Families and individuals may find it difficult to take vacations when the summer break starts because of Nigeria’s or the world’s economic situation.
Your plans to take your dream vacation in 2023 may be thwarted by weakening naira exchange rate, rising global inflation, high cost of transportation, and travel bans, including tough visa requirements against Nigeria in some countries.
Summer vacations take place from June and September, and individuals, couples, and families use this time to travel for leisure. Only a small portion of these travel locations are domestic, with the remainder abroad. Nigerians are mostly drawn to these tourist attractions for shopping, as well as recreational and religious ceremonies.
Data show that Nigerians spent $5.8 billion on outbound travels in 2021 – 1.33 percent of Nigeria’s GDP in 2021. However, compared to 2019 when the overall travel expenditure was $16.4 billion, Nigerians’ spending on outbound tourism has fallen by 64.4 percent. Given that Nigeria’s economy has weakened over the past few months, the possibility of summer vacations for many is far-flung.
Exchange rate risk
When a currency’s value increases, it is said to have appreciated. In contrast, when a currency’s value decreases, it is said to have depreciated.
The naira has weakened against the dollar over the past few months in the official Nafex window – from N416 to N460. Nigerians typically exchange their dollar at the black or parallel market. Dollar is not easily accessible by some kinds of business at the official market, prompting many to trade at the parallel market. The average black market exchange rate for the dollar to the naira ranges from N750/$ to N766/$.
Global Inflation
Inflation has risen globally, which has increased the cost of goods and services. The global inflation rate increased from 4.7 percent in 2021 to 8.75 percent in 2022 and is projected to further rise in 2023 due to Russia’s war in Ukraine and US-China trade war.
According to the International Monetary Fund (IMF), global inflation had continued to peak amid low growth. Russia’s war in Ukraine and the after-effect of the rapid spread of COVID-19 continue to weigh heavily on economic activity and have dampened global growth.
Hence tourists and travellers are expected to spend more on goods and services this year than two or three years ago. Travel agents advise that those planning to travel must make adequate preparations for the summer.
“In the UK, there is cost of living crisis. Same in some parts of Europe due to Russia’s war in Ukraine. You have to make adequate preparations for this year’s summer vacation so that you do not get stranded,” a Lagos-based travel agent, Joshua Adeyemi, advised.
High prices of flights/transport
The National Bureau of Statistics |(NBS)’s February 2023 transport fare watch showed an increase in the cost of transportation. Tickets for domestic flights grew in price by 66.63 percent from the previous year. Intercity bus fares climbed by 4.02 percent, with an average commuter paying N3,990.70 on each trip. The cost of transportation has changed from the previous year, making domestic vacations more difficult.
Airlines have faced several difficulties, including flight delays and cancellations.
For the international travel, a return ticket from Nigeria to London on British Airways costs $1,733.2 plus taxes, equivalent to N797,272.
Another potential threat to vacations is the travel restrictions and delays in obtaining visas for Nigerians. Apart from a few African and Asian nations where Nigerians can obtain visas upon arrival, the visa application processes and conditions are typically strenuous and can occasionally lead to Nigerian applicants being refused.
Nigerians and nationals of 19 other African countries have lately been refused visas to Dubai, the capital of the United Arab Emirates, one of Nigerians’ most popular vacation destinations.