Dubai luxury shops are also suffering the effects of the depreciating naira as the amount of Nigerians who shop with them have reduced drastically.
Dubai luxury shops are feeling the absence of Nigerians who have been kept away from their usual travels to Asia’s shopping capital by a weaker naira and higher airfares.
Nigerians who typically buy huge volumes of luxury goods such as gold and assorted jewelries and wristwatches as well as clothes, fabrics, shoes , other accessories and electronics, are cutting down on their expenses as a result of the economic downturn, dollar scarcity and high air fares.
“Before now, purchases from Nigerians made up about 18 percent of our market share, but it has dropped to about eight percent this year. I tell you the truth, we really miss Nigerians here and we hope things get better so that they can shop again as they used to,” Bilal Chaouch, sales manager, Paul Smith, a unisex luxury fashion clothing outfit told BusinessDay in Dubai.
Chaouch explained that between the months of September and November, the fashion outfit buys clothes in bulk, in anticipation of the influx of Nigerians who come in to shop for the festive period. He said that has not been the case this year, as Nigerians are nowhere to be found in the numbers that they used to come, leading to a sharp drop in demand.
“We hope the government in Nigeria will help provide dollars for Nigerians to come and shop here as they use to do. We hope things get better because patronage by Nigerians has been part of our success story,” he added.
Johanna Pascual, sales manager, Accessorize, a luxury accessory shop in Dubai also said she is missing the patronage from Nigerians. Pascual explained that Nigerians often bought accessories in large quantities but there has been a sharp drop in sales of accessories this year because only few Nigerians have been visiting recently and those who come do not buy as much as they used to.
“I always believed Nigerians were very rich people because when they came to buy gold, they always bought in large quantities and paid immediately. But that has changed now. We have not sold as much as we sold accessories by this time last year,” Pascual disclosed.
Gilbert, a sales representative of Timex, a wristwatch brand at the Dubai shopping mall said he has observed a sharp drop in demand from Nigerians for luxury brands.
The Dubai attraction has lost its shine as Nigerians now struggle at the airports to get dollars to travel unlike before when they could easily travel with the cards and shop in over 200 countries around the world.
As a BusinessDay reporter prepared to travel to Dubai on November 1, she noticed at least two people cancelled their flights because they could not get dollars at the rate of N385 from Travelex, as against N468 in the black market after waiting for over nine hours on the queue.
“I am so frustrated because I have been standing in this queue since 8.am this morning. I have bought my ticket and my flight is scheduled for take off in the next one hour but it is impossible for me to travel if I do not buy dollars from Travelex because it appears this is the only avenue to get dollar at the rate of N385,” a business traveller (name withheld) complained bitterly. The only option for me now is to cancel my flight and pay an extra N60, 000 because I am a business woman and I cannot travel without having money on me to buy my goods,” the business traveller added.
Emirates, which is the dominant airline of the Lagos to Dubai route has in the last 10 years airlifted 2.6 million passengers on the route making as much as N22.4 billion in tickets sales in Nigeria in 2012, against the N30.5 billion it earned in 2011, according to the Nigerian Civil Aviation Authority.
While the bilateral trade volume between Nigeria and UAE increased to $857 million in 2009 from $106 million in 2004, the volume which surged to almost $1 billion in the first quarter of 2015, has dwindled to to less than $900 million on the account of economic downturn in Nigeria resulting in high cost of foreign exchange and airfare spike.
Before now, Dubai, which accounts to over 80 percent of the Nigerian-UAE trade volume, hosted over 300,000 Nigerian visitors annually, 60 percent of whom were holiday makers, 30 percent for business, while education and healthcare shared the remaining 10 percent, according to the data from Dubai Tourism.
Ibrahim Auwalu, Nigeria’s Ambassador to the UAE, disclosed that about 90 percent of the trade between both countries is informal and fueled by over 300,000 Nigerians who spend more than $110 million (N18 billion) annually on UAE visas.
Besides holiday packages, most traded items by Nigerians include: gold, jewelry, fabric, shoes and other fashion accessories.
However, with the economic downturn, less than 200,000 Nigerians have visited Dubai in the last 10 months. Confirming the dwindling number of visitors from this country to the UAE, the Nigerian Civil Aviation Authority noted that total passenger traffic at Nigerian international airports declined by 6.9 percent in the first quarter of 2016 (Q1’16) and 0.5 percent in second quarter (Q2’16).
The figure is expected to decline further if the economic downturn persists.
Furthermore, the surge of Nigerians to buy properties in Dubai has reduced by almost 40 percent. According to First Group, Dubai’s leading property developer, with the intensified fight against corruption by the Economic and Financial Crimes Commission (EFCC), a lot of their would-be Nigerian clients are scared of buying properties in Dubai now, even those who made genuine money.
A source in the company said that a Nigerian celebrity from Lagos who made a 40 percent initial payment for an N800 million three-unit property in Dubai last year has not made further payment since then because of the forex limitations, as the property is priced in dollars.
The site’s source however said that despite the economic downturn, Nigeria still leads other African countries in ownership of choice properties in Dubai, with over 500 properties and business partnerships.