AUGUST 20, 2023

BY CHARLOTTE SEET

Nigerian carriers are struggling to obtain hard cash to pay for the expensive insurance premiums.

SUMMARY

•  Nigerian carriers are facing a growing problem of being unable to pay for aircraft insurance and other required services due to a severe shortage of foreign exchange.
•  The Central Bank of Nigeria's decision to float the naira and the decline in foreign imports and exports have exacerbated the problem, as airlines have limited access to US dollars at a favorable exchange rate.
•  The Nigeria Civil Aviation Authority threatens to ground any uninsured aircraft and issue penalties against airlines and aviation service providers.

Amidst a consistently weakening local currency and a severe shortage of foreign exchange in Nigeria, paying for aircraft insurance coverage and other services has been an uphill battle for many Nigerian carriers. And on top of this problem, the Nigeria Civil Aviation Authority threatens to ground uninsured aircraft and will issue penalties against airlines and aviation service providers.

Insurance is a growing problem

Nigerian carriers typically sell their tickets in naira but are expected to pay for aircraft insurance premium payments, aircraft maintenance, and spare parts in US dollars. But a couple of months ago in June, the Central Bank of Nigeria floated the naira and directed commercial banks to only sell foreign exchange at market-determined rates, causing a significant shortage of foreign currency within the country as investors are unimpressed.

When coupled with how foreign imports and exports in Nigeria have steeply declined in recent years, the value of the naira could only spiral downward, and airlines have little to no access to the US dollar at a favorable exchange rate. And without much of the US dollar, the number of airlines being unable to pay for aircraft insurance and other required services continue to increase at an alarming rate.btain the hard cash required, as the Chief Operating Officer of Ibom Air, George Uriesi, highlights:

"Insurance is a growing problem, and because we cannot fly an uninsured aircraft, we have no choice but to hang in there and source for the dollars to do the insurance. The losses we accumulated were mainly dollar-based components, when you are procuring dollars above the then CBN rate, you apply when it was N400 to a dollar and you get it at N680. The difference is massive.”

Sanctions will soon be deployed

As more aircraft fall under the uninsured category, the Nigeria Civil Aviation Authority issued a directive on August 11th addressed to all airlines and accompanying aviation service providers, signed by the Director General of Civil Aviation, Captain Musa Nuhu. According to the directive, any aircraft operated by any local airline without a valid insurance cover will be grounded.

The valid insurance cover required means the aircraft must be insured for not less than three months, and airlines and aviation service providers are to submit copies of valid insurance certificates, evidence of premium payments, and other policy-related documents to the authorities to avoid such groundings. It's unsure if the authorities will issue a similar directive for any inadequate aircraft maintenance, although given the same alarming trend, the likelihood is possible.

The directive also indicates that any airline and aviation service provider not complying with Part 18.14.11 of the Nigerian Civil Aviation Regulations - which came into effect on July 10th this year, will result in immediate sanctions. Captain Nuhu emphasizes the sanctions, in addition to the aircraft grounding, will include heavy penalties enforced on the defaulters, albeit the penalties were not precisely detailed.

Bottom line

While the grounds and sanctions are justified for aviation safety, the overall outlook for Nigerian carriers is not any better with this new threat. With the Nigerian aviation industry still struggling to regain momentum, the current obstacles could result in the collapse of some airlines as more grounded aircraft ultimately means fewer revenue flights operated.

AUGUST 21, 2023

The controversial plan by the government of former President Muhammadu Buhari to float a new national carrier, Nigeria Air, in conjunction with Ethiopian Airlines has again suffered a fresh setback as the Chief Judge of the Federal High Court, Justice John Tsoho, has cancelled the decision to transfer the suit of Airline Operators of Nigeria (AON) against Nigeria Air to Abuja, citing fundamental flaw in the judgement given by Justice Omotosho to the effect that counsel to Nigeria Air concealed some facts, which rendered the judgement null and void

The matter is now to continue in the Federal High Court in Lagos.

