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The Stranded Traveller: A Tale of Trapped Funds and Soaring Airfares in Nigeria

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Nkechi had been saving for months to take her dream trip to London. She had researched everything from flights to hotels, and had finally settled on a good deal with Virgin Atlantic. But just as she was about to make the payment, she noticed that the price had gone up significantly.

She couldn’t understand why the exchange rate had suddenly skyrocketed from N462 per dollar to N551 per dollar, as she had been keeping up with the news and hadn’t heard of any major changes in the forex market.

Nkechi soon found out that the increase was due to a recent move by foreign airlines to block their inventory of cheaper tickets in order to cushion the effects of the rising amount of trapped funds. Nigeria had the highest amount of foreign airlines’ trapped funds globally, with about $743m as of January that year. This had led to a backlog of unremitted funds which the airlines were unable to repatriate, resulting in the increase in the exchange rate for ticket sales.

Nkechi felt frustrated and helpless. She had saved diligently and now her dream trip seemed to be slipping away. She wondered why the government hadn’t done more to release the trapped funds and make things easier for travellers like her. She reached out to her travel agent, who explained that the increase in the exchange rate had led to an over 20 per cent increase in international airfares. This meant that the promo price for her Virgin Atlantic ticket had gone up from N800,000 to N1.1m.

Nkechi was devastated. She had to either pay the higher price or forfeit her trip. She decided to explore other options and eventually found a cheaper deal with a less popular airline. The trip wasn’t exactly what she had envisioned, but at least she was going to London.

As she boarded the plane, Nkechi couldn’t help but think about how the situation could have been different if the government had acted faster to resolve the issue of trapped funds. She knew that many travellers were still stranded and unable to afford the high airfares. She made a mental note to write to her representatives and urge them to take action.

Nkechi’s trip was filled with mixed emotions. She was grateful for the opportunity to travel, but also saddened by the knowledge that many others were unable to do the same. She hoped that the situation would improve soon, and that travellers like her would not have to suffer the consequences of bureaucratic delays and economic uncertainty.

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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EU to Raise Schengen Visa Fees, African Nationals Hit Hardest

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Starting Tuesday, African nationals seeking entry to the European Union will face increased visa fees as the EU raises the cost of Schengen visa applications from €80 to €90.

This 12.5% hike announced by the EU Commission adds to the financial burden for many applicants, particularly from African countries that already face high rejection rates and significant expenses.

According to recent Schengen visa statistics, African nationals received 704,000 negative responses to their visa applications in 2023.

This high rate of rejections resulted in approximately €56.3 million spent on non-refundable visa fees.

The report highlights that these expenses, referred to as ‘reverse remittances,’ represent a substantial financial outflow from African countries to the EU, benefiting no one but the recipient nations.

The impact of these costs is disproportionately felt by African applicants, who accounted for 43.1% of the total amount generated by rejected applications in 2023.

Among the hardest-hit were nationals from Algeria and Morocco. Algerians, who filed the second-highest number of applications, saw 42.3% of their 289,000 requests denied.

Moroccan nationals faced an even higher rejection rate, with 62% of their 437,000 applications being turned down, leading to €10.9 million spent on unsuccessful visa bids.

Overall, the EU earned €3.4 million from rejected Schengen visa applications submitted by Nigerian citizens alone, illustrating the significant financial burden placed on individual applicants.

The high rejection rates for African and Asian countries, which together bear 90% of all visa-related expenses, exacerbate the economic challenges faced by applicants from these regions.

The recent study by EU Observer underscores the growing trend of increased expenses and rejection rates.

Schengen visa rejections generated €130 million in 2023, up from €105 million the previous year, indicating a rise in both visa costs and the financial impact on applicants.

Marta Foresti, founder of the LAGO Collective, commented on the broader implications of these financial dynamics.

“Visa inequality has very tangible consequences and the world’s poorest pay the price. You can think of the costs of rejected visas as ‘reverse remittances’, money flowing from poor to rich countries. We never hear about these costs when discussing aid or migration; it is time to change that,” she said.

As the EU implements the new visa fee structure, the financial strain on African nationals is set to intensify. With some of the lowest wages globally, many Africans will find the increased costs even more challenging to bear.

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UAE to Lift Visa Ban on Nigerians, Says Aviation Minister Festus Keyamo

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The longstanding visa face-off between Nigeria and the United Arab Emirates (UAE) is set to end, according to Nigeria’s Minister of Aviation and Aerospace Development, Festus Keyamo.

