Single African Market Treaties in Focus


Nigerian airlines under the aegis of Airline Operators of Nigeria (AON) have kicked against Single African Air Transport Market (SAATM), saying, if fully implanted now, the treaties would be injurious to their operations.

The airlines had over the years clamoured for the liberalisation of African airspace as enunciated in the Yamoussoukro Declaration also known as Yamoussoukro Decision (YD) and the liberalisation of trade barriers in Africa. The treaties removed immigration impediments to air transport and trade in the continent.

But in a twist, the airlines have picked holes on the treaties, contending that the Nigerian government signs these treaties without looking at whether they would have adverse effect on Nigeria and her interests.

The airline operators, last Monday, made known their position on the SAATM and its concerns over the planned signing of Africa Single Free Trade Area (AfCFTA) treaty, said that on the face value, these treaties SAATM and AfCFTA) would boost intra-Africa trade and also encourage passenger movement in the continent.

The International Air Transport Association (IATA) had noted that SAATM would create extra 155,000 jobs and generate revenue of about $1.3 billion in annual GDP, liberalise African market and upturn the lopsided trade deficit against Africa in favour of Asia and Europe because the treaty would boost patronage of African goods by Africans and expansion of African markets.

But the Executive Chairman of AON, Captain Nogie Meggison, at a media parley on Monday, explained that the airlines are not really against SAATM and the treaty to liberalise trade in Africa, but only want the government to properly review these treaties before signing them because while they may be for the general good; they may not favour Nigeria’s interests now.

AON therefore called the federal government to reconsider its decision with the planned signing of the African Continental Free Trade Area Treaty, scheduled for signing by African Heads of States on March 21 – 22, 2018 in Kigali, Rwanda.

Meggison also called for caution on the heels of the Single African Air Transport Market that was recently signed into effect by African Heads of States in Addis Ababa, Ethiopia on January 28, 2018, which he considers a hasty decision in the light of several unresolved concerns that have the potential of impacting the Nigerian economy negatively.

He explained that just like SAATM, African Passport, Continental Financial Institutions (Currency & Taxes), the AfCFTA is a flagship project of the African Union Agenda 2063 and is aimed at creating a single continental market for goods and services, with free movement of business persons and investments.

The AON Chairman warned that Nigeria cannot afford to rush into signing of AfCFTA which will give unfettered access into the Nigerian market and is likely to erode the good work government has so far put in place to diversify the economy and reverse the gains of the present administration in reviving the economy out of recession.
Using the signing of SAATM as an example, domestic operators advised that government should slow down on the implementation and stressed that some of the concerns of AON as regards the potential impact if hastily implemented on the Nigerian economy and Nigeria as a whole as well as the future of our youths include the following: Issues concerning the issuance of visas, uneven taxation and multiple charges,
unrealistic competition and unfair trade, lack of adequate consultations,
lack of impact assessment studies, imbalance in market access and no clear policy direction. The airlines recommended that national interest must be given priority and domestic airlines must be empowered and taxes against the domestic carriers reviewed downwards, while VAT is totally eliminated by the federal government.
AON also cautioned against visa free movement, pointing out that the basic issue of visa free movement of people and trade is an integral aspect of SAATM and AfCFTA that would go a long way to determine the fairness of the project.

“Sadly, it is a Herculean task for Nigerians to get visas to travel into many African countries. Nigerians require over 34 visas to travel within Africa alone. This is an issue that needs to be addressed first before the full implementation of SAATM or the signing of AfCFTA.

“For instance, a country like Ethiopia, which is a strong pusher of this treaty, makes 45 per cent of its income from Nigeria, yet it has not employed Nigerians as air crew or ground technical staff, drains our beloved country’s resources to contribute 32 per cent of their national GDP at the expense of the Nigerian economy and our ailing youths who have no jobs, and capital flight on our scarce foreign exchange. It is worthy of note that Ethiopia has a Visa on Arrival policy for over 40 countries. But sadly, and with disrespect, Nigeria is not included among them,” Meggison said.

AON spoke about uneven taxes and saying while the initiative is a laudable idea and could be considered as a step in the right direction, the airlines are however concerned that the timing is not right as there are several unresolved issues faced on daily basis by Nigerian airlines and manufacturers.

“These border on unfriendly policies, high interest rates, levies, VAT, unavailability of forex, multiple taxation, charges and fees, and a hostile operating environment all of which puts Nigerian local businesses at a disadvantage to other African States that are largely government owned and heavily subsidised.

“For instance, foreign airlines are exempted from VAT both in Nigeria and in their home countries. But Nigerian airlines have to pay VAT. Jet A1 (aviation fuel) is a lot cheaper in many other African countries and mostly subsidised by the government for their airlines. On the contrary, airlines in Nigeria are made to pay exorbitant prices in excess of N250 per litre for the same product. Availability of electricity supply is still a huge challenge for Nigerian businesses and the tariffs are too high compared to those across the continent,” Meggison also said.

The government is there advised to consider how germane the warning of AON is, vis a vis opening up the potentially huge African market to Nigerians and others.