Naija loses $7bn to capital flight in aviation

As at the end of 2014, the aviation sector in Nigeria had lost about $7bn to capital flight, this according to experts in the sector.

The amount according to a ThisDay report included funds moved overseas by international carriers, and money spent by local airlines for aircraft maintenance and spares.

Two years ago, the World Bank put the total money taken overseas from Africa to about $10 billion and Nigeria’s contribution to about 60 per cent.

Nigeria is said to be the highest contributor to capital flight from Africa in the aviation sector because over 90 per cent of its international traffic is serviced by foreign carriers. Also, the technical manpower in the industry are expatriates and Nigeria does not have major maintenance facility, so every critical check is done overseas.

To cut down the huge resources taken overseas, industry experts are of the view that Nigeria must have major maintenance facility, strong airlines that would erode the dominance of foreign carriers in airlifting passengers to international destinations and government should also review multi entry of foreign carriers.

They noted that if Nigeria has strong airlines, the country will introduce a policy that will make it compulsory for international operators to code-share or partner with domestic airlines.

That, they further argued will help to keep some money that are today taken overseas in the country as the local airlines would distribute passengers to domestic destination and receive technical support from their foreign counterparts, which may include training.

Besides, more than 85 per cent of the revenues earned by foreign carriers are repatriated, local carriers also take huge resources earned locally to pay for aircraft parts, maintenance and expatriates employed by the airlines also repatriate their remuneration overseas.

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