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Reciprocity: Experts differ on implications of long term enforcement

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images 2020 08 28T140146.741 Reciprocity: Experts differ on implications of long term enforcement

The announcement from the Ministry of Aviation that Nigeria would enforce the policy of reciprocity as it resumes international flights on September 5, was greeted with support from some stakeholders in the industry who believe it’s long overdue, while some say the country should tread with caution.

At last Thursday’s media briefing of the Presidential Task Force on COVID-19 in Abuja, the Director General of the Nigerian Civil Aviation Authority (NCAA), Captain Musa Nuhu, who represented the Minister of Aviation, Captain Hadi Sirika, said the policy means that only airlines from countries that allow flights from Nigeria would be allowed to fly into and out of the country.

“There are certain countries that have placed ban on Nigerians and residents of Nigeria going to that country and this process will determine who and who will be allowed to come into Nigeria. The principle of reciprocity will be applied. The conditions you gave Nigerians to travel to your country will apply to those coming from your countryß.

“If you ban us from coming to your country, the same will apply to you because we have to get a level playing field on the issue of principle of reciprocity. For this process, we had a meeting with foreign airlines on Wednesday. We gave them our requirements on the resumption of flights, for those who will ultimately be allowed to resume flight operations. Nigeria was among 50 countries banned from entering the EU countries. As far as we know, there has not been any change. So the principle of reciprocity will apply,” Nuhu said.

Nigeria has been excluded from the list of countries whose nationals will be allowed into the 27 countries that make up the European Union Commission after it lifted flight restrictions. The countries had shut their borders when the COVID-19 pandemic spread into the region. But with the easing of lockdown restrictions, the EU had released a draft list of 54 countries that will be granted entry into the borders. Some of the countries that would be allowed in include Algeria, Australia, Canada, Georgia, Japan, Montenegro, Morocco, New Zealand, Rwanda, Serbia, South Korea, Thailand, Tunisia, Uruguay, and China.

Eric Mamer, the spokesperson for the EU commission, said the criteria used to select the countries are based on their health situation. “The European Union has an internal process to determine from which countries it would be safe to accept travelers,” he said.

Though the policy was welcome by many, the stark reality of the implication of restricting entry to over 27 countries and limiting entry to just 1,280 passengers are enormous. At a virtual stakeholders meeting held few days ago, the Managing Director of the Federal Airport Authority of Nigeria (FAAN), Captain Rabiu Yadudu, revealed how it lost N18.9 billion internally generated revenue which is over 90 per cent revenue loss in 23 weeks as a result of the COVID-19 pandemic.

Speaking on the guidelines that only 1,280 passengers would be allowed into the country, he expressed concern that fewer passengers will lead to lower incomes.

“The figure automatically translates to fewer passengers and limited income even with the resumption of international operations. All these are issues of great concern to the authority and partly what has necessitated the need for all our stakeholders to rub minds on strategies to adopt to ensure that the industry remains in operation to provide the much-needed service,” he said.

An aviation security expert, Captain John Ojikutu, told Daily Sun, that in enforcing the policy, the government must be cautious as 80 per cent of the industry’s revenue comes from foreign airlines. He said for over 40 to 50 years, Nigerian airlines have been unable to compete effectively with foreign airlines and advised the Federal Government to review the various commercial agreements with foreign airlines and increase the charges on the concessions given to them by a percentage practicable in the commercial market that will not make the country lose the benefits of 80 per cent earnings.

A Bilateral Aviation Safety Agreement (BASA) are arrangements usually between two countries that allow the airworthiness certification of civil aeronautical products to be shared between them. They help reduce duplication of activity and aim for mutual acceptance of certificates. Nigeria has BASA with India, United Arab Emirates, Britain, Isreal, Qatar and many other countries.

Ojikutu said: “The policy of reciprocity in bilateral air services agreements are very similar to those on the foreign policies, hence no BASA is signed without the input of the foreign affairs ministry. However, our reciprocity action on BASA must be very cautious with economic benefits because that is what BASAs are mostly about. At the moment and in the past 40 to 50 years, because we have been unable to compete effectively with the foreign airlines, they have been contributing well over 80% of our earnings in commercial aviation.

