- Nigeria Lost N48bn to Operational Hiccups in Aviation Sector in 2016
It has been projected that airlines, air travellers and aviation agencies lost about N48 billion in 2016 to operational hiccups, inadequate supply of aviation fuel and the attendant high prices.
These losses were said to have been incurred by passengers who lost businesses due to flight delays and cancellations; airlines that cancelled flights after expending money on logistics and equipment and aviation agencies that lost accruals on charges because of limited flight traffic due to paucity of the product.
Industry operators who spoke on the condition of anonymity, said that the losses were really difficult to quantify because it made travellers to lose confidence in the airlines, which the travellers have to pay almost double what they used to pay because the airlines have to pass exorbitant prices of aviation fuel to the passengers.
A chief executive officer of one of the airlines, explained: “Honestly we are trying our best to pass the cost of aviation fuel to the passengers; otherwise, we will not be able to operate. We cancelled flight last Sunday. We waited for two hours for aviation fuel, by the time the product came it was late to travel to our destination because that airport does not have airfield lighting so we cannot land there after 6:00 pm. We rescheduled the flight the following day at extra cost to the airline and the passengers,” he said.
The official noted that flight delays and cancellation make people lose their business appointments, scheduled business meeting and disorganize many other things lined up to be accomplished.
“It has a debilitating effect on the economy. We see huge increases in the cost of aviation fuel and we pass that cost to the customers or we will be out of business. Now passengers are rushing to the airports because of the season, but what happens in January after the Yuletide season?” the official asked.
The Director of Consumer Directorate of the Nigerian Civil Aviation Authority (NCAA), Adamu Abdullahi said passengers are bearing the brunt of aviation fuel scarcity and high prices.
“The traveller cannot meet up with his appointment. On international flights their bags are left behind because the aircraft will have to take more fuel and they cannot leave their bags so they wait for them to arrive. The airlines cannot even be held responsible because we have what we call force majure. The aviation fuel scarcity issue is even beyond the aviation industry,” Abdullahi said.
He noted that the essence of travelling by air is the gain the advantage of speed but this is defeated when the passengers spend hours to even board a flight and sometimes the flight is cancelled.
“The airlines don’t make money when aircraft are on the ground. So the airlines are losing and NCAA is also losing because the five percent charge is deducted from the ticket that has already been used,” he said.
A major operator said that although airlines pass the high aviation fuel price to the passengers but they don’t pass everything to the travellers; because if they do the price of air ticket would go beyond the reach of many of the citizens that are currently travelling by air.
“It will be very difficult to put figures on the losses because it is enormous. Every airline that cancels flight has lost the confidence of his passenger. A passenger who experiences flight cancellation or delay will share his experience with others. So anytime you delay you lose a passenger and if it is international flight, the delay may make you lose your landing slot, which means you will have to cancel the flight. When you delay for a certain number of hours you will have to lodge your passengers in a hotel and if you are operating a chartered flight you will still have to pay for the time you did not fly the aircraft.
“I think that the only people who may be gaining in all these are the oil marketers; all others are losing. The country is losing, the airlines are losing and the aviation agencies are also losing. The economic loss is too enormous,” the operator said.
Aviation fuel scarcity started in January till December this year and it is in 2016 that the product was sold as high as N240 to N310 per litre.
Even now that the Nigerian National Petroleum Corporation (NNPC) has announced that it had imported about 123,000 tons of the products, airlines believe that it would still take time before the product arrives Nigeria.
“It is a little too late, one of the airline bosses said.
Increased Demand Paves The Way for Expansion of Africa’s Sugar Industry
Africa, June 2021: A new focus report produced by the Oxford Business Group (OBG), in partnership with the International Sugar Organization (ISO), explores the potential that Africa’s sugar industry holds for growth on the back of an anticipated rise in regional demand. The report was presented to ISO members during the MECAS meeting at the Organization’s 58th Council Session, on June 17th 2021.
Titled “Sugar in Africa”, the report highlights the opportunities for investors to contribute to the industry’s development by helping to bridge infrastructure gaps in segments such as farming and refining and port facilities.
The report considers the benefits that the African Continental Free Trade Area (AfCFTA) could deliver by supporting fair intra-African sugar trade efforts and bringing regulatory frameworks under a common umbrella, which will be key to improving competitiveness.
The increased international focus on ESG standards is another topical issue examined. Here, the report charts the initiatives already under way in Africa supported by green-focused investment with sustainability at their core, which will help to instil confidence in new investors keen to adhere to ESG principles in their decision-making.
In addition, subscribers will find coverage of the impact that Covid-19 had on the industry, with detailed analysis provided of the decrease in both worldwide sugar production and prices, as movement restrictions and social-distancing measures took their toll on operations.
