Foreign airlines and travel agents will begin sale of tickets to customers in US dollars starting from April 19, 2022. This is as a result of the shortage of foreign exchange in the country.

In a statement released by APG Interline E-Ticketing (IEG) in a travel advisory issued to its trade partners.

It stated, “Dear travel partners, warm greetings from APG. This is to bring to your notice that with effect from April 19, 2022, GP would only accept issuing of tickets in US dollars and not naira,” the advisory reads.

“This is mainly due to repatriation issues and the forex situation in the country. This would most likely be a temporary measure till the forex situation improves.

“Our sincere apologies for any inconveniences this may cause to you and your business. Thank you for understanding.”

The airlines to effect the new policy are those on APG Interline Electronic Ticketing (IET) GP code 275.

Airlines on the APG IET platform include South African Airways, Fly Dubai, Kenya Airways, Middle East Airlines, Royal Air Maroc, Rwandair, Thai Airways, Turkish Airlines, FrenchBee, EgyptAir, ASKY, Air Seychelles, Air Algerie and Air Namibia.

Air Panama, Air Burkina, Avianca, Bangkok Airways, Cabo Verde Airlines, Fiji Airways, Hong Kong Airlines, Malaysian Air, alongside other carriers, also use the platform.

Carriers on the APG IET platform that fly directly into Nigeria are South Africa Airways, Turkish Airlines, Asky Airlines, Egypt Air, Royal Air Maroc, Middle East Airlines, Rwanda Air and Kenya Airways.

Nigeria is running out of Foreign Exchange

Due to the Covid-19 pandemic in 2022 and Russian-Ukraine war earlier this year, Nigeria is one of the countries heavily affected by the fall in oil prices. The oil sector provides for 95% of Nigeria’s foreign exchange earnings and 80% of its budgetary revenues. The country relies on oil sales to earn foreign exchange.

Nigeria also known with its title as the Giant of Africa and the Largest Oil producer in Africa is running out of Foreign exchange and Central Bank of Nigeria unable to meet dollar demands in the country.

According to APG, the difficulty in repatriating airlines’ funds stuck in Nigeria and other countries, coupled with foreign exchange fluctuation, is responsible for the new policy.

Repatriation and Forex Shortage Situation in Nigeria

According to Investopedia, the term repatriation refers to the conversion or exchange of any foreign currency into one’s local currency. It also applies to the financial industry. For instance, repatriation commonly refers to the conversion of offshore capital back to the home currency of a corporation.

Foreign airlines have significant local currency that they are unable to convert and repatriate. It should be noted that foreign airlines are required to pay taxes for all foreign transactions in the currency that the payment was made. For example, if a Nigerian travelling to America should pay for a round trip ticket via Delta Air lines in naira then the Airline is required to pay taxes in Nigeria currency.

Airline tickets to be repatriated are quoted in dollars and a function of forex availability. Forex is not available for the airlines to repatriate, which is why foreign airlines plans to issue tickets in dollars.

When the sales of airline tickets takes effect from April 19, travellers will need to source for foreign exchange from Nigerian banks which might be a bit difficult or buy from the black market at a high rate the black market exchange rate of the dollar would finally cross N600. This will result in the sale of foreign airline tickets at double the price it was previously sold. Just last month there was an increase in local airfare tickets from 25,000 naira to 50,000 naira due to the scarcity of Jet A1 fuel otherwise known as Aviation fuel.

In the past few months, many Nigerians have travelled out of the country to the UK, US, Canada, and the rest of Europe for greener pasture. If foreign airline continue with the sales of tickets to Nigerians in dollars, we expect to see the black market rate of the dollar to naira to hit 600 naira per dollar. Alternatively, some Nigerians might consider buying their tickets from travel agencies based overseas.

Source: https://yinksmedia.com/why-foreign-airlines-plan-to-sell-tickets-to-nigerians-in-dollars/

neocolonialism. Nigeria government is just doing what USA government asked them to do in order to make USD stronger and save it from dying

EeGooBetter:
neocolonialism. Nigeria government is just doing what USA government asked them to do in order to make USD stronger and save it from dying

the economics they taught you in secondary school just wasted. Go to apapa. The ships that bring petrol, food and other products to Nigeria often go back empty. We give the world nothing except crude oil. The airlines are not to blamed . Its economic reality