“Therefore, we need to go softly on them. Because we cannot unilaterally review the BASA, my advice to the responsible authorities is to review the various commercial agreements with these foreign airlines and increase the charges on the concessions given to each of the airlines by a percentage practicable in the commercial market that will not make us lose the whole benefits of 80% earnings in commercial aviation. We must take another look into the commercial agreements in the BASAs too, where over time, there had been exploitation of them by government officials. Over the years too, this has been a source of revenue lose to the state.”

However, domestic airlines are upbeat about the policy. The Chief Executive Officer of Air Peace, Allen Onyema, applauded the decision in a letter to Sirika. He said: “You have, by this action, brought so much respect to our people and our nation. Nigerians all over the world are walking tall with enormous pride since the last few hours when the news broke out. This is the beginning of the end of the stigmatisation of Nigeria and everything Nigerian. God bless you always. From my sincere heart, I have come to appreciate your nationalistic tendencies.”

Onyema said the Minister, by his conduct and commitment, has ensured that the aviation industry is unencumbered, noting that Sirika facilitated the customs duty waiver on aircraft and spares and currently working on the unification of charges paid by domestic airlines.

The lead consultant of Etimfri group, Amos Akpan, said reciprocity is a standard instrument deployed in diplomatic relations among countries but pointed out that many of the countries that would be affected by the policy do not operate direct flights into Nigeria and that some of the countries use multilateral traffic negotiations to access Nigerian traffic.

“Reciprocity is a standard instrument deployed in diplomatic relations among countries. In Nigeria’s case, at this instance, it is directed at countries that denied us permits to operate evacuation flights. My observation is that those countries do not operate direct flights into Nigeria.

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Lower oil demand may persist beyond 2021 – World Bank

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images 2020 10 23T153303.293 Lower oil demand may persist beyond 2021 – World Bank

The World Bank on Thursday said lower demand for crude oil may persist beyond 2021 .
It stated that while metal and agricultural commodities had recouped their losses from the COVID -19 pandemic and were expected to make modest gains in 2021 , energy prices , despite some recovery , were expected to stabilise below pre – pandemic levels next year .
Oil prices fell dramatically in the early stages of COVID -19 and have only partially regained pre -pandemic price levels .
Metal prices on the other hand , declined relatively modestly and have returned to levels that preceded the shock, according to the semi -annual Commodity Markets Outlook report, as stated by the bank .
The bank stated that agricultural produce prices were relatively unaffected by the pandemic , but the number of people at risk of food insecurity had risen as a result of the broader effects of global recession .
“ The impact of COVID – 19 on commodities has been uneven , and could have lasting effects for energy markets ,” World Bank Group Acting Vice President for Equitable Growth , Finance and Institutions and Director for the Prospects Group, Ayhan Kose , said.
He added, “ When declines in commodity prices are short -lived , policy stimulus can buffer their impact.
“ However, when prices remain depressed for an extended period , policymakers need to find solutions so their economies can adjust smoothly to a new normal .”
He stated that because of COVID – 19 , the new normal for oil – exporting emerging and developing economies arrived earlier.
Kose explained that in the post -COVID world , these countries need to be more aggressive in implementing policies to reduce their reliance on oil revenues .
The bank said oil prices were expected to average $ 44 per barrel in 2021 , up from an estimated $41 per barrel in 2020 .
It said demand was expected to rise only slowly as tourism and travel continued to be held back by health concerns and as global economic activity was anticipated to return to pre -pandemic levels only in the year after next.
It said supply restraint was expected to be eased steadily .
“ Energy prices overall , which also include natural gas and coal, are expected to rebound sizably in 2021 , following large declines in 2020 , an upward revision from April ’s forecast,” the bank said.

