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Air cargo volume reduced over rising inflation

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By Usman Oladimeji

Rising production costs impact the number of cargo movements.

The amount of air cargo being handled at Nigerian airports decreased in 2023 due to a rise in inflation. Factors like increasing production costs, reduced purchasing power, and high exchange rates have had a big impact on the amount of air cargo moving through Nigerian airports. The Nigerian Aviation Handling Company (NAHCO) saw a drop of six percent in the total amount of cargo it handled, going from 65.65 million kg in 2022 to 61.09 million kg in 2023. A decrease in all services, including import, export, and courier, led to the decline. NAHCO experienced a 6.7 percent drop in total import, decreasing from 47.08 million kg in 2022 to 43.88 million kg in 2023.

In 2023, the company experienced a decrease in export, dropping to 14.14 million kg from 13.44 million kg the previous year. At the same time, Skyway Aviation Handling Company (SAHCO) saw a reduction in total tonnage, down to 63.56 million kg in 2023 from 68.23 million kg in 2022. This shift was due to a drop in import numbers, offset by an increase in export for SAHCO. SAHCO experienced an increase in exports to 17.34 million kg in 2023 compared to the previous year’s 16.34 million kg, and a decrease in total imports to 46.22 million kg from 51.89 million kg.

Decrease in imports is contracting the economy.

Seyi Adewale, CEO of Mainstream Cargo Limited, expressed to the media that the decrease in cargo volumes moving through Nigerian airports is mainly due to rising production costs that cannot be easily transferred to consumers because of declining purchasing power. These increased expenses consist of diesel prices, supply chain costs from airfreight, fuel surcharges, and higher exchange rates influenced by CBN on the Customs Currency Exchange Platform. Other cited factors include increased expenses for local transportation and distribution, as well as the closure or temporary shutdown of manufacturing companies like SmithKline Beecham.

Certain regulations or rules imposed by the federal government to encourage or coerce businesses in Nigeria to utilize locally sourced materials have had an impact on cargo volumes. Ikechi Uko, the mastermind behind the Aviation and Cargo Conference (CHINET), shared with the media that the economy was contracting due to a decrease in imports, indicating a reaction to the economic climate and circumstances. He noted that frequent deliveries of goods by a large group of freighters have now become rare, with only a few flying in on specific days.

Notable airlines suspended their flights into the country.

A significant amount of goods entering and leaving Nigeria are transported via the belly hold of airplanes. Efforts to boost exports are on the rise, with a noticeable surge in energy and activity. The decreasing tonnage serves as a clear indicator of the lackluster performance of our economy, revealing that we have not fared well, Uko noted. Last year, reports emerged that due to a shortage of foreign exchange and funds being held up, cargo planes tailored for carrying goods ceased operations in Nigeria. Prior to the commencement of the airlines’ fund-related challenges in the country, cargo planes would make frequent trips to Nigeria, arriving three to four times each week.

However, recent data has indicated that the majority of cargo airlines have ceased operations in the country. Notable airlines such as Cargolux, Saudi Cargo, and Emirates Cargo have all suspended their flights into the country. Only Turkish Airlines continues to conduct limited operations in Nigeria, with occasional interruptions that sometimes result in no flights to the country for an entire week. Cargo is now being stored in the belly compartment of passenger aircraft by airlines.

Related Article: FG moves to eliminate export cargo rejection

Importers and exporters of substantial cargo are being forced to rent cargo planes at extremely high prices to transport their goods into Nigeria. There are currently no freighter cargo airlines operating in the country. Previously, airlines like Cargolux used to fly into Nigeria three to four times a week, but they have all ceased operations. Kingsley Nwokeoma, president of the Association of Foreign Airlines and Representatives in Nigeria (AFARN), told the press that there are currently no freighter cargo airlines operating in Nigeria.

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