Nigerians who were billed to travel to attend the African
Development Bank Annual Meeting and Conference in Abidjan were
stranded at the airport as a result of the fuel crisis that ended on
Monday. Many could not travel outside of the country as delegates
attending the banking conference in Ivory Coast were left stranded
or forced to pay additional costs after planes were grounded.
Arik Air Ltd., Nigeria’s biggest airline, delayed or canceled dozens of
flights since the weekend as guests prepared to make their way to
Abidjan to attend the African Development Bank’s annual meeting.
The conference draws finance ministers and central bank officials
from across the continent and is a networking opportunity for
bankers.
Andrew Alli, the chief executive of Africa Finance Corp., spent extra
money on backup travel plans rather than miss the event. His team
booked flights from Lagos, to Abidjan via Ghana’s capital, Accra,
and Lome in Togo, on different airlines. “This is one of the hidden
costs of doing business within Africa,” Alli said in an interview at the
AfDB meeting on Tuesday.
“We knew there was a fuel strike in Nigeria and it had been affecting
domestic flights. As a precaution, as we felt it would start to affect
international flights, we booked a second flight to Abidjan.” Flying in
West Africa is often beset with difficulty due to under-equipped
fleets, departure schedules that demand long layovers, strict visa
regulations and costly tickets. The number of air passengers
traveling both domestically and internationally in Nigeria surged to
3.75 million in 2013 from 520,263 in 2003, according to World Bank
data.
Banks Shut
A big focus of the AfDB’s work and its annual conference is on
expanding infrastructure on the continent to help spur investment
and reduce the cost of doing business. The bank estimates African
nations need to spend $93 billion each year until 2020 to help fix
power shortages, inadequate water supplies and expand transport
and Internet networks.
A lack of oil refining capacity means Nigeria suffers frequent fuel
shortages even though it’s Africa’s biggest crude producer of about
2 million barrels a day. The latest crisis shut banks and threatened
operations of businesses including MTN Group Ltd., the biggest
mobile-phone company on the continent. Gasoline and diesel
retailers had halted distribution because they said the outgoing
government of President Goodluck Jonathan owed them about $1
billion in outstanding payments.
President-elect Muhammadu Buhari will take over from Jonathan on
May 29, causing anxiety among the fuel marketers that the new
government may take longer to pay the claims. They agreed late on
Monday to resume supplies. The fuel shortage is “a sign of a poor
management which will disappear very soon,” former Nigerian
President Olusegun Obasanjo said in an interview in Abidjan. “We
should not worry about it. It’s an aberration. An aberration comes
and goes.”
Meanwhile MTN Group, said yesterday that its Nigerian services
continued to be hampered despite the end of a fuel strike on
Monday. Nigeria, its biggest market, has been suffering acute petrol,
diesel and aviation fuel shortages for the last few weeks due to a
strike by marketers and distributors over non-payment of subsidies
by the government.
Nigeria subsidizes petrol and must import the bulk of the 40 million
litres a day that it consumes owing to a neglected refining system.
A dilapidated and grossly inadequate power grid means businesses
and households depend on diesel for electricity. “Diesel is still not
easily available at this time in spite of the end of the fuel strike. It is
likely to take some time for normality to be restored,” Funmilayo
Onajide, a spokeswoman for the company, said.
Other local telecoms operators also warned customers of reduced
services and banks said they would start closing their branches
early from Monday. Airlines, particularly Arik Air, have been forced
to cancel or delay domestic flights. With an impending change in
government on May 29, stakeholders across the fuel supply chain
were concerned that the incoming government may not payout the
remaining subsidy debt. Marketers said they were owed around $1
billion.
Most importers stopped bringing in tankers and depots were
shutdown to deprive retailers of the gasoline and diesel to put
pressure on the finance ministry. President-elect Muhammadu
Buhari is expected to closely review the subsidy scheme, which was
revealed to have paid out over $6 billion in fraudulent claims in
2012.
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