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Ban Tomato Importation – Dangote Tomato MD Tells FG

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images 2020 10 23T104030.892 Ban Tomato Importation - Dangote Tomato MD Tells FG

Ban tomato importation – Dangote tells FG
The Managing Director of Dangote Tomato Processing plant in Kadawa, Kano State, Abdulkarim Kaita has on Thursday called on the Federal government to ban importation of tomato paste like it ban rice importation into the country.
This was as he decried importation of tomato paste which he said was still thriving as the commodity was being imported from Cameroon and Cotonour in Benin Republic.
Kaita made the call while flagging off the distribution of tomato seedlings to 5,000 farmers under the Anchor Borrower of Central Bank of Nigeria on Thursday at Kadawa village in Kura LGA of the state.
The MD also dropped hint that plans are underway by the company to ensure that Nigeria is self sufficient and positioned to export tomato by establishing the biggest greenhouse in Africa which has the capacity to produce 350 million seedlings annually.
According to him, “We are appealing to the Federal Government to put a total ban on the importation of tomato like what it did to rice.
“The ban is necessary so as to boost local production of the commodity and ensure that Nigeria is self sufficient in tomato production.
“the ban on the importation of tomato paste would lead to the establishment of more tomato processing plants thereby creating job opportunities for many people in the country.
“The company had on several occasions visited the Customs Headquarters and met with the Controller General with a view to lodging complaint over the issue but nothing was done to check the ugly trend.
“It is only by putting a total ban on tomato importation that the government can encourage farmers to grow the commodity for the country to be self sufficient.
“The company was working with the Central bank of Nigeria under the anchor Borrower programme to provide tomato farmers with high yield seeds which will enable them to produce a minimum of 40 tons per hectare.
“Similarly, the company is putting a lot of effort to ensure that Nigeria is self sufficient in tomato production by establishing the biggest greenhouse in Africa which has the capacity to produce 350 million seedlings annually.
“There are 12 major tomato producing states in the country which if fully cultivated, in the next one year, Nigeria will be able to start exporting tomato.
“The greenhouse which is the largest in Africa, is established to provide tomato growers with high yield tomato seedlings in the country,” Kaita said.
In his remarks, the Chairman, Kano State chapter, Tomato Growers Association of Nigeria, Sani Danladi-Yadakwari commended the Federal Government for including tomato value chain in the anchor borrower programme noting that it would go a long way in boosting tomato production in the country.
Some of the items benefitted by the tomato growers include seedlings, fertilizer, water pump and other inputs.

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Fuel Scarcity Looms As Depots Stop Loading

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images 2020 10 22T134311.286 Fuel Scarcity Looms As Depots Stop Loading

The scarcity of petroleum products is imminent in Nigeria as some depots have stopped loading-trucks, The Nation learnt on Wednesday.
The Independent Petroleum Marketers Association of Nigeria (IPMAN ) National Vice President, Alhaji Abubakar Maigandi, disclosed this to our Abuja correspondent on phone.
He added that the #EndSARS protests and the resultant crises have stopped the marketers from transiting their loaded trucks.
According to him, since petroleum products are highly inflammable, the drivers decided to park their trucks in safe places nationwide.
He explained that since consumers buy fuel on daily basis and there is no replacement, there is bound to be a scarcity of petroleum products.
Maigandi further said the marketers do not hoard products so there will be no reservoirs to turn to upon the exhaustion of available stock.
Asked whether there is any fear of scarcity, he said “definitely, because some of the depots are not loading due of insecurity.
“The ones that have already loaded parked their trucks in the yards so that protesters will not set them on fire. There is no way you can have sufficient fuels in the filling stations because we don’t do hoarding.”
The IPMAN National Vice President urged the protesters to dialogue with the Federal Government for the amicable resolution of the crises.
He asked them to embrace the olive branch because of the economic losses that emanate from the crisis.
His words: “The EndSARS issue is a Nigerian issue so the protesters and government should dialogue over it for a lasting solution. Nigerians (both government and the governed need to have attitudinal change. So, it is better to dialogue. “

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