The letter emanating from the Chief Judge’s Chambers addressed to Dr Alex A. Izinyam(SAN), PhD, OFR, resolved that the matter is now to continue in the Federal High Court (FHC), LagosThe Patagonia Desert- A 4k Aerial Film of Argentina

The letter titled Re: Judgement In Suit No. FHC/ABJ/CS/271/2023 between the Registered Trustees of the Airline Operators of Nigeria and 5 ORS V. J.T. Tsoho drew their attention to the non-disclosure by the counsel’s clients that there was a pending motion for the transfer of the case while making an administrative application to the same effect.

The letter, signed by the Chief Judge, Honourable Justice John T. Tsoho, OFR, read: “Please refer to your letter dated May 4, 2023, on the above subject matter.

It has reported the delivery of Judgement in the aforementioned suit by Hon. Justice J.K. Omotosho on April 27, 2023, dismissing the said suit for lack of a cause of action and abuse of court process.

“The Plaintiffs in the said suit challenged the 1st defendant, J.T. Tsoho, Chief Judge of the Federal High Court, who acted in his Judicial capacity by transferring Suit No. FHC/LICS/2159/2022 from Lagos to Abuja Judicial Division.

“While noting the dismissal of Suit No. FHC/ABJ/CS/271/2023, may I humbly draw your attention to my earlier letter addressed to you, dated March 9, 2023, particularly to paragraphs 8, 9, and 10 thereof regarding Suit No. FHC/L/CS/1999/2022?

This is to the effect that non-disclosure by your clients that there was a pending motion for the transfer of the case while making an administrative application to the same effect rendered the application fundamentally flawed.

“As a result, I resolved to reverse the transfer of the case, but for the pendency of Suit No. FHCIABJ/CS/271/2023.

“Therefore, following the dismissal of Suit No.FHC/ABJ/CS/271/2023 by Hon. Justice Omotosho, the transfer of Suit No. FHC/L/CS/2159/2022 is hereby cancelled.

AUGUST 22, 2023

BY  Iva Poshnjari, BNN Bloomberg

The Open Canada is sitting in one of the largest housing bubbles of all times Strategist
Phillip Colmar, managing partner and global strategist at MRB Partners, joins BNN Bloomberg for his view on the Canadian market and economy. Colmar warns on Canada's housing bubble and adds Canada is a weak link to the global economy. He is also cautious on the TSX.

The Canadian housing market is at high risk of unravelling, according to one expert.    The level of debt that Canadians have taken on in comparison to their incomes has put many in a precarious position should mortgage rates continue to rise — which is likely, Phillip Colmar, partner at Global Strategist at MRB Partners, told BNN Bloomberg in an interview on Tuesday.    “Canada is probably sitting on the largest housing bubble of all time,” he warned.    Colmar argued that the inflated home prices in Canada are a result of two decades' worth of easy money supplied by the Bank of Canada’s monetary policy for numerous reasons. At present the moment, he sees risk in mortgage rates climbing as Canadian bond yields are dragged up, particularly at a time when debt-to-income ratios are sky high.    “The worst part for a housing bubble is when you have [a] credit bubble underneath it,” Colmar warned.    “The amount of Canadian leverage into the system versus incomes is pretty astronomical — and we’ve seen debt serving going up dramatically.”   While the Canadian banks are doing their part to stop the housing market from toppling over, Colmar said he believes it inevitably will.    “There is definitely a risk here that if mortgage rates go higher or unemployment were to rise or we hit the next recession, then this thing does end up in a deleveraging cycle,” he said. 

AUGUST 22, 2023

The certification process of Nigeria Air (NWB, Lagos) - the federal government's nascent joint venture with a consortium led by Ethiopian Airlines - is expected to resume in September following the swearing-in on August 21 of new Aviation Minister Festus Keyamo, insiders have told ch-aviation.

It is hoped that Keyamo will end the current limbo surrounding Nigeria Air, whose finalisation of certification awaits the resolution of a legal challenge before the Abuja High Court from five private carriers under the umbrella of the Airline Operators of Nigeria (AON). They secured an interdict against the government in November 2022, suspending the creation of the new flag carrier, citing anti-trust grounds. However, those in the know believe Nigeria Air's stalled process towards obtaining an air operator's certificate (AOC) will continue in early September, as everything has been prepared.

