Muneer Bankole, Chief Executive Officer (CEO) Med- View Airline has warned that any further devaluation of the naira will affect the earnings of airlines in Nigeria and drive some into extinction.
Bankole has advised the Federal Government to map out strategies to prevent further depreciation of the naira against major currencies, especially the US dollar in order to save the nation’s airlines from total collapse.
Speaking in an interview at the 2019 Quarterly Business Meeting (BBM), last week organised by the Aviation Safety Round Table Initiative (ASRTI) held in Lagos, Bankole, lamented that the crash of the naira against major currencies in 2015 led to the deplorable state of the operating airlines in Nigeria.
He warned the government that any further rise in the exchange rate would negatively affect the fortunes of the airline sub-sector in the country.
He said the crash of the naira led to the depletion in the fleets of Nigerian carriers as maintenance cost which is paid for in dollars skyrocketed.
He called on the government to introduce policies that would make the naira stronger against foreign currencies adding that if this happened, more domestic airlines would spring up and provide jobs for the teeming population.
“As you are aware, before this administration came into being, the naira was N150 to a dollar and that was the target of everything we were doing, including leasing of aircraft and others, but, suddenly, it went to N500 and more. Then, a lot of challenges came in and you still have to pay your money back in the same value of the currency of which you took before.
“We are praying now that the exchange rate should go down and not increase as predicted by some people. This will create better life for Nigerians. What government should do today, is to bring the value of the naira back to the minimal level by which we can grow our economy. It should go back to N250 or maximum N280. This can be done gradually”, he said.
He further disclosed that nine months after the Federal Government approved the removal of Value Added Tax (VAT) from air transport, the decision is yet to be implemented.
The Airline Operators of Nigeria (AON), had lamented that its members paid at least N10 billion annually as five percent VAT to the coffers of the Federal Government through the Federal Inland Revenue Service (FIRS).
Bankole, explained that the umbrella body of the airline had made attempts to ensure its implementation without success, stressing that government still needed to inform the Ministry of Finance through memos which he said had not yet been done.
He called on the government to hasten the implementation to further reduce the financial burden on airlines operating in the country, adding that while the Nigerian government was collecting five percent VAT from the indigenous airlines, their foreign counterparts that operate in the country don’t remit such, either in the country or at their bases.
He said: “As at today, the answer is negative. Nothing is being done in that direction. All we are praying for is still to have the relevant authorities to do the right thing.
“The government will still need to talk to the Ministry of Finance, budget and everybody, including the National Assembly, to have it down and become a law.”
IFEOMA OKEKE
