Business

Airfares Soar As Foreign Airlines Hike Exchange Rate

Published

1 year ago

March 27, 2023

Editor

International airfares on Nigerian routes have gone up further by over 20 per cent after foreign airlines raised the exchange rate for ticket sale from N462 per dollar to N551 per dollar, findings by The PUNCH have revealed.

International travellers on Nigerian routes have been paying higher airfares after carriers blocked their inventory of cheaper tickets in order to cushion the effects of the rising amount of trapped funds

The latest increase in the naira-dollar exchange rate for ticket sale by the International Air Transport Association, the Switzerland-based trade association of the world’s airlines, is expected to worsen the plight of Nigeria travellers who are already paying higher airfares.

Multiple travel companies confirmed to our correspondent on Friday that global distribution system companies had notified them of the latest increase.

They said the development was not unconnected with the difficulty faced by foreign carriers in repatriating their ticket sale proceeds out of Nigeria.

According to travel agents, the increase in the exchange rate has led to an over 20 per cent increase in international airfares.

“Virgin Atlantic which has a promo of about N800,000. This same promo is going for about N1.1m as a result of the increase in the exchange rate,” the chief executive officer of a travel agency, who chose to speak on condition of anonymity, said.

As of January this year, foreign airlines flying into Nigeria had about $743m in trapped funds in Nigeria. IATA has said Nigeria has the highest amount of foreign airlines’ trapped funds globally.

Stakeholders and travel firms have however emphasised the need for the Federal Government to direct the CBN to expedite the release of the trapped funds.

A former President of the National Association of Nigerian Travel Agents-the trade body for local travel agents-Mr Bankole Bernard, who also confirmed the latest increase in IATA’s exchange rate for ticket sales, said the Federal Government needed to honour the provisions of the Bilateral Air Services Agreement signed with foreign countries particularly as it affects the repatriation of funds.

“Today, the rate at which we are issuing tickets is N551 to a dollar. Is that the official rate? No, but that is the rate we are issuing tickets, which is moving closer to the black market rate. This means the issue of trapped funds would not have been if it had been properly managed,” he said.

“The funds became trapped because we (the government) were not ready to give foreign airlines funds at the official rate. Why didn’t you tell them the rate you would give them funds so that they can sell their tickets at a particular rate as long as it is official? After all, we have multiple exchange rates. So, what will make this one different? Then, there will not be an issue of trapped funds and people will do their business and the agony travellers are facing will not be there.”

The Managing Director of Financial Derivatives Company Limited, Bismarck Rewane, a research firm, said foreign airlines could not be blamed for the latest increase in the exchange rate.

He said, “In dollar terms, airfares have not gone up, It is still the same amount. The increase will only affect those who buy their tickets in naira. But we can’t blame foreign airlines. We need to put ourselves in their shoes. Why can’t they repatriate their funds? They are losing money by not being able to repatriate their funds. Most of their expenses are denominated in dollars, how will they pay for all these services and goods when they can’t repatriate their funds?”

IATA had a few weeks put foreign airlines’ trapped funds in Nigeria at $743,721,097 as of January 2023.

IATA disclosed this in a letter addressed to the Minister of Aviation, Hadi Sirika, and signed by its Area Manager for West and Central Africa, Dr Samson Fatokun.

IATA urged the minister to intervene and ensure the resolution of the issue of airlines’ blocked funds in Nigeria.

The letter read in part, “For over a year, Nigeria has been the country with the highest amount of airline-blocked funds in the world. Please find attached the comparative table of airlines’ blocked funds by country. Moreover, as of January 2023, airlines’ blocked funds in Nigeria have increased to $743.721.092 from $662m in January 2022 and $549m in December 2022.”

While highlighting the social-economic impact of the airline-blocked funds in Nigeria, Fatokun said the increasing backlog of blocked funds of international airlines would impact negatively the foreign direct investment in the country, at a moment the country was expecting investment in the concession of some of its major airports.

He also noted the continued delay in allowing foreign airlines to repatriate their funds violates BASA.

Sirika later promised that the Federal Government would ensure the backlogs of unremitted funds were paid.

He was not specific on when this would be done. The Central Bank of Nigeria had a few months ago released part of the trapped funds. Since then, however, the central bank appears not to be looking in the direction of the foreign carriers as the amount of trapped funds rises on daily basis.

The President of the Association of Foreign Airlines and Representatives, Mr Kingsley Nwokoma, said IATA reviews exchange rates periodically, adding that the current increase might have passed through necessary steps.

According to him, foreign carriers have been finding it difficult to repatriate their funds, noting that this has made doing business in Nigeria very difficult.
PUNCH

Business

Naira Slumps, Exchanges At Over N1,500 Against Dollar

Published

1 day ago

May 13, 2024

Editor

The naira continued its depreciation against the US dollar in the foreign exchange market.

Data from the parallel market section and FMDQ showed further depreciation against the dollar on Monday.

At the parallel market, a Bureau De Change operator in Wuse Zone 4, Mistila Dayyabu, told DAILY POST that the naira was sold as high as N1,517 per dollar on Monday before settling at N1,500 per dollar.

