The International Air Transport Association (IATA) has said that Nigerian airlines and others across Africa will lose $700 million in 2022 due to a combination of Russia-Ukraine war and COVID-19. This was disclosed at the ongoing 78th IATA Annual General Meeting and World Air Transport Summit in Doha, Qatar. IATA said that inflation, interest and exchange rates would affect the growth of the aviation industry globally, stressing that countries should learn from the COVID-19 pandemic while adding that “at present, there are no circumstances where the human and economic costs of further COVID-19 border closures could be justified”. The IATA stated that the impact of Russia’s invasion of Ukraine on aviation paled compared with the unfolding humanitarian tragedy, adding that the rising fuel costs and a dampening demand due to lowered consumer sentiment would have a negative effect on the aviation sector. It said the Russian international market, Ukraine, Belarus, and Moldova accounted for 2.3 percent of global traffic in 2021, noting that about 7 percent of international passenger traffic would normally transit Russian airspace (2021 data), which was now closed to many operators, mostly on long-haul routes between Asia and Europe or North America. “There are significantly higher costs for re-routing for those carriers affected,” it said. It disclosed that just under 1 percent of global freight traffic originated in or was transited through Russia and Ukraine, but the greater impact was in the specialised area of heavy-weight cargo where Russia and Ukraine were the market leaders. It said at $192 billion, fuel was aviation industry’s largest cost item in 2022 (24 percent of overall costs, up from 19 per cent in 2021).

An analysis by The Punch of economic reviews by the Manufacturers Association of Nigeria, MAN, has shown that Nigerian manufacturers reduced their investments in the economy by 61 percent between 2018 and 2021. Jonathan Aremu, a Professor of International Economics at Covenant University said that Nigerian manufacturers are faced with a range of issues from multiplicity of taxes, lack of access to finance, high interest rates, issues of competitiveness to high cost of production which he attributed to huge energy cost that stems from low energy supply to industrial zones by electricity distribution companies. Many manufacturers have abandoned DisCos and are using 100 percent of gas to power their factories. According to The PUNCH’s computation of energy expenditure of members of MAN within the period, manufacturers spent ₦425 billion on alternative energy sources such as gas, low-pour fuel oil, diesel, and petrol between 2017 and 2021. Tajudeen Ibrahim,director of research and strategy, Chapel Hill Denham, said that the decline in investments could be attributed to foreign exchange scarcity and the effects of COVID-19 stating that there is scarcity of foreign exchange to import materials needed in terms of equipment and inputs. A dollar was priced at ₦415.82 at the Importers and Exporters Window on Monday, but its parallel market rate was ₦605-₦610. The parallel market provides alternative for manufacturers, but its rate hikes production costs, according to MAN which added that cost of funds for members who borrowed from deposit money banks rose from 20.75 percent in 2020 to 21.5 percent in 2021. At the third Monetary Policy Committee, MPC, meeting of 2022 in May, the Central Bank of Nigeria raised the monetary policy rate, which is the benchmark interest rate, from 11.5 percent to 13 percent hence making Nigeria’s rate among the emerging market’s highest, compared to South Africa and Namibia with rates at 4.75 percent and 4 percent respectively.

Nigeria’s debt servicing bill has increased by 109 percent to ₦896.56 billion. As a result, the country has also spent ₦3.83 trillion on debt servicing payments in 15 months, according to data obtained from the Debt Management Office. While a total of ₦2.93 trillion was spent on debt servicing payments in 2021, a total of ₦896.56 billion was spent in the first quarter of 2022. Nigeria’s debt position worsened in the first quarter of this year as the country’s debt stock rose by ₦2.04 trillion to hit ₦41.6 trillion from the ₦39.56 trillion recorded as of December 2021. Speaking at the launch of the World Bank’s Nigeria Development Update titled ‘The urgency for business unusual,’ held recently in Abuja, the Minister of Finance, Budget and National Planning, Zainab Ahmed, had expressed concern that the fuel subsidy regime was hurting Nigeria’s ability to service its debts. The International Monetary Fund, through its Resident Representative for Nigeria, Ari Aisen, warned that debt servicing might gulp 100 percent of the federal government’s revenue by 2026 if the government fails to implement adequate measures to improve revenue generation. Aisen said, “The biggest critical aspect for Nigeria is that we have done a macro-fiscal stress test, and what you observe is the interest payments as a share of revenue and as you see us in terms of the baseline from the federal government of Nigeria, the revenue almost 100 percent is projected by 2026 to be taken by debt service.”

Leaders of the East African Community on Monday (EAC) agreed to send a regional force to the Democratic Republic of the Congo to quell the latest flare-up of violence that is sweeping across the northeast of the country. DRC President Felix Tshisekedi and Rwandan President Paul Kagame joined leaders of Burundi, Kenya, South Sudan, and Uganda as well as Tanzania’s ambassador to Kenya to seek peace and call for the enforcement of an “immediate ceasefire”. The regional force received its operational mandate and outlined its operational structure, the statement said, without providing further details. “The problems affecting the region like the crisis in Congo need a collective approach from all regional members of the East African Community,” said Ugandan President Yoweri Museveni after the meeting. His government has sent in troops to help Congolese forces fight the Allied Democratic Forces, an armed group blamed for thousands of deaths in eastern DRC and a string of bombings in the Ugandan capital Kampala. The meeting comes as heavy fighting revives decades-old animosity between Kinshasa and Kigali, with the DRC blaming neighbouring Rwanda for the recent resurgence of the M23 militia which initially gained global prominence in 2012 when it captured Goma, on the border with Rwanda. Rwanda has repeatedly denied backing the rebels, while both countries have accused each other of carrying out cross-border shelling. Tshisekedi urged Britain, in particular, to “pressure Rwanda to withdraw its troops from our land”, noting London’s controversial agreement to send asylum seekers to Kigali. “Given the UK’s recent $150 millio immigration deal struck with Rwanda, we hope that Prime Minister Boris Johnson will be able to leverage his influence,” Tshisekedi said. Rwanda is due to host the Commonwealth Heads of Government Meeting this week.