Travel Agents React to Dollar Charges by Airlines in Nigeria
- The NCAA has not addressed the controversy surrounding airlines selling tickets in US dollars, despite protests from Nigerian travel agents
- Travel agencies argue that this practice is causing higher ticket prices and depriving Nigeria of a significant portion of its travel market
- Former NANTA president and others have called on the government to ensure airlines accept naira transactions and hold the government accountable
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
The Nigerian Civil Aviation Authority has remained silent on the controversial practice of selling airline tickets in US dollars within the country, despite the repeated protests by Nigerian travel agents.
Source: Getty Images
Instead, the industry watchdog wants to know how to remove Nigeria from the grey list created by the Financial Action Task Force (FATF).
FATF is an international organisation that was founded in 1995 to spearhead global efforts to combat the financing of terrorism, money laundering, and proliferation. Because of its rising capital inflows and shortcomings in preventing money laundering, terrorism, and arms financing, Nigeria is currently on the FATF grey list.
The NCAA has ordered airlines to make sure that all foreign aircraft operating into Nigeria adhere to the $10,000 currency declaration guideline in an effort to mitigate the threat.
The NCAA claimed that its instruction, known as NCAA/CPD/ABV/298, aims to close any enforcement gaps regarding the current requirements for inbound travellers to declare their currency.
The directive reads,
“International carriers must take two key actions, which include ‘Make inflight or pre-landing announcements informing passengers of their legal obligation to declare any currency or Bearer Negotiable Instruments exceeding $10,000 or its equivalent upon arrival in Nigeria."
Agents reply
The move by several foreign airlines to accept dollar currencies as their sole legal tender for travel tickets has been met with protests by travel agencies who are members of the National Association of Nigerian Travel Agencies (NANTA).
The agents have criticised the act, claiming it is the true cause of the country's increased ticket prices and cross-border trading, in which foreign agents sell to Nigerian tourists at a lower price than what is available domestically, thus depriving Nigeria of more than 40% of its travel market.
Nigeria may lose its travel market as a result of the Federal Government's intervention in development, as called for by NANTA National President Yinka Folarin.
He added,
“We are in the trade and follow the trends in the trade; there is no need for dollar-only trade in this market anymore. And the reason is, the naira is stabilising and we must respect the naira, also the margins are closing up, if you check from banks, you will see that the difference is just a small margin, also there is liquidity and transparency because the CBN is on it.”
Currently in charge of more than 35,000 registered travel agents, Folarin urged the Nigerian government to demonstrate its sovereignty by requiring airlines to accept naira transactions in their reservation systems.
Susan Akporiaye, the previous president of NANTA, also called on the government to address the situation.
Akporiaye pointed out that despite the association's and its members' repeated protests against the continued selling of plane tickets in US dollars, the government has not responded.
Source: UGC
“For real change to happen, it starts with speaking up. Now that this conversation is out in the open, we must keep it alive. Historically, we see action only during crises, like during the era of trapped airline funds, but once those issues subside, everything returns to business as usual. Some airlines have refused to revert because they believe the government permits this practice.
“That’s why we must hold the government accountable and urge it to do the right thing. Whatever justification existed for endorsing this practice must now be re-evaluated.”
She further emphasised, “If the government is truly committed to economic growth, it cannot allow foreign companies to operate solely in foreign currency without also providing a naira option. We’ve started the conversation, and we are confident it will reach the appropriate authorities."
Travel agents call for review of CBN's policy
Legit.ng reported that travel agents in Nigeria have called on the Central bank of Nigeria to review the dollar repatriation policy as it continues to pose challenges to them in their operations.
They complained that the limit on the daily dollar transactions restricts them from sending all the funds from ticket sales to international airlines.
Back in 2020 during the coronavirus pandemic, the airlines ran into difficulties trying to repatriate their funds due to insufficient FX.
Proofreading by James Ojo, copy editor at Legit.ng.
Source: Legit.ng
