The West African nation allegedly neglected to repatriate millions of dollars of its money, according to the airline located in Dubai.
In a statement released on Thursday, August 18, the airline claimed that it made the “difficult decision” in order to prevent future losses, blaming events “beyond our control.”
In July, Emirates declared that it had $85 million “awaiting repatriation from Nigeria,” a sum that was allegedly increasing by more than $10 million each month.
“Emirates has tried every avenue to address our ongoing challenges in repatriating funds from Nigeria, and have made considerable efforts to initiate dialogue with the relevant authorities for their urgent intervention to help find a viable solution,” the airline said adding that “Regrettably there has been no progress.”
The Multinational Air Transport Association said in June that there were $450 million in unaccounted-for profits from other international airlines operating in Nigeria.
-Emirates not alone-
“Emirates are not alone in this issue. All the foreign airlines are in similar predicaments,” said Sindy Foster, a Lagos-based aviation expert, who added that the issue of trapped revenues is “a recurring problem” building up since 2016 when several airlines pulled out of Nigeria over a similar issue.
According to government statistics released earlier this year, foreign investments in Nigeria have decreased by 81% over the last two years. Analysts are concerned that Emirates’ planned suspension of flights may frighten away investors from that country.
Despite being one of Africa’s top exporters of crude oil, Nigeria, the continent’s largest economy, is currently experiencing a crisis brought on by a lack of foreign currency. The country’s main source of foreign cash, oil production, has fallen significantly short of expectations this year.
In July, Emirates informed Nigerian authorities it would reduce its flight operations to the West African nation after trying unsuccessfully “to stem the losses by proposing to pay for fuel in Nigeria in nairas (which continues to weaken against the dollar).”
-Alternative travel arrangements for affected passengers-
Emirates stated that it will help passengers who are impacted by the scheduled suspension of flights to Nigeria in making alternate travel plans and that it will reconsider the suspension “should there be any good developments” about the detained monies.
If the government does not respond to Emirates’ declaration, additional international airlines might follow suit, according to analyst Foster, a principal managing partner at Avaero Capital Partners.
“Most things are imported in Nigeria, requiring dollars to perform the transaction. This isn’t just an aviation problem. It sends negative signals across the Nigerian economy,” she said.