Ethiopian Airlines Chief Executive Officer Mesfin Tasew recently told Bloomberg TV that Nigeria Air would commence operations in October 2023.

It is hoped, industry sources told ch-aviation, the new aviation minister will calm political forces that sought to scapegoat former Aviation Minister Hadi Sirika for chartering a Nigeria Air-branded Ethiopian B737-800 for a demonstration flight. The establishment of Nigeria Air as a 51/49 public-private partnership between the federal government and a consortium of Nigerian investors led by Ethiopian Airlines is overseen by the Infrastructure Concession Regulatory Commission (ICRC), an agency of the Nigerian federal government responsible for the development and implementation of PPPs.

A senior advocate, columnist, human rights activist, former Minister of State for Niger Delta, and Federal Minister of Labour and Employment under ex-President Muhammadu Buhari, Keyamo was appointed in his new portfolio by the new President Bola Tinubu on August 16, 2023. He is described as a stalwart of the ruling All Progressives Congress (APC).

According to the Nigerian Tribune newspaper, apart from guidance relating to the nascent national carrier, Keyamo will have to address the Nigerian aviation and aerospace sector's challenges, which include inadequate infrastructure, safety concerns, shortage of a skilled workforce, regulatory issues, limited funding, security threats, inefficient airspace management, lack of connectivity to remote regions, an ageing fleet, and corruption, collectively hindering the growth, safety, and sustainability of the industry.

Meanwhile, the Nigerian Civil Aviation Authority (NCAA) has been getting its house in order ahead of a scheduled Universal Safety Oversight Audit Programme (USOAP) audit of the NCAA by the ICAO at the end of August. audit of the NCAA by the International Civil Aviation Organisation (ICAO) at the end of August. The NCAA has been vocal in applying and adjusting regulations, including upping minimum fleet sizes, insurance coverage, and suspending operations of MaxAir (Nigeria) (VM, Katsina) after a safety audit.

AUGUST 23, 2023

By Seun Opejobi

Airline operators are considering an increment in the price of flight to N250, 000.

Spokesperson for Airline Operators of Nigeria, AON, and Chairman of United Nigeria Airlines, Obiora Okonkwo, said the cost of a one hour flight from Lagos to Abuja might rise to N250, 000.

Okonkwo dropped the hint while appearing on Arise Television, Morning Show on Wednesday.

The AON spokesman emphasized the need for the Central Bank of Nigeria, CBN, to create a window for local airlines to access foreign exchange.

According to Okonkwo: “If you think tickets are expensive, then you probably don’t appreciate the sacrifices made by local operators.

“If we have to charge the fares, the way the costs are increasing every day, we should be paying not less than N250,000 from Lagos to Abuja.”

He also charged the Aviation Minister, Festus Keyamo, to collaborate with other governmental bodies to identify and resolve issues responsible for problems in the aviation sector.

On the issue of foreign exchange challenges, Okonkwo said: “You have naira and you can’t convert it to the dollar.

“So, the solution to this is for our minister to understand that we need a special window with the CBN to access foreign exchange.”

AUGUST 24, 2023

More Nigerians were granted sponsored study or student visas by the United Kingdom as the number almost doubled in one year, according to new official immigration data.

The data from the British government on Thursday shows that of the top five nationalities granted sponsored study visas, Nigerian nationals saw the most significant percentage increase, up 73 per cent from 33,958 in the year ending June 2022 to 58,680 in the year ending June 2023.

This means that 24,722 Nigerians were granted sponsored study visas within the period under review.

According to experts, Nigeria’s high intellectual capabilities, cheap labour, sizeable working population, high diaspora remittances, and the withdrawal of the UK from the European Union are why the UK is scouting for Nigerians.

“They are looking for Africans not out of love but for the love of skills, especially those that can prepare them ahead of the future,” Kemi Ogunkoya, a Lagos-based leadership development strategist, said.

