Operators want payment of charges in local currency

Initial excitement that greeted the flexible foreign exchange policy of the Central Bank of Nigeria (CBN) appears to have vanished among foreign airliners as they are repatriating their accumulated funds now at a significantly depreciated value.

Repatriating at the current market rate of about N285 per dollar, as against N199 former official rate, amounts to about 40 per cent loss of value.

At least two foreign airlines that have now withdrawn their funds yesterday confirmed the 40 per cent loss.

It would be recalled that the airlines have waited for 12 months to repatriate about $600 million stuck in the Nigerian economy with several threats to quit flying Nigerian route. The operators were, however, excited with the new flexible forex regime announced by CBN, without foreseeing the huge loss that would come with it.

An official of one of the airlines that has repatriated over $5 million till date said that their worst fear was outright devaluation of the naira but the flexible policy doused their tension.

The official, who spoke on condition of anonymity, said it was expected that the exchange rate would be “slightly” on the high side to start with, but the current rate was beyond them.

He said, “We (foreign airlines) are losing money and it doesn’t make anyone happy. The money is long overdue to return to United Kingdom (UK) but the exchange rate is crazy. That is why the fares appears increasing; not that we hiked fares,” he said.

To express their displeasure with the current policy and the economy at large, the operators have kicked against continuous payment of Nigerian aviation agencies’ charges in foreign currency.

The operators, under the aegis of Airlines Operators Committee (AOC), had written letters to the Nigerian Civil Aviation (NCAA), Federal Airports Authority of Nigeria (FAAN) and Nigerian Airspace Management Agency (NAMA) to this effect.

The letters stated: “In view of the CBN directives on currency substitution and dollarisation of the Nigerian economy, we want to use this medium to advise you that all payments will henceforth be made in naira.

“In accordance to Section 15 of the CBN Act, which provides that the unit of the currency in Nigeria shall be the naira and also Section 20 sub-section 1 of the Act provides that the currency note issued by the bank shall tender in Nigeria at their face value for the payment of any amount and also section 20 sub-section 5 provides that the person who refuses to accept the naira as a means of payment is guilty of an offence and liable on conviction to a fine and also six months imprisonment.

“In the wisdom of compliance and very difficult peculiar situation in the country, we have no other choice but to make all payments in naira. We hereby solicit for your understanding in this regard,” the letter read in part.