Managing Director of Nigerian Aviation Handling Company (NAHCO aviance), Norbert Bielderman, has said that the federal government’s decision to postpone the 2015 general elections by six weeks has started taking its depressing toll on the economy as the controversial postponement has made the country to lose a whopping N400 billion ($2billion).
Bielderman made this known while giving a keynote address at this year’s Nigeria Cargo Summit in Lagos hence describing 2015 as a crucial year in the Nigeria’s economy because of elections and its associate intrigues.
The NAHCO Chief said there was no surprise that the economy has been badly hit and worsened by the election postponement.
He said the postponement of elections in Nigeria has brought about loss of confidence for existing and new investments which have found their destinations to other countries.
The travel bans slammed by the European countries has also contributed to the huge loss.
His words: “There has been travel bans from many European countries and this has negatively impacted the aviation sector. Nigeria’s foreign reserves are significantly depleted and our national account is in deficit. The crash in oil price and consequent impact on the nation’s revenue earnings, exchange rate move from N155/$ to N205/$ within a 6-month period at the interbank and Central Bank of Nigeria’s final closure of the RDAS is a testament to the fact that all is not well with our economy.
“Implicitly, Naira has been devalued to between 30-40% and this will necessary cause inflation if government does not put in place deliberate measures to militate against an upsurge in price across industry.
“We expect they would save rather than spend in months ahead due to rising cost of living, potential job losses, rising children school fees etc. Also, the travel warnings and/ or ban from European Union countries for their citizens coming into Nigeria has assured that many flights from Europe to Nigeria have been either flying half empty to near empty.
“We expect inflation to rise up to 10% or more soon. Furthermore, the cost of fund have also significantly risen with bank interest rates now up to about 26%. This will lead to massive job losses within the private sector and for them to survive this trying time. In Aviation, the domestic airlines would be worst hit because of current ticket prices are not in sync or responsive to current realities. This is due to unhealthy price wars and pursuit of market dominance at the domestic side of airline business.
Speaking on the expensive nature of running airlines in Nigeria, Bielderman declared: “Domestic air tickets are still significantly low despite increase in airport charges, taxes etc. These domestic carriers still maintain their aircraft in USD and aviation fuel has not significantly been reduced if at all. In our opinion, we suggest that these domestic airlines come together and agree a base rate for air tickets in order not to compromise safety and the regulator would do well to step in and analyze their current book positions and act accordingly. Nigeria cannot afford another air mishap!
“The negative factors that I have posited prior that limits aviation this current year may be summarized to include Naira Depreciation , High Exchange Rate , High Interest Rates , unreasonable Domestic Air Tickets , Elections and associate Violence , Political Economy – Static Aviation Fuel Price , High Airport Taxes, Charges, Ground Rents and Concession Fees. Aviation business like any other business is set up to make profit and to create shareholder value and these negative supervening factors may lead to cost saving methods that may compromise service standards and safety. “