Nigeria dollar squeeze hits global airlines.
By Eric on Friday,
Foreign airlines area unit halting flights to the Federal Republic of Nigeria, wherever a foreign exchange crisis has led the govt. to limit access to dollars, Nigeria dollar squeeze hits global airlines.
US carrier United Airlines has said it’ll finish daily flights between Houston, Texas and Nigeria’s commercial capital, Lagos, on 30 June.
It follows Spanish airline Iberia’s decision to pull comes in may.
Falling oil costs have hurt Africa’s biggest economy, which has narrowed for the primary time since 2004.
About Nigeria dollar squeeze hits global airlines as a results of the foreign currency restrictions, airlines have been unable to repatriate up to $600m (£417m) in ticket sales, according to the International air transport Association (Iata).
Foreign currency reserves have dwindled to their lowest level in more than 10 years and the government introduced a currency peg last year that has created a black market for the Naira currency.
“The inability of airlines to use forex in Africa’s largest economy, if not resolved, can affect air transport services to, from and within African countries and undermine the country’s position as West Africa’s aviation hub,” Iata said on about Nigeria dollar squeeze hits global airlines.
Iberia said it was feat Nigeria thanks to “very difficult operating circumstances and dwindling traveler numbers.”
Businesses operating in Nigeria are struggling to get their hands on dollars, sterling or euros, says the BBC’s West Africa correspondent Martin Patience. The official exchange rate that is controlled by the govt. is additionally very low compared to the deals on the side rate.
“If you take $1, the official rate is 200 Naira however if you then go on the black market wherever you will get the cash it will often cost you double that and airlines…simply cannot go on the black market to get business done,” says Patience.
Nigeria’s economy contracted 0.4% in the first quarter of this year and last month Nigeria’s central bank governor said a recession appeared “imminent.” The central bank additionally announced plans to introduce a greater flexibility into the foreign exchange market.