“On Monday morning, the dollar was sold at N1,517 per dollar. However, on hearing the information about the coming of the Economic and Financial Crimes Commission operatives, we started selling at N1,500 this evening, ” he said.

The figure increased from the N1, 450 per dollar it traded at the weekend.

Similarly, at the official market, FMDQ data showed that they dipped to N1478.11 per dollar on Monday from N1466.31 last Friday.

This represents an N11.8 drop from the N1466.31 recorded last Friday.

Earlier, the Central Bank of Nigeria Governor, Olayemi Cardoso, said the apex bank’s Monetary Policy Committee will do everything to bring down soaring Nigeria’s inflation, which stood at 33.22 per cent in March 2024.

Business

CAC Opens Centre For Registration Of PoS Operators

Published

6 days ago

May 9, 2024

Editor

The Corporate Affairs Commission has inaugurated a centre for bulk registration of Point of Sale operators in its database.

The CAC Registrar-General, Hussaini Magaji, said this while inaugurating the centre stationed at its Federal Capital Territory Office in Abuja on Wednesday.

According to Magaji, the importance of registering the PoS operators in the commission’s database cannot be over emphasised.

He said the centre was well equipped with all the necessary facilities to operate 24 hours a day and ensure the commission’s achievement of its purpose.

“What we did was accommodate the request from the Fintechs.

“We have allowed them to integrate with the Corporate Affairs Commission; they have developed their structure, and we gave them access.

“Once they supply the necessary details for registration on their platform, the certificate is generally generated and transmitted directly to their platform without them having to contact anyone.

“We have done this to ensure that everyone gets it easy without hitches, but if they choose to apply manually, we have a secretariat open for them to do so,” he stated.

Recall that the Federal Government through the CAC on Tuesday issued a two-month registration deadline to Point of Sales companies, to register their agents, merchants, and individuals with the commission in line with legal requirements and the directives of the Central Bank of Nigeria.

Meanwhile, at the event, the registrar-general reiterated that the centre would be opened to all operators in the fintech industry who voluntarily submitted their agents and merchants for regularisation with the CAC.

Magaji said that the registration was in line with President Bola Tinubu’s desire to ensure financial inclusion for the youth and strengthen the fight against fraud, finance and other crimes in the country.

He further expressed his resolve to ensure compliance with the provisions of Section 863 (1) of the Companies and Allied Matters, CAMA 2020, and the CBN guidelines for Agent Banking, 2013.

On security, the CAC boss said that if a crime were committed using the PoS, the government would easily trace the perpetrators to the CAC data platform if such machines were registered.

“If an incident happens and they report it to CAC, if we do not have the operator’s details, we cannot respond, and that is the essence of this registration.

“The registration ensures that every detail of the person is provided, including NIN, passport photograph and all other useful documents.

“And it is an opportunity for more people to be captured into the formal sector,” he said.

The News Agency of Nigeria reports that the Special Adviser to the President on ICT Development and Innovation, Tokoni Peter attended the event.

The event was attended by Dr Salihu Dasuki, the Special Adviser to the President on ICT Policy Office, the PoS operators, and other stakeholders.

(NAN)

Business

FULL LIST: CBN Publishes List Of Licensed Deposit Money Banks

Published

7 days ago

May 8, 2024

Editor

The Central Bank of Nigeria has released a comprehensive list of licensed Deposit Money Banks operating within the country.

The list, which was made public on the CBN’s official website on Tuesday, provides insights into the banking landscape in Nigeria.

Banks with international authorisation include Access Bank Limited, Fidelity Bank Plc, First City Monument Bank Limited, First Bank Nigeria Limited, Guaranty Trust Bank Limited, United Bank of Africa Plc, and Zenith Bank Plc.

Commercial banks with national authorisation include Citibank Nigeria Limited, Ecobank Nigeria Limited, Heritage Bank Plc, Globus Bank Limited, Keystone Bank Limited, Polaris Bank Limited, Stanbic IBTC Bank Limited, Standard Chartered Bank Limited, Sterling Bank Limited, Titan Trust Bank Limited, Union Bank of Nigeria Plc, Unity Bank Plc, Wema Bank Plc, Premium Trust Bank Limited and Optimus Bank Limited.

Commercial banks with regional licenses are Providus Bank Limited, Parallex Bank Limited, Suntrust Bank Nigeria Limited, and Signature Bank Limited.

Players in the non-interest banking sector with national authorisation include Jaiz Bank Plc, Taj Bank Limited, Lotus Bank Limited, and Alternative Bank Limited.

In the merchant banking category, the apex banks listed, are Coronation Merchant Bank Limited, FBN Merchant Bank Limited, FSDH Merchant Bank Limited, Greenwich Merchant Bank Limited, Nova Merchant Bank Limited, and Rand Merchant Bank Limited.

The financial holding companies listed were Access Holdings Plc, FBN Holdings Plc, FCMB Group Plc, FSDH Holding Company Limited, Guaranty Trust Holding Company Plc, Stanbic IBTC Holdings Plc, and Sterling Financial Holdings Limited.

The Mauritius Commercial Bank Representative Office (Nigeria) Limited was listed as the sole representative office.