By Chinelo Obogo [email protected]
National Association of Nigerian Travel Agencies (NANTA), has said that the new Central Bank of Nigeria (CBN) policy that limits withdrawals of cash in its push for a cashless economy, would not affect the purchase of flight tickets.
Speaking to Daily Sun, the president of NANTA, Susan Akporiaye, said the monetary policy, which limited weekly over-the-counter cash withdrawals to 100,000 naira for individuals and 500,000 naira for corporations, with a processing fee required to access more, will not affect travels tickets. When the policy takes effect on January 9, ATMs will no longer dispense above N200 denominations, while withdrawals from ATMs and point-of-sale (POS) terminals also will be limited to N20,000 daily.
“There is no limit for transfer, so we do not have issues with the policy and it cannot affect travel because we don’t use physical cash for transactions. There is no limitation to transfers as it applies only to physical cash withdrawal which is not even safe for the kind of business we do.
Before this policy, we were not used to cash operation because of the volume of the money involved in our transaction that is why it is not usually encouraged. The money involved is in millions, so we don’t handle cash because it is risky. “The only thing I see is that it is going to affect those that do petty businesses like POS and petty traders. It will practically shut down that sector and increase unemployment. It was not a well thought out decision because it would negatively affect these petty traders. I know a POS operator who makes about N10, 000 profit a day and by this, you are restricting them to making N300 profit a day. The fact that it does not affect us, it doesn’t mean that it is a good policy,” she said.
Also responding to the warning by the International Air Transport Association (IATA) that the amount of airline funds for repatriation being blocked by the governments of 27 countries has risen by more than 25 percent ($394 million) in the last six months with Nigeria topping the list, Akporiaye said IATA should have also revealed the sales that Nigeria made.
The global body said the total funds blocked now tally at close to $2.0 billion and called on governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities, in line with international agreements and treaty obligations.
IATA in a press statement said the top five markets with blocked funds (excluding Venezuela) are: Nigeria: $551 million, Pakistan: $225 million, Bangladesh: $208 million, Lebanon: $144 million and Algeria: $140 million. But Akporiaye said: “They should have told us the total volume of sales that Nigeria made. They just gave us a figure and someone seeing the figure would shout that it is too much but what it is the market share? Compare that figure to what we sold. For instance, if from the time they were owing till now, Nigeria has sold $1.6 billion, owing $550 million is less than 50 percent. Meanwhile, another market that is owing $250 million, naturally, you would say the market is better than our own, but the total sales of that market might be $400 million, that would be over 70 percent of what the market is.
“The total sales we did in Nigeria is N1.1 billion dollars and we are owing $550, that is 50 percent, it means the Nigerian market is better than the other markets because what we are owing is just 50 percent of our total sales while the other market is owing 70 percent of their total sales. That is the part that we, as travel agencies are aware of but IATA is not saying. But the body is not interested in bringing out the percentage of total sales because they want their money and it would make the Nigerian government know that ours is better.
“The information that IATA is putting out is trying to make the country look bad and it is not good for us, it is just that the Nigerian government do not know what they are doing because anyone that read it, would run away from doing business with us. The money in question is with the airlines and not the Federal Government, it is just that it is with them in naira and they can’t get it in dollars. “It is still affecting the cost of flight tickets because the airlines need to justify what they are doing and the way to do it is to increase the cost of tickets, so that people would be sympathetic. The increased fares so that they won’t sell much, but it is not working because they are really still selling. Foreign airlines are making more money, as high as 300 percent profit,” she said.