• Tuesday, May 21, 2024
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Air cargo volumes in Nigeria dwindle over rising inflation

Global air cargo

Air cargo volumes across airports in Nigeria dwindled in 2023 after inflation accelerated

Rising production costs, dwindling purchasing power, elevated exchange rates have significantly affected air cargo volumes processed across Nigerian airports.

In 2023, the Nigerian Aviation Handling Company (NAHCO) recorded a six percent decline in its total tonnage to 61.09 million kg from 65.65 million kg in 2022. The decline was as a result of a dip across all its services such as import, export and courier.

Total import for NAHCO decreased by 6.7 percent to 43.88 million kg in 2023 from 47.08 million kg in 2022. The company also witnessed a reduction in export in 2023 to 14.14 million from 13.44 million kg.

Similarly, Skyway Aviation Handling Company (SAHCO)’s total tonnage decreased in 2023 to 63.56 million kg from 68.23 million kg in 2022.

In this case it is driven by a decline in its total import as SAHCO witnessed an increase in its total export.

SAHCO saw its export grow to 17.34 million kg in 2023 from 16.34 million kg the previous year, while its total import decreased to 46.22 million kg in 2023 from 51.89 million kg.

Seyi Adewale, the chief executive officer of Mainstream Cargo Limited, told BusinessDay that the dwindle in cargo volumes being processed across airports in Nigeria as a result of cost of production which largely increased because it is not easily passed over to the consumer due to eroding purchasing power.

“These higher costs include diesel, supply chain cost due airfreight, fuel surcharges, higher exchange rates affected by CBN on Customs Currency Exchange Platform,” Adewale said.

He mentioned other factors to include higher local transport and distribution costs, exiting or temporary closure of production / manufacturing companies such as Smithkline Beecham, amongst others.

“Some FG’s restrictions or policies trying to either force or compel companies operating in Nigeria to source raw materials locally is also a factor that affected cargo volumes. Eg, the milk producing companies and card production by telecoms companies,” he said.

Ikechi Uko, the organiser of Aviation and Cargo Conference (CHINET) told BusinessDay that the economy was shrinking because even imports reduced, which shows a response to the economy and the economic situation.

Uko said in the last four to five years, only few freighters fly into Nigeria on selected days.

“The daily group of freighters that fly in lot of goods no longer come in. So we now have a belly hold for most of the goods that go out of Nigeria and come into Nigeria. There have also been a need to export perishables and do a lot of export.

“This explains why we have had increase in export. With the falling of the naira, everyone wants to earn dollars. There is an increase energy and activities to do more export. The falling tonnage is a good mirror to see how our economy has performed and it is obvious that we have not performed well,” he explained.

BusinessDay last year reported that big cargo planes specifically designed to carry cargo stopped flying into Nigeria as a result of the foreign exchange scarcity and trapped funds experienced by carriers.

Before the airlines’ trapped funds issue started in Nigeria, cargo aircraft flew into Nigeria three to four times weekly. However, findings by BusinessDay show that currently, most cargo planes have stopped operations in Nigeria.

Cargolux, Saudi Cargo and Emirates Cargo airlines which operated cargo flights into Nigeria have all stopped flights into the country. Only Turkish Airlines cargo planes still carry out skeletal operations in Nigeria and sometimes, the airline is unable to operate even one flight to the country in one week.

Airlines now use the belly compartment in passenger aircraft to accommodate cargo. However, importers or exporters with large cargo have had to charter cargo planes to bring in their cargo products into Nigeria at very exorbitant rates.

“Currently, no freighter cargo airline is coming into Nigeria. We used to have freighter cargo carriers like Cargolux and others that fly into Nigeria between three to four times weekly, but all of them have stopped. We don’t have any single freighter cargo airline coming into Nigeria,” Kingsley Nwokeoma, president, Association of Foreign Airlines and Representatives in Nigeria, (AFARN) told BusinessDay.

“So what happens to cargo now is that the bellies of passenger aircraft such as the 777, and the big Airbus aircraft are used to take some reasonable amount of cargo.”

Nwokeoma explained that for operators to export or import very big cargoes that cannot enter the belly of passenger flights, it means they have to pay for a charter plane to bring in those cargoes.

“For instance, telecommunications operators have to charter planes to bring in their masts. The marine sector is taking advantage of this gap and more people who are willing to wait for one to three months for the arrival of their goods now export and import via sea,” the AFARN president said.