Nigeria Loses $5bn Annually to Lopsided Bilateral Agreements

Nigeria loses over $5 billion annually in the aviation industry which includes about $2 billion repatriated per annum by foreign airlines and unserviced Bilateral Air Service Agreement (BASA).

This unfortunate incident occurs because the country does not have major airlines to reciprocate flight services to countries whose airlines operate in Nigeria.

The Director General of the Nigerian Civil Aviation Authority (NCAA), Captain Muhtar Usman, who disclosed this, told THISDAY in an exclusive interview on Tuesday, that such huge amount of loss was because Nigeria does not have major airlines to take advantage of the huge opportunities in the aviation market.

The market has a very high potential and is expected to double in the next 10 years.

Usman said the key take advantage of the market was to establish a national carrier and also grow two or more major airlines to benefit from the market, which the International Air Transport Association (IATA) said contributes $8.2 billion to the economy of the country and supports over 650, 800 jobs including tourism-related employment.

The Director General noted that a national carrier would enable the country reclaim its position in a market it had lost to foreign airlines, adding that with government support to other airlines in the country; Nigeria would multiply its earnings from the aviation sector.

“Let me say clearly that the potential that is existing in the aviation industry and the market share in Nigeria, as far as aviation is concerned is huge. It is enormous. That is why we have a lot of foreign carriers requesting to come and operate in the country; not only from one point but from several points because of the potential that is available.

“We have not been able to meet the need of the market. We have lost a lot and we have been losing a lot by not taking advantage of those bilateral air service agreements because we don’t have strong, viable carriers that will be able to effectively compete with foreign airlines,” Usman said.

The Director General stressed that Nigeria loses a lot of foreign exchange in the aviation sector through capital flight by foreign carriers that remit their earnings

from sales overseas.

“We also lose, not just the foreign exchange that would have been flowing in; we are losing the little that we have through capital flight. Having a national carrier and several major flag carriers would have provided jobs in the sector and solved the growing unemployment problem in the industry.

“Government has been encouraging the private sector to come in and there shouldn’t be any fear at all from the operators. This is because the market is big. It is big enough for all the players,” Usman added.

Travel expert and the organiser of Akwaaba African Travel Market, Ikechi Uko told THISDAY that for a population of over 190 million people and the number of travellers in the country, Nigeria needs at least two strong carriers on international routes for the nation’s economy to continue to grow.

He noted that international flight is denominated in dollars, so these airlines would be bringing in foreign exchange, which would be retained in Nigeria, adding that these airlines must not be government owned or designated as national carrier.