Amid Nigeria’s foreign exchange crisis, Emirates announces plan to reduce flights to the West African country
Emirates said it would reduce flights to Nigeria due to the ongoing dollar shortage crisis which has made it difficult for foreign airlines to repatriate their earnings.
In a letter addressed to Nigeria’s Aviation Minister Hadi Sirika, Emirates explained it would reduce the number of flights from 11 to 7 starting from the middle of this month.
“We have no choice but to take this action, to mitigate the continued losses Emirates is experiencing as a result of funds being blocked in Nigeria,” the letter said in parts according to Reuters.
Note that Emirates has long been vocal about the difficulties it’s been facing trying to repatriate its earnings from Nigeria back to Dubai. As of last month, the company said it had about $85 million stuck in the Nigerian economy.
Efforts to resolve the problem have yielded little or no result. Meanwhile, the challenge has continued to impact Emirates’ commercial viability in Africa’s most populous country.
Unfortunately, Emirates is not the only foreign airline having this challenge. Many foreign airlines operating in Nigeria are having extreme difficulties repatriating their earnings due to the country’s worsening foreign exchange crisis. Recall that Business Insider Africa earlier reported that as much as $450 million worth of the foreign airlines’ earnings were withheld by the Nigerian Government as of May 2022.
There is a strong possibility that other foreign airlines will soon follow in the footsteps of Emirates by reducing flights to Nigeria. But then again, this wouldn’t be the first time this would happen. In 2016, some foreign airlines were forced to reduce flights to the country or close shop altogether due to a similar forex crisis.
In the meantime, Nigeria’s forex crisis has continued to deteriorate. The currency traded at N695 to a dollar on the black market as of August 1st, 2022.
There are now concerns that the naira could hit N1000 to the dollar before year-end, given the current rate of depreciation.
As you may know, Nigeria earns most of its foreign exchange through crude oil sales. But a chronic oil theft crisis in the Niger Delta has been blamed for disrupting how much oil the country is able to sell, and hence how much dollars it’s been able to earn recently. And in a desperate bid to address the dollar shortage, the Central Bank of Nigeria is restricting access to and prioritising who can access dollars.