She added that Nigeria, which has a large population, has a lot of educated people. “So, it is more about the prosperity of the country and economic benefit they will derive.”

According to Jennifer Oyelade, director of Transquisite Consulting, European countries will continue to look for more Nigerians to come into their region because it financially works best for them.

“Secondly, they believe Nigerians will be able to fill the unemployment gaps caused by the great resignation across Europe,” she said.

A recent article by Matthew Page, a non-resident scholar at the Carnegie Endowment for International Peace, noted that British independent schools, especially private boarding ones, view Nigeria as an increasingly attractive market.

“Most of them warmly welcome Nigerian students and overwhelmingly see them as better-than-average performers and net contributors,” he said.

The UK, one of the most advanced economies in the world and top places to study, operates an immigration system underpinned by the principle of visa sponsorship.

The sponsor for immigration purposes is the educational institution where the student will study, and the visa is issued for a particular course.

In 2019, the UK updated its International Education Strategy. The update reaffirmed the government’s goals of increasing the value of its education exports to £35 billion ($48 billion) and hosting at least 600,000 international students annually by 2030.

The strategy commits to previously established goals for foreign enrolment growth, which new immigration routes and work opportunities for international students have replaced. It intends to create clearer pathways to immigration.

This growth will be achieved through the Graduate route, launched in July 2021. The course will allow eligible students to stay in the UK to work or look for work for two years (three years if studying at PhD level) after they have completed a degree in the UK. Others are high-potential individual visas, global talent visas and scale-up visas.

India, Indonesia, Saudi Arabia, Vietnam, Nigeria, Brazil, Mexico, Pakistan, Europe, China, and Hong Kong are the markets spotlighted as priorities for the UK.

The minimum 600,000 target was achieved in 2021 as the total number of international students hit 605,130 and 679,970 in 2021 and 2022, respectively.

The immigration data also revealed that Africa’s most populous nation had the highest number of dependents (67,516) of sponsored study visa holders in the year ending June 2023, more than twice the number (31,791) ending June 2022.

“Indian nationals had the second highest number of dependents, increasing from 24,858 to 43,552. The increases for Nigeria and Indian dependents reflect the increases seen in main applicants and are fairly in proportion to those changes,” it said.

However, the number of sponsored study visa holders and their dependents might decline next year because the UK’s recent visa policy restricts the number of families for international students due to increased net migration.

“The UK is a top destination for the brightest students to learn at some of the world’s best universities. But we have seen an unprecedented rise in student dependents being brought into the country with visas,” Suella Braverman, UK’s home secretary, said in May.

She said it is time for us to tighten up this route to ensure we can cut migration numbers and meet the government’s pledge to the British people to cut net migration.

“Students with families from Nigeria will most likely apply to study in Canada, Germany, France, Finland or Australia next year,” @OgbeniDipo tweeted via his Twitter handle.

“Europe has a population problem as it has an ageing population. This restriction will shed more light on other countries looking for skilled workers,” Toyyib Adelodun, a UK-based immigration consultant, said.

He said most of the tuition fees in European countries are not expensive, but the language barrier is the only problem. “But if Nigerians are determined to stay, they can overcome that problem.”

High poverty, unemployment, poor human capital development, insecurity and poor education are significant reasons many Nigerians are leaving the country in search of greener pastures.

Seeking higher education abroad has become a significant means of permanent emigration.

Ogunkoya said the ‘japa’ wave (a Yoruba word for “run quickly”) will continue to widen the talent shortages, and even the quality of talent left behind will be a problem for companies.

“So it is heavily dependent on the policies of the government. They must be more proactive by developing a strategic national plan to develop our human capital and improve our economy over the next five or ten years. Otherwise, organisations will be in a losing battle,” she added.

According to Ikemesit Effiong, head of research at SBM Intelligence, up until now, the government’s approach towards engaging with the Nigerian diaspora has been hazardous at best or non-existent at worst.

