Players in the Nigerian aviation industry have expressed optimism that the foreign exchange rate unification policy adopted by the Federal Government would lead to improved sector in particular and the nation’s growth in general.
They also said that the exchange rates unification would erase undue advantage some entrepreneurs have over the others.
The industry players also noted that remittances and foreign direct investments especially by foreign airlines would experience an appreciable surge once the government sustains the policy.
They, however, agreed that the implementation of the new policy may be difficult at first, but assured that the government was on a right track with the decision.
Dr. Taiwo Afolabi, the Chairman of Skyway Aviation Handling Company (SAHCO) Plc, in an exclusive interview with the Reporter in Lagos over the weekend, said that private investors would benefit more from the forex unification policy.
Afolabi, who is also the Chairman of SIFAX Group, said that apart from Nigeria, nowhere else in the world where there was two exchange rates in the market, stressing that the non-unification of the exchange rates gave undue advantage to some business organisations over the others.
He further expressed that the current high forex would not affect businesses, rather, it would lead to reduction in customs duties paid by private investors.
He assured that gradually all the challenges associated with the current decision of the government would ease, while normalcy would return to the economy.
He said: “Once it is unified, you will find out that for us to go to foreign countries to buy our equipment, it will give us a kind of reduction in duties and the cost of whatever that we are going to buy will reduce. The opportunity to go to the same common market with others will also be there. The issue of N460 or N700 to a dollar that some people are taking undue advantage of will no longer be there.
“So, it gives us joy with what the new government is doing to support us and all investors. I believe this will allow other investors to come in as soon as things are changing and getting better.
“I don’t think the high forex will affect our business. With the policy of the government, all these challenges will go down. I still believe there are some speculators that are causing the current high exchange rate. At the end of the day, we will all smile home.”
Besides, Dr. Gabriel Olowo, the President of Aviation Round Table (ART), said if the government was able to sustain the policy, it would aid economic growth.
According to him, the forex unification would also resolve the blocked funds challenge, which the foreign airlines have been battling with in the past 18 months in the country.
He specifically mentioned that the policy would enable the foreign airlines to repatriate their ticket sales funds out of the country with ease.
Olowo further declared that it was necessary for the government to merge the official rates with the black market rate in order to promote business and attract foreign direct investment (FDI) into Nigeria, stressing that the former system discouraged investments, while some were compelled to shut down operations.
“We need to merge it so that we don’t have black, white, red, concession, favourites, presidential market rates and others. We have a singular rate. But, if you don’t remit the airlines’ remittance after two weeks or maximum one month when it falls due, it will begin to accumulate again.
“As it is now, exchange rate will not be stable, it will continue to fluctuate. Don’t forget the black market people are still in that market. They will do everything to make sure that it doesn’t work, but it has to work. Let’s have a single exchange rate.
“I am an economist and as an economist, you need to really study the areas of your production. Which area of my production is really generating forex exchange? Those sectors of the economy are the ones that will determine your exchange rate and exchange rate parity is key. It is not every business that is involved in foreign exchange. That parity is important, but the rate should not only be fixed, it must fluctuate with the reality on ground.
“Once we do that, then, we have no other problem. You can’t just hold it down with the guns like the former administration did. What President Bola Tinubu is doing right now with the unification of the foreign exchange is a step in the right direction.”
He also dismissed the notion in some quarters that the current situation would lead to low patronage of airlines by passengers and job losses in the sector.
He insisted that air travellers would still travel for either tourism, medical, sports or businesses.
He, however, agreed that airfares may go up in the naira value, but won’t affect the dollar value.
Olowo blamed the Mr. Godwin Emefiele, the suspended Central Bank of Nigeria (CBN) governor, for the freefall of naira against major currencies in recent years, saying that an economist, not a banker would have been able to manage the economy better.
“Look at Prof. Chukwuma Soludo, he is an economist. He was able to balance the economy with Prof. Ngozi Okonjo-Iweala. That was the most successful regime. You need the regime of the economists and the bankers,” he said.
Besides, Dr. Alex Nwuba, aviation analyst, said the impact of the foreign exchange unification would lead to high airfares in the aviation sector.
He added that that policy would also lead to high inflation in the economy and job losses in the short term, but assured that the challenges would be resolved gradually.
“The impact on the aviation industry is clearly evident; fares will rise beyond the availability of an increasing number of people as incomes are not rising, with general inflation causing everything to go up in prices. When the price of food and gas rise, consumer priorities will change.
“However, this is a better loss to the economy than the fraud subsidy was. The saved funds will be better applied for the ultimate well-being of Nigerians.
“There will be initial job losses, but then ultimately, more people will be employed by an expanding industry, which, as we see, is growing. The improved economic outlook will stimulate expansion in the aviation industry, which will create even more jobs than we have today with better compensation.”
Source: independent.ng