Dominance of Foreign Airlines in Nigeria causing Capital Flight and Trade Imbalance – Expert

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The air transport industry is not only a vital engine of global socio-economic growth but is also of vital importance as a catalyst for economic development, creating direct and indirect employment, supporting tourism and local businesses, and stimulating foreign investment and international trade.

According to International Civil Aviation Organisation(ICAO), since 1995, the world economy, measured in terms of gross domestic product (GDP), grew at 2.8 per cent annually while the world passenger air traffic (expressed in Revenue Passenger-Kilometres) increased at an average annual growth rate of 5.0 per cent.

In line with this, recently speaking to the press, a stakeholder and expert in the aviation industry, Chief Executive Officer of African Aviation Services, Nick Fadugba, has said that if good policies are put in place, the aviation industry can be a catalyst for economic growth and social advancement of the Nigerian nation and Africa at large.

The aviation sector, he said, can flourish as well as positively contribute to the boosting of the economy thus, he urged the Federal Government to provide more support for the growth of the aviation industry.

He said it was imperative to ensure that positive investment driven policies are put in place to develop the aviation sector.

“Nigeria’s problem is not just in making policies, but that the policies that are made are ineffective and so, they somersault. Aviation in Nigeria, if properly harnessed, could become one of the keys to Nigeria’s future prosperity. The sector is indispensable to the socio-economic development of the country,” Fadugba said.

He indicated that in the last 25 years, the Nigerian carrier passenger traffic has reduced from 60 percent to 20 percent and stressed the need for government to review Bilateral Air Service Agreements (BASA) and also consult with indigenous carriers before allowing frequencies, as they are treated like oil blocks.

Fadugba bemoaned a situation where over 90 percent of international air traffic to and from Nigeria is done by foreign airlines.

This is capable of causing damage to the economy in several ways like the huge capital flight from Nigeria, the continued deterioration of the Nigerian aviation industry, and the loss of skilled aviation employment opportunities.”

Fadugba pointed out that lack of local airlines operation was hugely hampering growth of aviation in Nigeria explaining that there was a negative balance of trade.

A situation where foreign airlines operate in virtually all Nigerian airports without Nigerian airlines reciprocating amounts to a negative balance of trade, noting that the liquidation of Nigerian Airways has put a stumbling block on the development of aviation in the country.”

Reiterating the importance of effective policies to be put into place, Fadugba said air transport plays a pivotal role in facilitating integration into the global economy and provides vital connectivity on a national, regional, and international scale.


By Joyce Mukucha

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