“The fact that they left does not mean that we have to break up any engagement with them. We need a deliberate engagement strategy to attract skilled talents from Nigeria. We have to keep that engagement going so that their only connection in Nigeria will not be only sending remittances to their loved ones,” he said.

AUGUST 24, 2023

BY  James Regan and Samy Adghirni, Bloomberg News

(Bloomberg) -- French Finance Minister Bruno Le Maire pledged to reinforce controls on foreign investment in the country’s businesses in order to protect strategic industries and technologies.

The sectors covered will be expanded to include companies involved in the extraction and processing of critical raw materials, he said. Controls will also be extended to the French branches of foreign firms to crack down on buyers bypassing checks.

“The potential for preying on our technologies and know-how has never been so high,” Le Maire told business leaders Thursday during a visit to the Haute-Savoie region of southeastern France in his first speech since the summer break.

French President Emmanuel Macron has been pushing Europe to become more autonomous following the Covid pandemic and Russia’s invasion of Ukraine. France and other European countries are also asserting national oversight of businesses and re-thinking some of their supply chains to bring production of key equipment and technologies back to the region.

The committee that reviews foreign investments in France examined 325 dossiers last year, up from 137 in 2017, Le Maire said. He also reaffirmed that the 10% threshold at which controls are triggered on non-European entities taking stakes in strategic companies, reduced in 2020 from a prior level of 25%, would remain in place.

“This is about protecting the interests of national security, this is not about protectionism,” according to Pascal Bine, a partner at Skadden, Arps, Slate, Meagher & Flom LLP. “France, the UK, Germany, Italy. All these countries now have more effective tools to control foreign investment.”

Earlier this month, Italian Prime Minister Giorgia Meloni’s cabinet approved legislation that gives the government extra powers to control what can be transferred abroad in fields including artificial intelligence, semiconductors, cybersecurity, aerospace and energy. 

In the Netherlands, new legislation will enable the Dutch government to limit the size of investments or block a deal entirely on the basis of national security. The legislation is aimed at protecting “knowledge-intensive companies against unwanted knowledge transfer,” according to the Defense Ministry.

Bine added that he doesn’t expect the measures announced by Le Maire to harm the economy. “Look at the US, which is the country with the most restrictions on foreign investment and at the same time the most attractive nation for foreign investment,” he said.

The number of notices reviewed by the Committee on Foreign Investment in the United States, or CFIUS, rose to 286 last year from 97 in 2013, according to its annual report.

Delayed Deal

France has recently started looking at ways to prevent Velan SAS, a domestic supplier of parts for nuclear reactors, from falling into US hands as it aims to protect a strategic industry. The business is a French unit of Quebec-based Velan Inc., which is being taken over by Flowserve Corp. The deal was expected to close by the end of the second quarter and has been delayed.

French nuclear-submarine parts supplier Segault SAS has already been carved out of that deal following government efforts to bring a key technology into domestic ownership, with a fund lined up to buy it in the coming weeks, according to people familiar with the matter.

Two years ago, France objected to a non-French investor taking over a grocery chain when it balked at an attempt by Canada’s Alimentation Couche-Tard Inc. to buy Carrefour SA.

In his speech on Thursday, Le Maire said that France won’t invest money in cutting-edge technologies and training its best scientists just for it all to be stolen.

 

(Updates with analyst comment starting in sixth paragraph.)

AUGUST 24, 2023

More Nigerians were granted sponsored study or student visas by the United Kingdom as the number almost doubled in one year, according to new official immigration data.

The data from the British government on Thursday shows that of the top five nationalities granted sponsored study visas, Nigerian nationals saw the most significant percentage increase, up 73 per cent from 33,958 in the year ending June 2022 to 58,680 in the year ending June 2023.

This means that 24,722 Nigerians were granted sponsored study visas within the period under review.

According to experts, Nigeria’s high intellectual capabilities, cheap labour, sizeable working population, high diaspora remittances, and the withdrawal of the UK from the European Union are why the UK is scouting for Nigerians.

“They are looking for Africans not out of love but for the love of skills, especially those that can prepare them ahead of the future,” Kemi Ogunkoya, a Lagos-based leadership development strategist, said.

