Home Sidi Sanneh's Airport/border security tax will result in D167m decline in GDP and approximately...

Airport/border security tax will result in D167m decline in GDP and approximately 2,000 job losses, says IATA


This post was the first in a series of four previously published
blog posts on the $40 airport security surcharge on arriving
and departing passenger at the Banjul International airport
that the government is poised on putting into effect on the 1st,
October, 2019. First publication November 12th, 2018
————————————————————–

The International Air Transport Association (IATA), the trade association of the world’s airlines has issued a stern warning to the Government of The Gambia against its decision to introduce what the Barrow administration labeled as border security tax, if levied as is, will have a devastating impact on tourism and air travel into the country.

It is a $20 tax schedule to take effect on the 15th January, 2019.  Initially, the proposal was for a $40 tax  subsequently halved to its current level which will still going to impact both the economy and tourism negatively, according to industry experts.

Based on industry figures, the introduction of the border security tax will result in 8,500 fewer passengers departing from Banjul International Airport.  The impact will be shared between those travelling within Africa (- 4,200) and those travelling to/from Europe (- 4,000).

The impact to the economy will be equally devastating.  Based on the UN’s World Travel Organization (WTO) estimates, 35% of visitors to The Gambia arrive by air and the percentage of those coming from outside West Africa is assumed to be 100%.  The World Travel and Tourism Council (WTTC) on the other hand estimates that total travel and tourism account for 20.1% of Gambia’s GDP, generating D9.8 billion and supporting 107,500 jobs.

Consequently, a 5% reduction in demand would lead to a reduction of D167 million in GDP and a reduction of 1,835 in the number of jobs supported by aviation.

IATA’s warning to the Barrow administration was accompanied with a reminder to its international obligation as member of International Civil Aviation Organization (ICAO) whose regulatory functions include policies on charges and taxation for decision-making processes, based on these four principles namely: (i) non-discrimination (ii) transparency (iii) cost relatedness and (iv) consultation with users.

As regards to cost relatedness, IATA is yet to be convinced that adequate consultations took place between government and airlines.  They are, therefore requesting that airlines operating in the Gambia be provided with information on the cost bases of the tax, supported with a breakdown of revenues and costs as well as traffic forecasts and airport activities.

In the absence of user consultation and transparent financial information, IATA and its member airlines will not be in a position to evaluate and appreciate the cost relation of the immigration/security services that will be provided and the level and structure of the related user charges.  IATA is thus requesting that a proper consultation mechanism be established so the requested information can be jointly analyzed.

IATA’s letter to the Hon. Lamin Jobe, Minister of Transport, Works and Infrastructure dated 6th November, 2018, is recommending the suspension of the border security tax based on the issues raised therein that includes what is referred to as “a meaningful consultation and proper discussions with the airlines.”

As regards the introduction of the new immigration/security measures, performance indicators – such as waiting time in security queues, passenger satisfaction, number of security staff, number of passengers screened per hour etc. – must be put in place to measure the quality of service, productivity and cost effectiveness of the new measures.

Government has yet to respond to the IATA letter and the threats by local tour operators to withdraw from the Gambian market or scale back their operations.  The Government has suddenly find itself in yet another dilemma that threatens the country second biggest foreign exchange earner – tourism.  It appears that the government has committed yet another infraction of standard procurement rules and procedures by entering into a contract with SECURIPORT without inviting proposals from other companies that could provide the same service. *

                                                                      ####
* The subsequent blog posts we intend to take a closer look at the SECURIPORT contract, the procurement process and related issues.



Sidi Sanneh