Dollar Scarcity Crippling Airline Business In Nigeria, Expert Reveals Solution

Dollar scarcity in Nigeria is crippling airline business within the country, the Deputy Managing Director of an aircraft serviceability firm, 7Star Global Group, Air Commodore Simon Okwuokei (retd), has revealed.

In a report on Tuesday, Okwuokei said that domestic airline operators are struggling to obtain foreign exchange (forex), and foreign airlines are also facing the same challenge. 

He said aviation operation is Dollarised, the reason the inability to access the United States currency is impeding the growth of the industry. 

Prime Business Africa understands that the scarcity of Dollars has led to a hike in the cost of buying the USD at the official and black market, with the former selling above N463/$1 and the latter offering the American greenback above N730 when it’s available. 

This has caused the cost of operation in the aviation industry to skyrocket, and it becomes worse when Airlines are unable to obtain the forex through official markets – they have to depend on the black market to hasten collation.

Providing a solution to the scarcity, Okwuokei said should Europe, the Middle East, United Arab Emirates (UAE) among other foreign countries open their international airspace to Nigerian-owned airline operators, the issue of forex scarcity will be resolved. 

“Whether you are buying from China, Europe or America, you will need forex to pay for spares, consumables and to acquire equipment. You will need dollars to pay for maintenance and nearly everything you are doing. It is mostly dollarized and if you buy in Europe, you will pay in euros. So, to that extent and to the extent that we are having a forex issue as a country, we have a challenge. 

“I am sure you are aware of the challenges being faced by some big international carriers like Emirates in having to get their money back. It is because of the scarcity of forex in our economy. It is not just about us. It affects the entire aviation industry. You see airlines that operate for a few weeks or months, then, when they have a challenge, they are on the ground for quite some time. The reason is not that they don’t want to work, but they need spares. 

“They may have the money in naira, but to get it in dollars, which is the acceptable means of transaction, is not there and there is nothing you can do about it. You cannot put an unserviceable aeroplane in the air. As the saying goes, ‘There is no parking space in the air.’ So, you have to work with what you have in the country, we pray that soon, the economic situation in the country will improve to make us operate as we desire to do,” he told Nairametrics.