How exchange rate jerked up hajj fares

Daily Trust Publish Date: Jun 25 2017 2:00AM

Sitting inside his stuffy and barely lit shop in Abubakar Gumi Central Market Kaduna, Baban Aisha was at  a loss as what to do about his mother’s planned hajj pilgrimage this year.

This trader made a deposit of N1million with the Kaduna State Muslims Pilgrims Welfare Board late last year for the pilgrimage. 

Pointing at the nearly empty shelves in his shop, “but the truth is that, I can’t pay up the balance of the N535,000 for my mother to travel to hajj as earlier planned,” the children’s wares trader said.

“As you can see, this shop is nearly empty because I can’t travel to Cotonou and Togo to buy the children’s wares anymore because of the exorbitant exchange rate. The naira to CFA Franc exchange rate which has more than doubled in the last one year has sent many of us out of business,” the trader who performed hajj in 2015 said.

The naira currently exchanges with the US dollar between N367 and N370.

Baban Aisha is one of the many Nigerians whose ambition of going to hajj or sponsoring their loved ones is being threatened by the exorbitant exchange rate.

The rise of hajj fare from an average of N1million in 2016 to N1.5million this year is generating debate with the National Assembly calling for its reduction to N800,000.

Investigations by Daily Trust on Sunday revealed that the hajj fare was primarily jerked up by prevailing exchange rate because about 98 percent of the hajj fare are paid in dollar component.

The intending pilgrims are to access the dollar at the Central Bank exchange rate of N305.

If not for the exchange rate, the 2017 hajj fare would have been much lower than what was paid last year, according to nine-year official data on hajj fares analysed by this newspaper.

Cost of exchange rate in hajj

Daily Trust on Sunday analysis of official documents from the Central Bank of Nigeria and National Hajj Commission of Nigeria (NAHCON) showed that there were no significant changes of the dollar components of the hajj fare in the last nine years.

The hajj fare ranged between $3,404 in 2009 and  $4,752 in 2017. The highest being $5,026 in 2016.

Stakeholders said the prevailing exchange rates over these years determined the fare paid by Nigerian pilgrims.

In 2009, for instance, the total hajj fare package with $750 Basic Travelling Allowance (BTA) was $3,404.95, which translated into N470,736 at that year’s official exchange rate of N135 to a dollar.

In 2010, the hajj fare package was $3,484.54, which became N482,679 at the exchange rate of N135 to a dollar.

By 2011, the package was $3,766.44 and the exchange rate was N154 to a dollar, which made it N591,798. 

In 2012, the total package was $4,112.86, with an exchange rate of N145 to a dollar, making it N613,644. 

By 2013, the total package was $4,234.12 which translated into N636,496 at the exchange rate of N146 to a dollar.

The package slightly rose to $4,451.65 in 2014, translating into N686,061 at N150 to dollar exchange rate.

At the exchange rate of N160 to dollar in 2015, the total hajj package of $4,671.43 was N758,476.

In 2016, the hajj package rose to $5,026.40 which translated into N999,248 at the exchange rate of N197 per dollar.

But for the first time in nine years, the total hajj package in 2017, dropped by $300 from last year’s $5,026.40 to $4,725.41. 

Despite the drop of the hajj package to $4,752.41 from last year’s, pilgrims will still pay N1,526,590, about N500,000 higher than what they paid in 2016 because of the prevailing exchange rate of N305 to a dollar.

This means that at the exchange rate of N305 to dollar, Nigerian pilgrims would have paid N1,533,052 in 2016, N1,424,786 in 2015, N1,357,753 in 2014, among others.

The cost of major components of the hajj package which includes air fare, Makkah and Madinah accommodations, which have been the source of the ongoing controversy have not changed significantly during the nine-year period reviewed by Daily Trust on Sunday.

For instance, the air fare was between $1,500 in 2009, $1,700 in 2016 and $1,650 in 2017, recording only $200 increase in the last nine years.

Analysis of the data shows that Nigerian pilgrims paid $1,500 as air fare in 2009 and 2010; but the figure rose to $1,600 in 2011.

But the pilgrims paid $1,700 from 2012 to 2016, until it was reduced to $1,650 in 2017, for the first time in nine years.

For Makkah accommodation, what the pilgrims paid ranged between $666.67 and $1,067.23 for the nine-year period under review, according to the official figures.      

In 2009, Nigerian pilgrims paid $666.67 for accommodation in the birth place of Islam. They paid $666.29 in 2010; $800.75 in 2011; and $933.83 in 2012. 

The Makkah accommodation fare slightly rose to $1,067.24 in 2013, and remained same for 2014, 2015 and 2016.   

For the 2017 hajj, the Makkah accommodation for the first time in nine years, dropped to $960.51, according to the data reviewed by this newspaper.

For Madinah accommodation, the rate ranged between $93.33 and $617 for the period under review. 

The pilgrims paid $93.33 and $97.42 in 2009 and 2010 for their eight-day accommodation in the Holy Prophet’s city. 

They paid $143.07 in 2011; $153.81 in 2012 and 2013; $221.37 in 2013; $369.91 in 2015 and $617 in 2016.

