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  • Business - Economy
  • Updated: August 17, 2020

How Foreign Flights Resumption Will Save Nigeria's Depleting Forex, Jobs

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Olalekan Fakoyejo
Olalekan Fakoyejo

Fakoyejo Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ)....

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Nigeria has announced that international flight will resume after almost four months of closure of the country's airspace to foreign flights. The resumption of international flight comes at a period the country's foreign reserves (forex) is depleting due to the shutdown of major forex sources like the aviation industry.

International and domestic flights had been banned from operation in March 2020 after the coronavirus outbreak in Nigeria, but the Federal Government lifted the ban on domestic flight movements across Nigeria in July, but limited foreign flights to non-profit activities like flying trapped citizens in and out of the country.

When Will International Flights Begin?

The lockdown for foreign flights had lasted for five months until the Minister of Aviation, Hadi Sirika, announces some minutes ago that international flights will resume on August 29, 2020. The foreign flights will start with Lagos and Abuja before other states are allowed to open their airports.

[READ ALSO: Northern States Push Inflation To 12.82% As Foodstuff Prices Rise Across Nigeria]

"Glad to announce the resumption of international flights from the 29th of August, 2020. Beginning with Lagos and Abuja as we did with the domestic flight resumption. Protocols and procedures will be announced in due course. We thank you for your patience." Sirika said in a statement seen by AllNews.

Why This Is Important To Nigeria's Economy

The Aviation industry is a major source of foreign reserves for Nigeria behind the oil industry. Since the shutdown of the Aviation sector, Nigeria has struggled to increase its forex, with the Central Bank of Nigeria (CBN) carefully disbursing the available forex by limiting forex application to school fees and importation of essential raw materials that can't be obtained in Nigeria.

Foreign flights coming into the country arrive with foreign currency (dollar) in exchange for naira, that way, Nigeria is able to increase its forex or foreign reserves - but with the Aviation sector banned from operation and oil demand dropping amidst oil price slump, the country has been unable to access as much foreign currency as possible.

The reopening of international flights will now support the contribution of the oil industry to make forex available for the CBN to Disburse to importers and exporters in need of forex to purchase raw materials without restriction to essential raw materials.

[READ ALSO: Flour Mills React As Revenue, Profit Survives COVID-19 Assault, Lockdown Impact]

The restriction had to limit the production capacity of many companies who couldn't lay their hands on forex to import raw materials. Once the forex is enough to go round, production capacity will rise, and boost job opportunities as companies will need more hands to increase production.

This had also affected Naira's value, as the demand for forex weighed heavily on the exchange rate, strengthening the dollar - although the CBN had faulted the black market, stating that illegal businesses had been flooding the parallel market with forex demand while legal businesses had been on lockdown.

CBN May Now Give Black Market Forex

The Bureau De Charge had been requesting for the CBN to allow the black market assist the apex Bank in disbursing forex to applicants in need of forex, but the CBN had ignored the request stating that there's no reason for the black market to disburse forex since most sectors like the Aviation industry was on lockdown (before domestic flight began).

The CBN, however, stated that it will consider allowing the Bureau de charge have access to forex when the Aviation industry open for business. With both domestic and foreign flights now expected to fully operate in September, the bureau de charge might get the access to dollar.

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Olalekan Fakoyejo
Olalekan Fakoyejo

Fakoyejo Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ)....

More From this Author

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