She added that Nigeria, which has a large population, has a lot of educated people. “So, it is more about the prosperity of the country and economic benefit they will derive.”

Read also: UK’s skilled worker visa scam leaves Nigerian victims stranded, renews struggles

According to Jennifer Oyelade, director of Transquisite Consulting, European countries will continue to look for more Nigerians to come into their region because it financially works best for them.

“Secondly, they believe Nigerians will be able to fill the unemployment gaps caused by the great resignation across Europe,” she said.

A recent article by Matthew Page, a non-resident scholar at the Carnegie Endowment for International Peace, noted that British independent schools, especially private boarding ones, view Nigeria as an increasingly attractive market.

“Most of them warmly welcome Nigerian students and overwhelmingly see them as better-than-average performers and net contributors,” he said.

The UK, one of the most advanced economies in the world and top places to study, operates an immigration system underpinned by the principle of visa sponsorship.

The sponsor for immigration purposes is the educational institution where the student will study, and the visa is issued for a particular course.

In 2019, the UK updated its International Education Strategy. The update reaffirmed the government’s goals of increasing the value of its education exports to £35 billion ($48 billion) and hosting at least 600,000 international students annually by 2030.

The strategy commits to previously established goals for foreign enrolment growth, which new immigration routes and work opportunities for international students have replaced. It intends to create clearer pathways to immigration.

This growth will be achieved through the Graduate route, launched in July 2021. The course will allow eligible students to stay in the UK to work or look for work for two years (three years if studying at PhD level) after they have completed a degree in the UK. Others are high-potential individual visas, global talent visas and scale-up visas.

India, Indonesia, Saudi Arabia, Vietnam, Nigeria, Brazil, Mexico, Pakistan, Europe, China, and Hong Kong are the markets spotlighted as priorities for the UK.

The minimum 600,000 target was achieved in 2021 as the total number of international students hit 605,130 and 679,970 in 2021 and 2022, respectively.

The immigration data also revealed that Africa’s most populous nation had the highest number of dependents (67,516) of sponsored study visa holders in the year ending June 2023, more than twice the number (31,791) ending June 2022.

“Indian nationals had the second highest number of dependents, increasing from 24,858 to 43,552. The increases for Nigeria and Indian dependents reflect the increases seen in main applicants and are fairly in proportion to those changes,” it said.

However, the number of sponsored study visa holders and their dependents might decline next year because the UK’s recent visa policy restricts the number of families for international students due to increased net migration.

“The UK is a top destination for the brightest students to learn at some of the world’s best universities. But we have seen an unprecedented rise in student dependents being brought into the country with visas,” Suella Braverman, UK’s home secretary, said in May.

She said it is time for us to tighten up this route to ensure we can cut migration numbers and meet the government’s pledge to the British people to cut net migration.

“Students with families from Nigeria will most likely apply to study in Canada, Germany, France, Finland or Australia next year,” @OgbeniDipo tweeted via his Twitter handle.

“Europe has a population problem as it has an ageing population. This restriction will shed more light on other countries looking for skilled workers,” Toyyib Adelodun, a UK-based immigration consultant, said.

He said most of the tuition fees in European countries are not expensive, but the language barrier is the only problem. “But if Nigerians are determined to stay, they can overcome that problem.”

High poverty, unemployment, poor human capital development, insecurity and poor education are significant reasons many Nigerians are leaving the country in search of greener pastures.

Seeking higher education abroad has become a significant means of permanent emigration.

Ogunkoya said the ‘japa’ wave (a Yoruba word for “run quickly”) will continue to widen the talent shortages, and even the quality of talent left behind will be a problem for companies.

“So it is heavily dependent on the policies of the government. They must be more proactive by developing a strategic national plan to develop our human capital and improve our economy over the next five or ten years. Otherwise, organisations will be in a losing battle,” she added.

According to Ikemesit Effiong, head of research at SBM Intelligence, up until now, the government’s approach towards engaging with the Nigerian diaspora has been hazardous at best or non-existent at worst.

