The decision to suspend the United States Agency for International Development (USAID) for 90 days by President Donald Trump’s administration will lead to losses by different sectors of the Nigerian economy that benefit from aid, including the transport and hospitality sectors. Although that decision will leave a huge financial deficit in the health sector, it also impacts on air, road travel and hospitality industry, as workers who offer their services to the agencies supported by USAID engage in a lot of travel and cargoes like medical equipment and medicines are transported both by air and other means. The impact of the losses could be deduced from the funding USAID deployed to many causes in order to assist organisations and governments in the country to improve the lives of citizens. According to US State Department’s ForeignAssistance.gov, in the last 10 years USAID disbursed $7, 829, 000, 000 in aid to Nigeria and these included $446 million in 2015, $543 million in 2016, $643 million in 2017, $877 million in 2018 and $761 million in 2019. Others were $880 million in 2020, $922 million in 2021, $974 million in 2022, $1 billion in 2023 and $783 million in 2024. Over the last few weeks, Trump’s administration has made drastic changes to the US agency charged with delivering humanitarian assistance overseas, casting a bleak future to the NGOs funded by the agency in many countries. In the transport and hospitality sector, the Founder and Managing Director of Travel Lab Nigeria Limited, Mrs. Shalom Asuquo, said the suspension of USAID activities in Nigeria, was anticipated to have several financial implications for the country’s domestic aviation sector, particularly concerning the movement of USAID staff and associated personnel. She estimated the financial impact on domestic airlines, which included reduction in passenger revenue and explained that USAID’s operational scale in Nigeria has been huge. “In recent years, USAID has managed an annual budget exceeding $40 billion globally, with a significant portion allocated to programmes in countries like Nigeria. A considerable number of USAID employees, contractors, and partner organisation staff frequently travel within Nigeria to implement and monitor projects. “While specific figures for Nigeria are not publicly disclosed, if we conservatively estimate that USAID and its affiliates spent approximately $5 million annually on domestic air travel within Nigeria, the suspension could lead to a direct loss of this revenue for local airlines. “There are also ancillary revenue losses in areas like cargo services because USAID programs often involve the transportation of goods such as medical supplies and educational materials. The suspension may result in an estimated reduction of $500,000 in cargo-related revenues for airlines annually. “Also, the decreased passenger numbers can lead to reduced spending on services like lounge access and parking, potentially resulting in additional revenue losses of around $200,000 annually. “Then there are indirect economic effects in the hotels and hospitality sector. The decline in domestic travel by USAID personnel may also affect hotel bookings and related services, leading to a broader economic impact that could indirectly influence the aviation sector,” she disclosed. Asuquo disclosed that the suspension of USAID activities is projected to result in an estimated annual revenue loss of approximately $5.7 million for Nigeria’s domestic airlines, considering both direct and ancillary services. “While this figure is an approximation, it underscores the significant role that international aid organisations play in supporting the domestic aviation industry. Airlines may need to explore alternative revenue streams or cost-saving measures to mitigate the impact of such funding suspensions,” she said. On the impact of the Trump administration’s new policy on immigration, which includes clamping down on undocumented migrants, travel agents in Nigeria said this has not made any impact on air travel in terms of demand for tickets for those travelling to the US. The Group Managing Director of Finchglow Holdings Limited, Bankole Bernard, told THISDAY that the new US policy on immigration has made no impact in demand for flight tickets, describing the many reports about Trump’s policy as sensational. “The thing here is that US is picking immigrants that sneaked to the US through the borders. These people do not have records of their staying in the US. Those who obtain visas and travelled to the US are not the ones they are looking for. But if there are Nigerians who have spent time in the US without proper documentation; those are the ones that could be affected,” he said. Former President of the National Association of Nigeria Travel Agencies (NANTA) and Managing Director of Topaz Travels and Tours Limited, Mrs. Susan Akporiaye, told THISDAY that it was too early to witness any change in the Trump’s administration policy on immigration, noting that most of what are reported are mere speculations.
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