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Nigeria, India Bilateral Air Service Agreement

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  • Nigeria, India Bilateral Air Service Agreement

Recently the federal government signed a Bilateral Air Service Agreement (BASA) with the Republic of India in order to deepen flight operations with the Asian country.

This was disclosed by the Minister of State, Aviation, Senator Hadi Sirika through his twitter handle, as plans to reach this partnership had been afoot in the last six months.

While it is necessary to reach this agreement with India because of the increasing volume of trade, the increasing number of Indians doing business in Nigeria and the fact that India has provided succour to many sick Nigerians who could not be treated in the country, there is still apprehension about the agreement; whether like many others signed in the past, it was lopsided against the interest of Nigeria and her airlines.

India benefits most from medical tourism by Nigerians than anywhere in Africa, findings revealed that the major job of some Indian companies in Nigeria is to facilitate medical checks and movement of patients from the country to the world’s second most populated country.

Aviation industry consultant and CEO of Aglo Limited, Tayo Ojuri, said there is a lot of health tourism from Nigeria to India and that a lot of Indians are doing business in Nigeria.

Ojuri added: “Nigeria and India also have large population and market strata. There are some levels of balance of trade between the two countries.”

Sirika however, did not give details of the bilateral agreement in the information he made public but it has to be noted that currently there is no direct flight service between Nigeria and India.

Many Nigerians that travel connect flights in Addis Ababa or in Dubai but the federal government had designated Air Peace to Mumbai and with this agreement it is hoped that Indian carriers would be coming to Nigeria too.

But many industry observers are sceptical that many bilateral agreements entered into by Nigeria are always skewed against the country.

That explained why aviation experts have variously advised the federal government to review its BASA with many countries whose airline operate into Nigeria.

This is critical and sobering when it is considered that that foreign airlines generated revenues from ticket sales of over $3.2 billion in the last two years from Nigeria but no Nigerian airline benefitted from such long-haul operations.

The last time he was in Nigeria, the international aviation consultant, Chairman of African Business Aviation Association (AfBA) and the former Secretary-General of Africa Airlines Association (AFRAA), Nick Fadugba, said most of the BASA agreements signed between Nigeria and other countries are largely tilted against Nigeria and that it would be difficult to begin to renegotiate them.

He, however, said Nigeria should be careful henceforth and ensure that new BASA deals don’t follow the old ways.
“When I look at BASA in Nigeria, it is like we opened the stable door and the horse has gone and to catch it back it is going to be very difficult. We entered into BASA agreements with numerous countries, the principle of BASA is reciprocity and yet we entered into BASA and we are not able to reciprocate,” he said.

So industry operators are demanding that the federal government should make available the details of the agreement it recently signed with India to ensure that Nigeria is not short-changed.

They also stated that Nigeria should ensure that its own airlines benefit from such agreements and not just designating them to foreign destinations, adding, “other governments follow their airlines to do the leg work.”

The Director of Research and Strategy at Zenith Travels, Fidel Olu Ohunayo, said governments that care for the interest of their indigenous carriers must ensure that the interest of their home airlines are protected first but in Nigeria government officials sign agreements that are tilted against the interest of Nigerian operators.

Ohunayo, said there is no way Nigerian airlines can survive if government does not protect their interest as other countries do; noting that the priority of governments in aviation is to protect their own.

“British Airways has input in all British government’s bilateral, hence they get good slots in other countries, while our own carriers battle Heathrow or Gatwick airport management for slots and space which should have been factored in the BASA agreement Nigeria signed with UK,” he said.

Recently the President of Lagos Chamber of Commerce and Industry, Babatunde Ruwase said the trade volume between Nigeria and India had hit over $20 billion, noting that the trade had brought about strong bilateral relationship.

It is estimated that Nigeria spends about $1.3 billion on overseas medical treatment, including kidney and heart diseases and many of them seek such treatment in India.

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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Economy

Federal Government Set to Seal $3.8bn Brass Methanol Project Deal in May 2024

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Gas-Pipeline

The Federal Government of Nigeria is on the brink of achieving a significant milestone as it prepares to finalize the Gas Supply and Purchase Agreement (GSPA) for the $3.8 billion Brass Methanol Project.

The agreement to be signed in May 2024 marks a pivotal step in the country’s journey toward industrialization and self-sufficiency in methanol production.

The Brass Methanol Project, located in Bayelsa State, is a flagship industrial endeavor aimed at harnessing Nigeria’s abundant natural gas resources to produce methanol, a vital chemical used in various industrial processes.