Like other components, the rate of Madinah accommodation was slashed to $430 in 2017, saving the pilgrims $187.

Other dollar components of the hajj fare are feeding at Masha’ir (Muna and Arafat) $85.38; air condition at Arafat ($74.71); feeding at Makkah and Madinah for average of 35 days ($280.15); Basic Travelling Allowances ($800); and feeding at airport ($4).

Other hajj fare components that are fixed charges by the Saudi Arabian authorities include United Agents fees ($322.57); tent security deposit ($1.33); Tent C ($73.37); Ministry of Hajj deposit ($13.34); Muassassah Arafat PVC tent ($80.04); and one percent Central Bank of Nigeria commission charge ($40.15).

The remaining two percent hajj fare component are local charges by NAHCON and the 36 State Muslim Pilgrims Welfare Boards/Agencies and the Federal Capital Territory (FCT). 

They include NAHCON administrative charges (N3,000); Hajj Development Levy (N5,000); two-unit suitcases (N16,655); uniform (N5,000); yellow card (N1000); SMPWB administrative charges (N3,000); registration form (N1,000); and hadaya sacrificial animal which is optional.

The dilemma of many Nigerians such as Baban Aisha has triggered various reactions from hajj stakeholders who proffered solutions to the ongoing debate on how to lower the 2017 hajj fare.

N200/$1 concession for pilgrims - Hajj Reporters  

Independent Hajj Reporters, a faith-based civil society organisation, has appealed to the federal government to grant a N200 to a dollar exchange rate concession for 2017 intending pilgrims to lower the hajj fare.

The national coordinator of the organization, Ibrahim Muhammed said “we acknowledge the policy of this government of non- sponsorship of people on pilgrimage, it is equally important to note that pilgrims are helpless when it comes to monetary forex policies.”

We oppose further subsidy of hajj - MURIC 

The Muslims Rights Concern (MURIC) had asked Nigerians not to blame the NAHCON for the increase in this year’s hajj fare.

The Executive Director of the rights group, Professor Ishaq Akintola, said MURIC opposes further subsidy for hajj this year for three reasons. Firstly, FG has already subsidized 2017 hajj because the official exchange rate is N368, whereas FG allowed N305. Pilgrims would have had to pay N1,768,240 (approximately N1.8m) at the prevailing bank rate of N368 per dollar if FG had not subsidized at all.

“Secondly, Nigeria is in recession and Nigerian Muslims must be prepared to make sacrifices as government cannot afford to play the prodigal son at a time like this. About N34 billion would be needed to subsidise if pilgrims were to enjoy the 2016 rate of N197 per dollar but this cannot be rationalized in the face of the current recession.

 “Thirdly, every special concession granted to Muslims is most likely to become a subject of controversy as Christian groups are most likely to challenge FG for taking such an action. We must take the diverse character, of our country into consideration at all times,” he said.

FG should handover hajj matters to us - NSCIA

The Nigerian Supreme Council for Islamic Affairs (NSCIA) said the federal government should handover hajj affairs to it, a statement signed by its director of organisation, Isa Okonkwo, said.

“Federal Government of Nigeria should hand hajj-matters (except consular & security) to the Nigerian Supreme Council for Islamic Affairs (NSCIA). It is government involvement that is responsible for the high cost for obvious reasons,” it said.

The NSCIA’s intention of taking over hajj matters is coming at a time when the council is having challenges in appointing Imams (prayer leaders) for the mosques under its control, Barrister Muhammad Imam, a Muslim rights activist said.

“It is laughable for the NSCIA to even contemplate taking over hajj matters. One, NAHCON is a government agency created by law to regulate hajj matters in the country. Two, the National Mosque Abuja, under NSCIA control has no substantive imam since the death of Sheikh Musa Muhammad over a year ago. Three, the Sultan Bello Mosque Kaduna, under NSCIA control was converted into war zone for three consecutive weeks over the appointment of an imam.

“If the council cannot perform its rudimentary function of appointing an imam of a mosque, isn’t it funny for it to say it will managed complicated and sophisticated matter like hajj, Barrister Imam said.    

NSCIA involved in hajj fare fixing - NAHCON 

The secretary of NAHCON, Dr Muhammad Tambuwal said that the Supreme Council for Islamic Affairs, was “fully” involved in negotiations that led to the 2017 Hajj fares.

Speaking at a media parley organised by the FCT chapter of Nigeria Union of Journalists, NUJ, in Abuja, Tambuwal said that position could not be that of the NSCIA. 

He said the NSCIA has a member on the NAHCON board who “is a professor of Arabic and Islamic Studies in the University of Ibadan, and he was part of the committee that fixed the hajj fares.”

The commission secretary said apart from the NSCIA, a representative of the Jama’atu Nasril Islam (JNI) also sits on the board and was part of the negotiating team on the fares. 

“So, I believe the press statement is the opinion of the writer and not that of the NSCIA management,” Dr Tambuwal said.

He said NAHCON keeps NSCIA appraised “on all developments including negotiations on the hajj fare.”