The report shines a spotlight on sugar production in key markets across the continent, noting regional differences in terms of output and assessing individual countries’ roles as net exporters and importers.
It also includes an interview with José Orive, Executive Director, International Sugar Organisation, in which he maps out the particularities of the African sugar industry, while sharing his thoughts on what needs to be done to promote continental trade and sustainable development.
“The region is well advanced in terms of sugar production overall, but several challenges still hinder its full potential,” he said. “It is not enough to just produce sugar; producers must be able to move it to buyers efficiently. When all negotiations related to the AfCFTA have concluded, we expect greater investment across the continent and a clearer regulatory framework.”
Karine Loehman, OBG’s Managing Director for Africa, said that while the challenges faced by Africa’s sugar producers shouldn’t be underestimated, the new report produced with the ISO pointed to an industry primed for growth on the back of anticipated increased consumption across the continent and higher levels of output in sub-Saharan Africa.
“Regional demand for sugar is expected to rise in the coming years, driven up by Africa’s population growth and drawing a line under declines triggered by the Covid-19 pandemic,” she said. “With sub-Saharan Africa’s per capita sugar consumption currently standing at around half of the global average, the opportunities to help meet increasing domestic need by boosting production are considerable.”
The study on Africa’s sugar industry forms part of a series of tailored reports that OBG is currently producing with its partners, alongside other highly relevant, go-to research tools, including a range of country-specific Growth and Recovery Outlook articles and interviews.
Global Demand for Investment Gold Plunged by 70% YoY to 161 Metric Tons in Q1 2021
Last year, investors flocked to gold as stock markets crashed on a gloomy economic outlook due to the spread of the COVID-19 pandemic. In the second quarter of 2020, global demand for investment gold surged to over 591 metric tons, the second-highest level since 2016. However, the investors’ demand for gold has dropped significantly this year.
According to data compiled by AksjeBloggen, global demand for investment gold plunged by 70% year-over-year to 161 metric tons in the first quarter of 2021.
The Lowest Quarterly Figures after Record Gold Investments in 2020
In 2016, the global gold demand amounted to 4,309 metric tons, revealed Statista and the World Gold Council data. By the end of 2019, this figure rose to 4,356 metric tons. Investment gold accounted for 30% of that amount. Worldwide gold jewelry demand volumes reached 2,118 metric tons that year. Central banks and technology followed with 648 and 326 metric tons, respectively.
Statistics show the global demand for investment gold surged amid the COVID-19 outbreak, growing by 35% YoY to almost 1,800 metric tons in 2020. Demands for gold used in technology also rose by 17% to 383.4 metric tons, while central banks and other institutions bought 326.2 metric tons of gold in 2020, a 50% plunge in a year.
However, after record gold investments in 2020, the global demand for gold for investment purposes dropped to the lowest quarterly level in years.
The Price of Gold Dropped by 5% Since January
The average gold value tends to increase during a recession, making it an attractive investment in uncertain times. In February 2019, a troy ounce of gold cost $1,320.07, revealed the Statista and World Gold Council data. By the end of that year, the price of gold rose to $1,479.13.
The gold price continued growing throughout 2020, reaching an all-time high of over $2,000 in August. By the end of the year, the precious metal price slipped to $1,864 and then rose to over $1,950 in January 2021.
However, the first quarter of the year brought a negative trend, with the price of gold falling to $1,684 by the end of March. Statistics indicate the price of gold stood at around $1,860 last week, a 5% drop since the beginning of the year.
Gold, Other Safe Haven Assets Plunge Ahead of Fed Rate Hikes
Gold and other safe-haven assets plunged last week as the Federal Reserve signals the possibility of raising interest rates twice in 2023 given the ongoing economic recovery post-COVID-19.
The price of gold dropped by 6.04 percent last week as investors rushed to move their funds out of safe-haven assets including the new gold, cryptocurrency.
The entire crypto space sheds $898 billion in market value to hover around $1.625 trillion last week, down from $2.523 trillion recorded on Wednesday 12, 2021. Its highest market capitalisation till date.
The Federal Reserve raised inflation expectations to 3.4 percent and shifted the year it is expected to increase interest rates from near-zero to 2023 from the previously projected 2024.
The new hawkish stance of the central bank led to capital outflow from safe havens and subsequently boosted dollar attraction.
The United States Dollar gained across the board with the dollar index that tracks its performance against six major currencies, rising by 0.63 percent to 91.103 last week.
However, on Monday morning the gold showed signs of recovery, gaining 0.5 percent to $1,772.34 per ounce following the retreat in U.S. treasury yield that boosted the attraction of non-yielding metal.
Bitcoin, the most dominant cryptocurrency coin, pared losses to $33,245 per coin, up from the $32,658 decline it posted last week.
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