Aviation crisis: Emefiele says a third of the global economy is in recession

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, revealed on Monday that about a third of the global economy “is currently in recession” due to the adverse effects of the Covid pandemic and war. underway between Russia and Ukraine.

The CBN boss, who said this while addressing foreign affairs and aviation stakeholders during a meeting with Speaker of the House of Representatives, Femi Gbajabiamila, also pointed out that the bank was working in outside the box to mop up currencies and strengthen the naira and by extension the economy through the RT 200 policy.

According to him, “RT 200 is the policy focused on the rates of repatriation of non-oil export earnings into the Nigerian economy which is nearly $1 billion in Q3 2022.

“What is happening is a global challenge. Indeed, as I speak, I can say that the global outlook is darkening today due to a worsening global slowdown.

“Today, more than a third of the global economy is in recession. The global community is facing an increase in incidents of unemployment. Indeed, most countries in the world are facing rising inflation. This year alone, the United States is expected to raise rates by almost 3.75% in 2022. This has created severe inflationary pressures and depreciated the currencies of other countries.

“From the CBN, since February this year, we have introduced the RT 200 program, which is a program set up in order to encourage the repatriation of Forex earnings from exporters of non-oil export products. We are pleased that the The program is working well. When we started it, the first six weeks of February and March, we could only see repatriations. We paid out repatriation discounts of about $62 million. In the second quarter, we saw an astronomical improvement to $622 million in non-oil export revenue. For the third quarter, we saw nearly $1 billion,” Emefiele said.

The CBN boss was responding to the issue of $700m in funds being trapped by foreign airlines, which have threatened to stop flying on Nigerian routes from October 28 if nothing is done by the government to resolve the backlog .

He said that contrary to the position of the IATA representative that nothing had been done to reduce the backlog, a sum of $265 million had been set aside to be paid to foreign airlines through from their various banks.

According to him, “apart from the prioritization of FX that we have always given to airlines, on August 31 you spoke to me because I have to give you credit. That day I made the decision to use our discretion to allocate $265 million to foreign airlines.

“We made $110 million on the spot and the rest 60 days later. On that day we allocated IATA $32m through UBA, Qatar Airways got $22.8m through Standard Chartered, Emirates got $19.6m through Access Bank, BA got 5.5 million through GTB;

“Virgin Atlantic got $4.8 million through Zenith, etc.

“So how can they start saying they haven’t received their money? That’s apart from the so called 8 or 10 percent you say you get Mr. Fatokun (referring to the IATA rep).

“This is an additional allowance that we use at our discretion to give you and which I have told you personally that we will continue to do in order to make you happy so that you don’t continue to blackmail this country.

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“Of that $120 million would be due October 31. The amounts would be paid. So what else do you want me to do? I must admit that there would be a delay. Gentlemen, even though I have been accused of printing Naira, I cannot print dollars. We have to earn it or borrow it. All of these things we talk about come down to reciprocity, and IATA can’t get away from that,” he said.

He also called on other foreign countries to grant landing permits to Nigerian airlines to operate their flights to lessen the burden of accumulating funds in the future.

According to him, “IATA has the responsibility to fly Nigerian airlines on the basis of reciprocity.

“Everyone is using CBN, blocked funds, and I’m doing everything I can to provide you with dollars to repatriate your money. How can you come here and start telling us that you weren’t a party to BASA and that’s why you’re not interested in the concept of reciprocity when you know it would benefit your country and our country,” he said.

Speaker of the House of Representatives, Rep Femi Gbajabiamila, who organized the meeting, had earlier told the assembly that the issue of blocked or trapped funds from foreign airlines gave the House a great concern, of or the need for the forum to find lasting solutions bearing in mind the current economic imperatives.

The President, who also said that the principle of reciprocity requires that Nigerian carriers be allowed to fly in countries whose airlines have a huge market in Nigeria, called on the CBN Governor to seek ways to raise foreign currency. for the airlines, just as he agreed that allowing Nigerian airlines to operate many international routes will reduce the incident of trapped funds in the future.

Aviation Minister Senator Hadi Sirika told the assembly that “Nigeria under President Muhammadu Buhari has shown the ability and the boldness to rise up in difficult times to do what it takes to help the country”.

He recalled that “in 2016 when we came there was about $480 million stuck in Nigeria. That year, we were in a recession and revenues were down. We just heard the CBN Governor say we earn it or borrow it. At that time, we hadn’t even started borrowing. We therefore went to see the President and informed him of the difficulty in which we found ourselves. And he asked the CBN Governor and the Minister of Finance to solve the problem, which was done.

“So we have demonstrated as a country that we are able to respond even in difficult times to things that are incumbent on us.”

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