The Chairman of United Nigeria Airlines, Prof. Obiora Okonkwo, has alleged that the Federal Government’s plans to establish a new national carrier called Nigeria Air with Ethiopian Airlines would ultimately collapse existing indigenous airlines in the country.
Speaking to Nairametrics in Lagos earlier this week, Okonkwo also clarified that the domestic airlines under the auspices of Airline Operators of Nigeria (AON) are not against the reestablishment of a new national carrier for the country. Instead, they are against the process leading to the establishment of the national carrier.
Okonkwo, who is also the Public Relations Officer (PRO) of AON, assured that if the process leading to the formation of Nigeria Air was transparent, the operators would be among the first to patronise the new airline and give their support to it.
AON’s bone of contention: Okonkwo pointed out that the granting of a 15 years tax moratorium to Nigeria Air was absurd and insisted that it lacked patriotism of any type by the Ministry of Aviation.
He also explained that despite the 15 years of tax moratorium granted to the airline through Ethiopian Airlines, the government also agreed to indemnify the carrier for its loans abroad and in the country.
Okonkwo vowed that the operators would continue to kick against the position of the national carrier through the court, maintaining that the essence of the court was to interpret the action of the government and its agreement with the airline. He said:
- “It would have been great for any patriotic person to see a national carrier fly all over the world. We would be glad and be the best patrons, but as the operators, we know how the game is played all over the world and the implication of certain actions. We only felt some actions were unpatriotic. Unpatriotic because you granted a commercial company with a foreign interest 15 years tax break and it is supposed to be a private business.
- “But, the government is indemnifying all their debts home and abroad. And these people presented a business plan that is written in black and white that their market penetration approach is predatory pricing to send packing to the local operators. It is there in black and white. So, for us, it is only a tree that will see someone with an axe and remain there.
- “We felt that they don’t mean well for the industry and besides, the sole beneficiary of all this is going to be one of your competitors, which has a mission to dominate the entire African market to themselves for the benefit of their economy because Ethiopian Airlines is the biggest revenue source for the government of Ethiopia.”
Too disruptive for local airlines: Okonkwo wondered why the Ministry of Aviation, which has an aviation professional as its minister, would accept all the clauses embedded in the agreement with Ethiopian Airlines.
He also expressed worry that the action of the government would disrupt the recent growth in the sector, which was rated the second fastest-growing industry in the world in the last year after Colombia.
He, however, lauded the government for approving free customs duties to airline operators on the acquisition of aircraft and importation of aircraft, saying that this gesture had gone a long way to giving succour to the operators.
- “This is one sector that we will appreciate this administration that has given us a tax-free on imported spares and aircraft. Without that this industry would have died because the cost of operation is huge. So, we have always been cautious of this and we have always done what we needed to do to support this government with our operations.
- “We have seen a lot of reciprocity from our members too. We believe that the issue we have here is not about capacity, but the effort of the government to support the players in the industry,” he said.
Why We Seek Inclusion In Conditional Cash Transfer –Obiora Oti
THE National Vice President of Mobile Money and Bank Association of Nigeria (MMBAN), Obiora Oti, said money wallet bankers would improve their capitalisation and liquidity if the government included them as facilitators in the conditional cash transfer scheme.
Oti told The ICIR exclusively on Wednesday, November 8, that many young people involved in the money wallet business could be supported with a seed capital of about N50,000 and become part of the Federal Government’s cash transfer scheme.
This development, he said, would ensure enough liquidity for them to stay in business since many of them have undergone financial inclusion training under the Central Bank of Nigeria (CBN) policy guidelines.
Oti recalled how he supported someone with seed money of N20,000 in 2020, during the COVID year, and how the person has become an aggregator and now manages N15,000,000 capital.
“This is how financial inclusion works, and it is one of the fastest ways of removing people from poverty,” he said.
“Typically, you don’t grow the gross domestic product (GDP) by throwing money to people through interventions. When there is a channel for such distribution, it stimulates the economy’s growth,” he added.
