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Foreign Airlines Demand Standard FX Rate

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Foreign Airlines
  • Foreign Airlines Demand Standard FX Rate

International carriers that operate to different destinations in the country have called on the federal government to give them standard exchange rate for the repatriation of revenues earned from ticket sales or they would be forced to leave Nigeria.

The Sales Manager of Emirates Airlines, Eghe Ekhator, issued the threat, why explaining the reasons why the airline decided to stop operations to the Federal Capital Territory (FCT) from October 22, 2016 during the on-going public hearing on how to revamp the aviation industry organised by the House Committee on Aviation.

Ekhator explained that due to the flunctuating value of the naira, when they sell ticket in the local currency, by the time they will exchange it to the dollar, it would lose its value. He said that the airlines have decided that the only way they could continue to operate in Nigeria would be for government to peg the naira for the airlines.

The House Committee Chairman on Aviation, Hon. Nkiruka Onyejeocha said the House was worried about the suspension of flights to Nigeria by foreign airlines and the number of domestic carriers that had gone under, noting that there are indications that more might stop operation.

Asked why Emirates decided to stop its operations to Abuja, Ekhator said: “The challenge we are facing is not unique to Emirates. The major point is forex. Another problem is the runway at the Abuja airport. The runway issues may be addressed but for now it is still a concern.

“Another problem is aviation fuel. There is no long- term assurance, which means that a flight can come and it won’t have fuel to depart. Emirates is losing money running into millions of dollars. The delay before we exchanged the ticket sales reduces its value because the naira is not pegged. For example, if you sell ticket for $1000 and collect its equivalence in naira by the time you exchange it you may have only $600 dollars because of the floating exchange rate. So the foreign airlines are losing millions of dollars this way. That is why some are considering pulling out their operations,” he said.

Onyejeocha however suggested that the government should introduce and implement policies that would enable airlines both foreign and local have profitable operation in Nigeria, noting that the foreign airlines are requesting for fixed rate of the naira for them so that they could exchange their money without losing any value.

At the public hearing, the Managing Director of Chanchangi Airlines, Trevor Worthington identified the challenges facing airlines in Nigeria and noted that the one of the major problem of the airlines is low aircraft utilisation due to poor infrastructure.

According to him, while aircraft in other parts of the world could operates for 22 hours, in Nigeria airlines hardly get up to 12 hours. He also noted that multi-taxation, high cost of aviation fuel and the fact that international operators are allowed to operate to many airports in the country, thereby discouraging code-share between foreign carriers and domestic operators.

Worthington urged the federal government to make a policy that foreign airlines should code-share with Nigeria airlines that meet their safety standard.

Speaking in the same vein, the Director of Engineering, Medview Airline, Lookman Animaseun said that many Nigerian airlines are now in the International Air Transport Association (IATA) registry as they have become certified after going through the stringent IATA Operational Safety Audit (IOSA), which qualifies them to code-share with any airline in the world.

Animaseun urged government to stop the multiple designation of foreign airlines and to facilitate the establishment of a major Maintenance, Repair and Overhaul (MRO) facility in Nigeria.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Peter Obi Advocates for Full Government Backing of Dangote’s $21bn Refinery Project

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Peter G. Obi

Peter Obi, a prominent Nigerian politician and public figure, has called for unwavering support for the Dangote Refinery amid recent conflicts between Dangote Industries and government agencies.

In a passionate appeal, Obi said the current disputes extend beyond political and personal differences, touching upon the broader interests of Nigeria’s economy and its future prosperity.

In his statement on X.com, Obi highlighted the refinery’s immense potential to drive economic growth and create employment opportunities.

With an estimated annual revenue potential of approximately $21 billion and the capacity to generate over 100,000 jobs, the Dangote Refinery represents a cornerstone of Nigeria’s industrial advancement and economic stabilization.

“The recent challenges faced by Dangote Industries should not overshadow the vital role this enterprise plays in our national economy,” Obi asserted.

“Alhaji Dangote’s contributions are monumental, and it is essential that we rally behind his ventures, particularly the refinery, which is set to make a significant impact on our fuel crisis and foreign exchange earnings.”

The refinery, with its strategic importance, stands as a beacon of hope for Nigeria’s fuel supply and overall economic development.

It is poised to address long-standing issues in the energy sector, provide substantial revenue streams, and enhance the country’s economic resilience. Given these benefits, Obi stressed that any actions hindering the refinery’s operation would be counterproductive.

Obi also commended Alhaji Dangote for his remarkable achievements across various sectors, including cement, sugar, salt, fertilizer, infrastructure, and more.

