Apex aviation regulatory agency in the country, the Nigerian Civil Aviation Agency NCAA has assured local and foreign airlines operating in the country that with the forex concession granted them, the era of foreign airlines’ inability to repatriate funds to their home country is over.
The agency made the position known yesterday in an official statement signed by the General Manager, Public Affairs of the organization, Sam Adurugboye which was made available to LEADERSHIP.
The agency noted that with the forex concession granted to the airlines, it is expected that the foreign operators should carry out their operations with renewed vigour.
“All problems associated with repatriation is now a foregone conclusion,’’ NCAA noted.
The agency equally advised all airline operators to take full advantage of this laudable gesture of the Federal Government of Nigeria and adhere strictly to the provisions of the Bilateral Air Services (BASA) with Nigeria.
NCAA’s advice is coming on the heels of a special sectorial allocation of forex for Airline Operators in the Secondary Market Intervention Sales (SMIS) for Airline operators. According to the agency, the gesture is to further engender market confidence, ensure access to forex by the airlines and sustain the integrity of the Nigerian Inter-bank forex market.
It would be recalled that about 14 foreign airlines withdrew their services from the country recently citing low patronage on account of economic recession. Also, the foreign airlines were estimated to have lost about N64 billion in the wake of the new foreign exchange (forex) policy of the Central Bank of Nigeria (CBN).
The Minister of State, Aviation, Senator Hadi Sirika said that after much intervention by the Federal Government through the Ministry on behalf of foreign airlines and domestic operators under the aegis of Airlines Operators of Nigeria (AON), the Central Bank of Nigeria has included airlines operating from Nigeria in the Inter-Bank Foreign Exchange market through forward settlement.
“The Central Bank of Nigeria (CBN) has resolved pursuant to the Minister’s show of concern to intervene in the inter-bank forex market through forward settlement. For clarity, the Special Secondary Market Intervention Sales (SMIS) – Retail is an important one-off exercise dedicated to the clearance of the backlog of matured forex obligation for airlines. It is however worthy to note that other sectors were similarly availed priority in the inter-bank forex market. These are Raw Materials and machineries for manufacturing companies and Agricultural chemicals”, the agency stated.
The Director General, Nigerian Civil Aviation Authority (NCAA), Capt. Muhtar Usman said in order to ensure the success of the policy, he had earlier led a delegation of Airline Operators of Nigeria (AON) to hold meetings with the Ministers of State for Aviation, Finance and their Petroleum counterparts including the CBN Governor.
As a result of the meeting, Honourable Sirika was able to extricate for the foreign airlines 50 per cent clearance of their forex obligations. This present success is another step ahead in seamless operations in the aviation industry.
“It is expected that this is a major window for those airlines who had earlier ceased their operations to recommence in earnest. Therefore, with this intervention comes a landmark incentive for both local and foreign operators to carry out safe, secure and lucrative operations in Nigeria”, it added.
In addition, all scheduled and mandatory checks which are done in the diasporas will be undertaken with this leverage at a reduced cost.
Meanwhile, details of the intervention highlighted include, Type of Intervention and Special Secondary Market Intervention Sales (SMIS).
While stating the peculiarity of the exercise, CBN said, “Due to the peculiarity of this exercise the CBN will not apply the relevant provisions under clause 2.4.3 (i) of its Revised Guidelines for the Operation of the Nigerian Inter-bank Foreign Exchange Market (hereinafter referred to as the Guidelines) which provides that “all SMIS bids shall be submitted to the CBN through the FXPDs”. Consequently, CBN shall receive bids from all the Authorised Dealers.
“The CBN will also not apply the relevant provisions under clause 2.4.3 (i) of the Guidelines which provide that “Spot FX sold to any particular end-user shall not exceed 1% of the overall available funds on offer at each SMIS session.
“Authorised Dealers shall submit their customers’ bids to the advised e-mail address by 2:00pm. Any bid received after this time will be automatically disqualified”.
As regards funding, the circular stated that, “Authorised Dealers should debit the customers’ accounts for the Naira equivalent of their bid”.