“The fact that they left does not mean that we have to break up any engagement with them. We need a deliberate engagement strategy to attract skilled talents from Nigeria. We have to keep that engagement going so that their only connection in Nigeria will not be only sending remittances to their loved ones,” he said.

AUGUST 25, 2023

Some individuals who came to the UK on a skilled worker visa are facing a grim reality – the jobs they were promised do not exist.

Among these individuals is Blessing (name changed to protect her identity), a woman from Nigeria who shared her ordeal with Sky News. Having paid £10,000 to an “agent” in Nigeria for a skilled worker visa, she arrived in the UK with high hopes of working as a carer, only to discover that no job awaited her.

“I should be in a position of helping, not receiving aid,” Blessing expressed with a mix of frustration and helplessness as she spoke anonymously to Sky News in the corridor of a food bank. Her dreams of financial independence and self-reliance were shattered upon realizing that the promised job was a mere illusion.

Blessing recounted her journey, disclosing that she had paid a significant amount to the agent in Nigeria, trusting the promise of a legitimate job opportunity in the UK. However, when she arrived in the country three months ago, her hopes were dashed as she found herself without work and dependent on handouts. The emotional toll has been immense, as Blessing, a diligent and hardworking individual, grapples with the reality of her situation.

Her story is not unique. An investigation by the UK-based news platform has unearthed a widespread issue of abuse within the skilled worker visa system. Middlemen are allegedly profiting from individuals seeking jobs in the UK as carers, exploiting their hopes and dreams.

In Greater Manchester, the Nigerian Community Centre operates a food bank to support individuals like Blessing who are struggling to make ends meet due to false promises. Mary Adekugbe, the founder of the center, expressed her concern over the increasing number of skilled worker visa holders needing support, describing the situation as “shameful.” Many who come to the food bank have skilled worker visas, reflecting the scale of the problem.

Blessing’s plight is just one example of the larger crisis that has emerged within the skilled worker visa system. People like her, who paid substantial amounts of money to secure a better future in the UK, are left destitute, turning to food banks for basic necessities and even resorting to sleeping rough.

As stories of despair and desperation continue to emerge, it becomes evident that the issue extends beyond individual cases. Communities are feeling the strain, as those who come to the UK with dreams of a better life find themselves trapped in a cycle of poverty and exploitation. Organizations and community leaders are calling for stronger government checks and measures to address the abuse of the immigration system.

In response, a Home Office spokesperson emphasized the commitment to preventing abuse of the immigration system and stated that decisive action will be taken against employers who break the rules.

The UK issued over 170,000 skilled worker visas in the past year alone, with the health and care sector witnessing a significant increase in grants. However, the unfortunate reality is that many skilled worker visa holders are finding themselves without the promised opportunities, struggling to survive in a foreign land.

AUGUST 25, 2023

Chinedu Eze As dollar value rises against the naira, coupled with inflation, it has emerged that airfares may rise between N150, 000 and N250, 000 for one hour flight in domestic destinations, which will amount to over 100 per cent price increase. Currently average cost of flight is about N70, 000, however, it was learnt that this may double, following domestic airlines claim that they have been subsidising fares and recording losses in order to sustain air travel in Nigeria.

This week, the Spokesperson for Airline Operators of Nigeria (AON) and Chairman of United Nigeria Airlines, Prof. Obiora Okonkwo, said the high cost of operations, coupled with hike in aviation fuel, could lead to increase in the cost of air tickets, such that air passengers could pay as much as N250, 000 for one hour domestic flight.

He made this known during exclusive interview on Arise TV, the broadcast arm of THISDAY Newspapers. He disclosed that some airlines funds have been with banks because they are seeking for foreign exchange to acquire aircraft and ferry their airplanes for maintenance overseas. The National Bureau of Statistics (NBS) had also said that airfares skyrocketed by 40 per cent from June 2022 to June 2023, but this could be even more, following the recent projection of the cost of domestic flights by the Chairman of United Nigeria Airlines. The report indicated there was a month-on-month surge of 4.93 per cent in the average fare paid by air passengers for specific routes and on year-on-year basis, fares surged by 40.22 per cent compared to June 2022, when the average was N56,082.64.