With Nigeria currently reliant on imported methanol, this project holds immense promise for reducing dependency on foreign supplies and stimulating economic growth.

Upon completion, the Brass Methanol Project is expected to have a daily production capacity of 10,000 tonnes of methanol, positioning Nigeria as a major player in the global methanol market.

Furthermore, the project is projected to create up to 15,000 jobs during its construction phase, providing a significant boost to employment opportunities in the country.

The successful execution of the GSPA is essential to ensuring uninterrupted gas supply to the Brass Methanol Project.

Key stakeholders, including the Nigerian National Petroleum Company Limited and the Nigerian Content Development & Monitoring Board, are working closely to finalize the agreement and pave the way for the project’s advancement.

Speaking on the significance of the project, Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized President Bola Tinubu’s keen interest in expediting the Brass Methanol Project.

Ekpo reaffirmed the government’s commitment to facilitating the project’s success and harnessing its potential to attract foreign direct investment and drive economic development.

The Brass Methanol Project represents a major stride toward achieving Nigeria’s industrialization goals and unlocking the full potential of its natural resources.

As the country prepares to seal the deal in May 2024, anticipation grows for the transformative impact that this landmark project will have on Nigeria’s economy and industrial landscape.

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IMF Report: Nigeria’s Inflation to Dip to 26.3% in 2024, Growth Expected at 3.3%

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IMF global - Investors King

Nigeria’s economic outlook for 2024 appears cautiously optimistic with projections indicating a potential decrease in the country’s inflation rate alongside moderate economic growth.

The IMF’s revised Global Economic Outlook for 2024 highlights key forecasts for Nigeria’s economic landscape and gave insights into both inflationary trends and GDP expansion.

According to the IMF report, Nigeria’s inflation rate is projected to decline to 26.3% by the end of 2024.

This projection aligns with expectations of a gradual easing of inflationary pressures within the country, although challenges such as fuel subsidy removal and exchange rate fluctuations continue to pose significant hurdles to price stability.

In tandem with the inflation forecast, the IMF also predicts a modest economic growth rate of 3.3% for Nigeria in 2024.

This growth projection reflects a cautious optimism regarding the country’s economic recovery and resilience in the face of various internal and external challenges.

Despite the ongoing efforts to stabilize the foreign exchange market and address macroeconomic imbalances, the IMF underscores the need for continued policy reforms and prudent fiscal management to sustain growth momentum.

The IMF report provides valuable insights into Nigeria’s economic trajectory, offering policymakers, investors, and stakeholders a comprehensive understanding of the country’s macroeconomic dynamics.

While the projected decline in inflation and modest growth outlook offer reasons for cautious optimism, it remains essential for Nigerian authorities to remain vigilant and proactive in addressing underlying structural vulnerabilities and promoting inclusive economic development.

As the country navigates through a challenging economic landscape, concerted efforts towards policy coordination, investment promotion, and structural reforms will be crucial in unlocking Nigeria’s full growth potential and fostering long-term prosperity.

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South Africa’s March Inflation Hits Two-Month Low Amid Economic Uncertainty

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South Africa's economy - Investors King

South Africa’s inflation rate declined to a two-month low, according to data released by Statistics South Africa.

Consumer prices rose by 5.3% year-on-year, down from 5.6% in February. While this decline may initially suggest a positive trend, analysts caution against premature optimism due to various economic factors at play.

The weakening of the South African rand against the dollar, coupled with drought conditions affecting staple crops like white corn and geopolitical tensions in the Middle East leading to rising oil prices, poses significant challenges.

These factors are expected to keep inflation relatively high and stubborn in the coming months, making policymakers hesitant to adjust borrowing costs.

Lesetja Kganyago, Governor of the South African Reserve Bank, reiterated the bank’s cautious stance on inflation pressures.

Despite the recent easing, inflation has consistently remained above the midpoint of the central bank’s target range of 3-6% since May 2021. Consequently, the bank has maintained the benchmark interest rate at 8.25% for nearly a year, aiming to anchor inflation expectations.

While some traders speculate on potential interest rate hikes, forward-rate agreements indicate a low likelihood of such a move at the upcoming monetary policy committee meeting.

The yield on 10-year bonds also saw a marginal decline following the release of the inflation data.

March’s inflation decline was mainly attributed to lower prices in miscellaneous goods and services, education, health, and housing and utilities.

However, core inflation, which excludes volatile food and energy costs, remained relatively steady at 4.9%.

Overall, South Africa’s inflation trajectory underscores the delicate balance between economic recovery and inflation containment amid ongoing global uncertainties.

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