The International Air Transport Association (IATA) yesterday warned that Nigeria is at risk of losing 2.2 million overseas-bound passengers and $434 million revenue loss, if the coronavirus spread continues to escalate.
The association that represents some 290 airlines said the gloomy outlook was not peculiar to Nigeria, but spreads across the region and warrant emergency support for the airlines.
IATA, in a market analysis released Thursday, appealed to governments in Africa and the Middle East, to provide emergency support to airlines as they fight for survival due to the evaporation of air travel demand as a result of the covid-19 crisis.
IATA had published on March 5, the disruptions from covid-19 could result in 853,000 loss in passenger volumes and $170 million loss in base revenues in Nigeria.
The disruptions to air travel could also put at risk over 22,200 jobs in the country. If the situation spreads further, approximately 2.2 million passengers and $434 million of revenues could be lost.
IATA’s Director General and Chief Executive Officer (CEO), Alexandre de Juniac, said stopping the spread of covid-19 is the top priority of governments.
“But they must be aware that the public health emergency has now become a catastrophe for economies and for aviation. The scale of the current industry crisis is much worse and far more widespread than 9/11, SARS or the 2008 Global Financial Crisis.
“Airlines are fighting for survival. Many routes have been suspended in Africa and Middle East and airlines have seen demand fall by as much as 60 per cent on remaining ones. Millions of jobs are at stake. Airlines need urgent government action if they are to emerge from this in a fit state to help the world recover, once covid-19 is beaten,” de Juniac said.
Extensive cost cutting measures are being implemented by the region’s carriers to mitigate the financial impact of covid-19. However, due to flight bans as well as international and regional travel restrictions, airlines’ revenues are plummeting—outstripping the scope of even the most drastic cost containment measures.
With average cash reserves of approximately two months in the region, airlines are facing a liquidity and existential crisis. Support measures are urgently needed. On a global basis, IATA estimates that emergency aid of up to $200 billion is required.
Options proposed by IATA include: direct financial support to passenger and cargo carriers to compensate for reduced revenues and liquidity attributable to travel restrictions imposed as a result of covid-19.
Loans, loan guarantees and support for the corporate bond market by governments or central banks. “The corporate bond market is a vital source of finance, but the eligibility of corporate bonds for central bank support needs to be extended and guaranteed by governments to provide access for a wider range of companies.”
Also, rebates on payroll taxes paid to date in 2020 and/or an extension of payment terms for the rest of 2020, along with a temporary waiver of ticket taxes and other Government-imposed levies.
IATA Regional Vice President Africa, Middle East, Muhammad Al Bakri, said several governments in Africa and the Middle East had already committed national aid for covid-19 including Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Egypt, Nigeria and Mauritius.
“Our demand is that airlines, which are essential to all modern economies, are given urgent consideration. This will help keep them alive and ensure airline staff – and people working in allied sectors – have jobs to come back to at the end of the crisis. It will enable global supply chains to continue functioning and provide the connectivity that tourism and trade will depend on if they are to contribute to rapid post-pandemic economic growth,” Al Bakri said.
International bookings in Africa are down roughly 20 per cent in March and April, domestic bookings have fallen by about 15 per cent in March and 25 per cent in April, according to the latest data
African airlines had lost $4.4 billion in revenue as at 11 March 2020. Ticket refunds have increased by 75 per cent in 2020 compared to the same period in 2019.
FCCPC: Electricity Topped Consumers’ Complaints In 2020
The Federal Competition and Consumer Protection Commission (FCCPC) says it received the highest consumer related complaints from the electricity sector in 2020.
Speaking in Abuja on Sunday, Babatunde Irukera (pictured), chief executive officer of FCCPC, said the banking and telecommunication sectors ranked second and third respectively on the complaints chart.
He added that the aviation sector was ranked fourth.
“Our complaints resolution team is still a very small team of people and they are dealing with thousands of complaints,” Irukera said.
“We are looking at expanding capacity to have more hands handling the complaints but the real game changer in handling complaints better and faster is for companies to start doing it.
“The person who has the least open complaint in our resolution team has about 800 complaints across sectors and that is one person. If you multiply it by 12 to 15 persons, you will imagine the number of complaints.
