keyamo assured that concrete steps have been taken to address these issues.

“Am talking to the Aviation working group already and that is the key that would unlock the aviation Industry in Nigeria”.

Spokesperson for the Airline Operators of Nigeria (AON), Dr. Obiora Okonkwo, appealed to the Minister to assist in recovering the trapped funds of local operators.

“Our money is in naira trapped, our money is in dollars trapped”.

He expressed gratitude for the Federal Government’s commitment to supporting local airlines, aligning with the administration’s renewed hope agenda for the aviation sector.