Cross-border Ticket Sales Shrink Domestic Travel Market By 40%

Nigeria’s economy continues to lose several billion dollars in taxes annually as cross-border ticket sales have led to over 40 per cent loss of indigenous market share to foreigners, LEADERSHIP has learnt.

The cross-border sale of air tickets continues to deprive Nigeria of significant tax revenue every year. This issue arises primarily because many Nigerian travellers, due to exorbitant fares and foreign airlines’ restrictions, purchase their tickets through agents or websites based outside Nigeria. As a result, these transactions are not captured within Nigeria’s tax system, leading to substantial government revenue losses.

The proceeds from the ticket sales are, however, often kept abroad, thereby causing significant financial losses for local travel agencies and negatively impacting Nigeria’s economy.

However, travel experts have called on the federal government to protect and preserve the local market and ensure fair competition.

They questioned why airfares from Nigeria remain high despite what should be a ‘home advantage’.
Speaking on the issue, the National Association of Nigerian Travel Agencies (NANTA) described cross-border trading as the biggest threat to the Nigerian Travel Market.

NANTA’s president, Yinka Folami, who disclosed this in a chat with LEADERSHIP, said it’s unethical for global merchants to bypass local agents to sell directly to Nigerian travellers.

According to him, it fuels capital flight, unemployment and loss of market control in the country.

“You have a situation where a travel agent like me sits in Asia or Europe, and he has a better fare for Nigerian traffic. For example, a Lagos to London ticket is my market. But he has a better fare than I do, and I’m a practitioner in this market, indigenously,” he said.

“What does that serve? It serves nothing. We keep talking to everybody. I have excellent relationships with the airlines, and I keep telling them, it serves no purpose.”

He also described the trade as the biggest threat to the Nigerian Travel Market, labelling it “infidelity and “sin” to the local market.”

He explained further how unethical global merchants bypass local agents to sell directly to Nigerian travellers.

“British Airways was commended for updating its systems to prioritise Point of Commencement (POC), effectively nullifying cross-border abuse on their platform,” he asserted.

Another travel expert, Daisi Olotu, who frowned on cross-border ticket trading, called on the government to clamp down on those involved in the illicit trade.

Olotu, the group managing director of Dees Travels and Tours Limited, said Nigeria’s economy was losing so much in taxes to the illegal act.

“Cross-border sales are actually encouraging fraud, we’re losing a lot of money because of that. The Nigerian government is losing money; it is capital flight. All those who are selling tickets to Nigerians in dollars, we don’t know how they remit the money; they remit the money through the back door.

“Some of these travel agencies that are actually perpetrating this act are driven away from some of the West African countries. But, in Nigeria, we accept everything. The government is not ready to find solutions to the illegal act.”

Olotu urged the government to make registration of travel agencies operating in the sector mandatory to curb the illegal act.

“The Nigerian government is losing a lot of money to taxes. All that money they pay for those tickets, they take the money out through the back door. The government must actually do something about it. Any travel agency that is ready to operate in Nigeria should do its due diligence.”

Though, he said the Nigerian Civil Aviation Authority (NCAA) is putting machinery in place to know the number of travel agencies in Nigeria.

According to him, Nigeria should tighten their rules just like the United Arab Emirates (UAE) and the rest.

“NCAA is actually on the way to ensure that they know the number of travel agencies operating in Nigeria but not only that because for instance, in Dubai, you cannot run a travel agency without having an Emirati as one of the directors of the company, but in Nigeria, they will not adhere strictly to the rules.

“Nigeria is losing a lot of money; therefore, the government must do everything to stop it. They must have a list of all the foreign travel agencies in Nigeria. Unfortunately, some of them are not even registered with NANTA, but they are operating, operating in disguise. What I mean by operating in disguise is that you cannot trace them but they are operating and carting money away from the nation’s economy. The government must do something to stop it, else Nigeria will continue to bleed,” he stated.