On a regional basis, NBS stated that the North-Eastern region experienced the highest airfare in June 2023, with an average of N80,650.00, closely followed by the South-South at N80,000.00. But then the naira was exchanging N600/$1 to N700/$1 but now it hovers around N850/$1 and airlines indicated they may not continue to subsidize the cost of tickets because of enormous losses they incur, which may eventually drive them out of the market.

Consequently, the airline operators are urging government to take some measures to protect domestic airlines by providing them dollars for the maintenance and acquisition of aircraft, disclosing that the operators have been finding it difficult accessing foreign exchange, which is very critical in their type of business.

Okonkwo who warned that airfares would continue to be on the rise, said: “If you think tickets are expensive, then you probably don’t appreciate the sacrifices made by local operators. If we have to charge the fares, the way the costs are increasing every day, we should be paying not less than N250,000 from Lagos to Abuja.” Okonkwo called for special foreign exchange window for airlines and stressed the need for domestic carriers to access foreign exchange through a designated window facilitated by the Central Bank of Nigeria (CBN).

He also urged the newly appointed Aviation Minister, Festus Keyamo, to collaborate with other governmental bodies to identify and rectify obstructive elements within the system, especially currency speculators who artificially jerk up the exchange rate. “You have naira and you can’t convert it to the dollar. So, the solution to this is for our Minister to understand that we need a special window with the CBN to access foreign exchange,” he said. He expressed concern over the unjustifiably high cost of aviation fuel, attributing the excess charges to speculative practices. He called on the Nigerian National Petroleum Corporation (NNPC) Limited to play its part in stabilising the industry by curbing these practices, disclosing that even the fuel marketers are aghast at the rising exchange rate, which is making it very difficult for them to source for dollars and buy Jet A1.

“There is no reason, no matter the international price of crude oil that the aviation fuel should be delivered to the pump for more than N500. Everything you see on top of it is speculations and I am calling out on NNPC staff to set this country free. The aviation sector should be designated an essential sector,” he further said. Okonkwo therefore advocated for the designation of aviation as an essential sector because of the critical role it plays as catalyst in economic development of Nigeria, noting that without robust financing it would be difficult for airlines to sustain their operation and insisted that government must have to step in and intervene at this time.

Okonkwo also stated that without major maintenance facility in Nigeria it becomes inevitable for Nigerian airlines to ferry their aircraft overseas for maintenance but due to paucity of forex, airlines cannot take out their aircraft due for maintenance and this has inevitably reduced capacity, which consequently increased fares, as available aircraft seats cannot meet demand. The Chairman and CEO of United Nigeria Airlines who commended the Nigeria Civil Aviation Authority (NCAA), urged the new Minister not to interfere with regulations, which is a critical area that determines air safety and also canvassed for full autonomy of the regulatory authority, frowning at a situation where workers of NCAA were recruited from the Ministry of Aviation.

He said that the minister should collaborate with other Ministers, especially the Minister of Finance to find solution to currency speculation, which is spiraling the exchange rate. Drawing attention to the industry’s unique challenges, Okonkwo highlighted the currency disparity that local operators grapple with. Earnings in naira must cover significant dollar-denominated expenses, making the industry particularly vulnerable to currency fluctuations.

“The current minister should not interfere with the regulations. We had a very terrible past where the regulatory employees were given employment letters from the Federal Ministry of Aviation. That’s absurd and unacceptable. So, let the regulatory system remain. Also, look into the latest appointments that were made before the end of the last administration,” Okonkwo said.

About two years ago airfares went up to N50, 000 as base fare when a litre of fuel was increased from N180 per litre to N400. Currently a litre of aviation fuel is from N700 per litre and there are indications it will continue to raise, as naira loses value to the dollar. There are also fears that if there is no intervention for these airlines, fares would rise beyond the affordability of average air traveller, and this will also have a counter effect on airlines, a situation that may force them to suspend operation.