“Being able to expand to a point where we are able to operate more efficiently, we will keep training, leveraging technology, the more we leverage technology, the more efficiently we can do our work.”
The commission was established by the 2018 Federal Competition and Consumer Protection Act (FCCPA) to promote fair, efficient and competitive markets in the Nigerian economy, facilitate access by all citizens to safe products, and protect the rights of all consumers in Nigeria.
FEC Approves CBN’s Request To Renovate National Theatre For N21b
Lai Mohammed, minister of information and culture, said on Wednesday that the Federal Executive Council (FEC) has approved a memorandum of understanding (MoU) between the Central Bank of Nigeria (CBN), and the ministry of information and culture for the renovation of the National Theatre in Iganmu, Lagos.
He spoke at the end the weekly FEC meeting in Abuja.
The federal government, on July 12, 2020, handed over the national theatre to CBN and the bankers’ committee to signify the kick-start of the renovation process.
“This is a landmark approval because, it has paved the way for investment in the creative industry as part of the resolve of this government to create at least one million jobs in the next three years in the creative industry,” Mohammed said.
“The CBN and banker’s committee are willing to invest N21.894 billion to renovate, refurbish and commercialization (run it profitably) of the national theatre complex. The MoU has a life span of 21 years after which it will revert back to government.”
The minister assured that no job will be lost after the national theatre is renovated, adding that the “brand new national theatre, an event centre” will instead create more jobs.
Asides from this, FEC approved about N9.43 billion to complete the digital switch over (DSO) in broadcasting; N8.98 billion for a new national ICT park in the federal capital territory (FCT) to coordinate public and private ICT hubs in Nigeria.
The council also approved a new national policy on aging which would take care of the needs of the aged people across Nigeria; approved the ministry of water resources memo to construct Damaturu water supply project in Yobe state worth N8.43 billion.
Adesina identifies Debt Service As Greatest Risk To Nigeria
The President of African Development Bank (AfDB), Dr. Akinwunmi Adesina, has warned that debt service is Nigeria’s greatest risk, even as he urged the federal government to take steps to increase tax revenue in the face of dwindling oil income.
The Director of Communications and Liaison of the Federal Inland Revenue Service (FIRS), Mr. Abdullahi Ahmad, stated that he spoke virtually at the recently held First Annual National Tax Dialogue .
Dr. Adesina was quoted as saying that due to the impact of the COVID-19 pandemic, Nigeria’s economy shrank “by 3% in 2020 on account of falling oil prices and the effects of the lockdowns on economic activities,” adding, “with shrinkage in oil revenues, debt service payments pose the greatest risk to Nigeria.”
He stressed further that for Nigeria to overcome the pandemic, “taxes must form a significant percentage of government revenue. Digitalization of tax collection and tax administration is critical to ensure greater transparency of the tax system, widening of the tax base, while mitigating compliance risks and encouraging voluntary tax compliance.”
Tax experts and stakeholders at the event called for the automation of tax collection by the FIRS through data and intelligence in order to ease tax collection, as well as, improve revenue.
Executive Secretary, African Tax Administration Forum (ATAF), Mr. Logan Wort, harped on the place of technology in generating revenue for the country in a post-Covid economy.
Mr. Wort, who joined the dialogue virtually from South Africa, stated, “Domestic Resource Mobilisation (DRM) is expected to contribute at least 75% to 90% on average per country” in the post-Covid era, adding that Nigeria and other African countries should note, “improved tax revenue will have to take prime position” in the scheme of things.
He urged Nigeria to pay serious attention to e-commerce and the digital economy sector where big, trans-national digital conglomerates like Google, Netflix and Uber operate and make huge, tax-free profits as a possible way of increasing tax revenue generation.
He said Nigeria should borrow a leaf from Ghana in e-commerce taxation, projected to fetch Ghana $450 million in annual tax revenue.
Ekiti State Governor, Dr. Kayode Fayemi, who was chairman of the Dialogue, was quoted as lauding the FIRS “for its performance in the 2020 fiscal year, despite operating in the most challenging period. The Service not only collected N4.9 trillion in taxes, achieving 98% of its target; only 30.6% of this was attributed to Petroleum Profits Tax, from what used to be over 50%”.
He urged participants to, “interrogate how Nigeria can further deepen the use of technology to improve tax compliance nationally and across sub-nationals.”