“Alhaji Dangote embodies patriotism and commitment to Nigeria’s growth. His extensive industrial activities are not only a testament to his entrepreneurial spirit but also a vital contribution to Nigeria’s economic landscape,” he added.

Despite the challenging business environment, Dangote’s diversified industrial investments demonstrate a commitment to Nigeria’s industrialization and job creation.

Obi urged the Federal Government and its agencies to offer full support to Dangote Industries, recognizing the broader economic benefits and the positive impact on national welfare.

“The success of Dangote Industries is intrinsically linked to the success of Nigeria and Africa as a whole. We cannot afford to let such a crucial enterprise falter,” Obi warned. “Every sensible and patriotic government should view enterprises like Dangote Industries as national treasures that deserve robust support and protection.”

Obi’s appeal underscores the critical need for collaboration between the government and private sector leaders to ensure the successful operation of key projects like the Dangote Refinery.

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Dangote Accuses NNPC and Oil Traders of Secret Operations in Malta

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Aliko Dangote, chairman of Dangote Industries Limited, has leveled serious allegations against personnel from the Nigerian National Petroleum Company (NNPC) Limited and certain oil traders.

Speaking at a session with the House of Representatives, Dangote claimed that these parties have established a blending plant in Malta, raising concerns about the integrity of Nigeria’s fuel supply.

Dangote described the blending plant as lacking refining capability, instead focusing on mixing re-refined oil with additives to produce lubricants.

“Some of the terminals, some of the NNPC people, and some traders have opened a blending plant somewhere off Malta,” he stated.

He emphasized that these activities are well-known within industry circles.

Addressing the drop in diesel prices, Dangote argued that locally produced diesel, with sulfur content levels of 650 to 700 parts per million (ppm), is superior to imported variants.

He linked numerous vehicle issues to what he described as “substandard” imported fuel.

He called for the House of Representatives to set up an independent committee to investigate fuel quality at filling stations.

“I urge you to take samples from filling stations and compare them with our production line to inform Nigerians accurately,” Dangote insisted.

The accusations come amid an ongoing dispute between the Dangote Refinery and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

Farouk Ahmed, NMDPRA’s chief executive, had previously claimed that local refineries, including Dangote’s, were producing inferior products compared to imports.

Also, the House of Representatives has initiated a probe into allegations that international oil companies are undermining the Dangote Refinery’s operations.

In response to the escalating tensions, Heineken Lokpobiri, the Minister of State for Petroleum Resources, intervened by meeting with key stakeholders including Dangote, Ahmed, and other top officials from the Nigerian petroleum regulatory bodies.

The discussions aimed to address claims of monopoly against Dangote, which he has strongly denied, and to ensure that all parties operate transparently and fairly.

This development highlights the complex dynamics within Nigeria’s oil industry. The allegations and subsequent investigations could impact market stability and investor confidence.

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Africa’s Richest Man, Aliko Dangote Ready to Sell Refinery to Nigerian Government

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Dangote refinery

Aliko Dangote, Africa’s wealthiest entrepreneur, has announced his willingness to sell his multibillion-dollar oil refinery to Nigeria’s state-owned energy company, NNPC Limited.

This decision comes amid a growing dispute with key partners and regulatory authorities.

The $19 billion refinery, which began operations last year, is a significant development for Nigeria, aiming to reduce the country’s reliance on imported fuel.

However, challenges in sourcing crude and ongoing disputes have hindered its full potential.

Dangote expressed frustration over allegations of monopolistic practices, stating that these accusations are unfounded.

“If they want to label me a monopolist, I am ready to let NNPC take over. It’s in the best interest of the country,” he said in a recent interview.

The refinery has faced difficulties with supply agreements, particularly with international crude producers demanding high premiums.

NNPC, initially a supportive partner, has delivered only a fraction of the crude needed since last year. This has forced Dangote to seek alternative suppliers from countries like Brazil and the US.

Despite the challenges, Dangote remains committed to contributing to Nigeria’s economy. “I’ve always believed in investing at home.

This refinery can resolve our fuel crisis,” he stated, urging other wealthy Nigerians to invest domestically rather than abroad.

Recently, the Nigerian Midstream and Downstream Petroleum Regulatory Authority accused Dangote’s refinery of producing substandard diesel.

In response, Dangote invited regulators and lawmakers to verify the quality of his products, which he claims surpass imported alternatives in purity.

Amidst these challenges, Dangote has halted plans to enter Nigeria’s steel industry, citing concerns over monopoly accusations.

“We need to focus on what’s best for the economy,” he explained, emphasizing the importance of fair competition and innovation.

As Nigeria navigates these complex issues, the potential sale of Dangote’s refinery to NNPC could reshape the nation’s energy landscape and secure its energy independence.

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