He also argued that empowering money wallet agents was a sure way of driving Nigeria’s financial inclusion and economic base.
According to Oti, Nigeria has many lessons from Kenya in its financial inclusion success story because of the Kenyan government’s involvement and facilitation through policy direction and incentives to operatives.
Agency banking allows customers to deposit and withdraw money instead of going to the bank or using automated teller machines (ATMs.)
Currently, there is one agency banking agent for every 80 Nigerians and one bank branch for every 27,000, according to a 2023 report on the Nigerian Financial Services Market.
Naira Falls To N1, 000/$ In Official Market
Despite recent moves by the Central Bank of Nigeria to strengthen the foreign exchange market, the naira closed trading on the Investor & Exporter forex window on Thursday at N996.75/$.
This is a 13.95 per cent decline from the N874.71/$ it closed trading on Wednesday. So far, the naira has lost 27.75 per cent of its value since opening the week at N780.23/$ according to details on FMDQ OTC Securities Exchange.
Since firming up against the dollar last week, after news that the apex bank was clearing some of its backlog broke, the naira has been on a steady decline in both the official and parallel markets.
So far, the naira has lost about 40 per cent of its value in 2023, earning the tag of one of the worst performing African currencies from the World Bank.
In the parallel market, the currency has lost value too, falling from N950/$ as of Friday to close to N1,140/$ as of Thursday according to Bureaux De Change operators who spoke to The PUNCH. This represents a 20 per cent decline.
A trader who only gave his name as Kadri said, “Dollar is N1,100 if you want to sell. It is N1,140 if you want to buy.” Another trader, Awolu, stated that he would buy the dollar at N1,100 from our correspondent.
He said, “Dollar is N1,100 if you want to sell to me.”
Earlier in the week, the President of the Association of Bureaux De Change Operators of Nigeria, Aminu Gwadabe, told The PUNCH that the dollar was gaining against the naira because people who had bought it at a higher price were resisting its fall.
He said, “Speculators are always looking at elements of sustainability. Once they sense that it (the injection) is not continuous, they begin to react. They begin to react. It is the reaction of the market we are witnessing. Also, there is resistance. There are people that bought at a higher price that this does not favour. People are not willing to take further losses.”
Concerned with the fall of the currency, the presidency recently stated that it is planning policies to strengthen the local currency.
A Special Adviser to the President on Economic Matters, Dr Tope Fasua, who was representing the Vice President, Kashim Shettima, at an event, said: “For those who are speculating and praying and wishing that the currency would become nonsense, I believe that the central bank is rolling out the policies and the government that I serve, led by the President, will shock some of them.”
Dangote Repatriates $688m From African Operations
Dangote Industries Limited has revealed that it has so far repatriated over $687.98m through various banks in Nigeria.
In a statement on Sunday, the company said it brought in $576,008,672.41 through various banks in Nigeria, in addition to a $111,968,109.38 cash swap arrangement between Dangote Cement Plc and Ethiopian Airlines.
Dangote re-affirmed its determination and belief in Nigeria, noting that the government of President Bola Ahmed Tinubu had shown the will and resolve to get the economy moving again.
“We are not body-shop investors. We believe in Nigeria, and we believe in Africa. We are genuine and authentic about our investments, and we call on all relevant agencies to investigate our FX transactions in the past 10 years and make public any infraction noticed or discovered.”
Insisting that all forex purchased in respect of its African Project Expansion were genuine and fully utilised for what they were meant for, the firm noted that the projects for which the forex was utilised were visible for everyone to see.
“It is on record that some of these projects were commissioned by Nigerian top-ranking government officials and in attendance were chief executives of various banks, captains of Industries, and the Presidents of the host countries supported by their Senior Government officials.
“The commissioning events of these projects were well documented and covered by both local and international media. There are also print and electronic copies of the commissioning ceremonies as further testimony to the judicious utilisation of the funds.”
Dangote further explained that its massive investments in Africa would lead to the repatriation of forex in the very near future and boost foreign exchange earnings in Nigeria, as well as stabilise the forex market.