The announcement came during a welcome dinner for delegates attending the International Air Transport Association (IATA) 80th Annual General Meeting and World Air Transport Summit in Dubai.

In his address on Monday, Keyamo disclosed that the diplomatic disputes that led to the UAE imposing a visa ban on Nigerians have been resolved.

“The issue of visa has been resolved, just the announcement remaining. They want to dot the I’s and cross the T’s. The announcement will be in a couple of weeks,” he stated.

The visa ban, which severely restricted travel for Nigerians to the UAE, particularly to popular destinations like Dubai, was initially imposed due to a series of diplomatic disagreements.

However, recent efforts spearheaded by President Bola Tinubu, who intervened in August 2023, have paved the way for a resolution. This intervention also addressed the related face-off with Emirates Airlines, which had suspended its flights to Nigeria.

The significance of the resolution was underscored by the warm reception Keyamo received at the summit.

Accompanied by the ruler of Dubai, Sheikh Mohammed Al Maktoum, Keyamo’s entrance was met with applause from over 2,000 delegates.

This reception, Keyamo noted, is a testament to the valued relationship between Nigeria and the UAE.

In a conversation with journalists on the sidelines of the event, Keyamo explained the importance of restoring and maintaining strong ties with the UAE.

“The UAE is considered a very important partner to Nigeria. Nigerians have a lot of stakes here in the UAE with significant investments. We are making it a priority to ensure that the travel route is reopened and that the visa application process is made easier for Nigerians,” he said.

Keyamo also highlighted the trust and value the UAE places on its relationship with Nigeria.

“I was on the same ride with the ruler of Dubai, the Minister, and the head of Emirates Group, along with other top officials. This level of engagement shows how much they value Nigeria and how they want to rebuild this relationship,” he added.

The lifting of the visa ban is expected to have a substantial positive impact on both nations. It will not only facilitate travel for Nigerians seeking to visit or invest in the UAE but also strengthen economic and diplomatic ties between the two countries.

As the final details are being fine-tuned, Nigerians eagerly await the formal announcement. The resolution marks a significant diplomatic achievement and opens the door for renewed cooperation and mutual benefit.

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Kenya Airways Set to Boost Presence in Nigeria with Plans for Abuja Hub

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Kenya Airways, the East African aviation giant, is gearing up to significantly expand its footprint in Nigeria by establishing a new operational hub in Abuja, as part of its broader strategy to enhance connectivity across the African continent.

In an exclusive interview with journalists at the airline’s office in Lagos, Julius Thiarus, the Customers Commercial Manager of Kenya Airways, revealed the company’s ambitious plans.

Thiarus emphasized the importance of Nigeria as a key market for Africa and highlighted Kenya Airways’ commitment to establishing its presence in major cities across the continent.

“We want to be in every significant city in Africa. We want to fulfil that mandate by coming into Abuja, which is part of our strategy aligning with what we see as growth in travel,” Thiarus stated, underlining the airline’s strategic vision.

Kenya Airways aims to capitalize on the burgeoning market size and economic significance of Nigeria by bolstering its operations in Abuja. Thiarus highlighted the importance of cargo transportation for the airline, emphasizing the need to reduce reliance on external sources for essential supplies to Africa.

To this end, Kenya Airways recently added two cargo freighters to its fleet, doubling its capacity to meet the growing demand for cargo services across the continent.

Addressing the issue of low passenger traffic from Nigeria to Kenya, Thiarus outlined plans to increase the airline’s daily frequencies to Lagos from one flight per day to two flights.

He also revealed that Kenya Airways is strongly considering establishing a new route to Abuja, with plans to commence operations next year.

“We are looking at Abuja and probably sometime next year to establish that flight to Kenya and beyond Africa,” Thiarus remarked, highlighting the airline’s commitment to enhancing connectivity between Nigeria and other African countries.

Despite Nigeria’s vast population and potential as a tourism market, Thiarus acknowledged that the current number of Nigerian visitors to Kenya is relatively low.

He stressed the importance of collaborative efforts between airlines, tourism boards, and government agencies to promote travel and tourism between Nigeria and Kenya.

“Nigeria is important for Africa, and Africa will never prosper if Nigeria is not prosperous,” Thiarus emphasized, underscoring the significance of Nigeria’s economic growth for the overall development of the continent.

Kenya Airways’ ambitious plans to establish a hub in Abuja signal a new chapter in the airline’s expansion strategy, aiming to strengthen its presence in Nigeria and enhance connectivity across Africa.

As the aviation industry continues to evolve, Kenya Airways remains poised to play a pivotal role in shaping the future of air travel on the African continent.

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