• Thursday, February 22, 2024
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BusinessDay

CBN, foreign airlines clash over $700m trapped funds

There is a disagreement between the Central Bank of Nigeria (CBN) and foreign airlines regarding the payment of the total unpaid ticket revenue in Nigeria.

The CBN announced on Tuesday that it had settled all verified claims by foreign airlines, disbursing an additional $64.44 million.

This brings the total amount paid to the aviation sector to $136.73 million, with the CBN confirming the clearance of all verified airline claims.

In a statement titled “FX Backlog: CBN Concludes Payment of All Verified Claims By Airlines” and issued by the CBN Acting Director of Corporate Communications, Hakama Sidi Ali, the apex bank announced, “The Central Bank of Nigeria, fulfilling its pledge to clear the backlog of foreign exchange owed foreign airlines in the country, has concluded the payment of all verified claims by airlines with an additional $64.44 million to the concerned airlines.”

The statement emphasised the unwavering commitment of CBN Governor Olayemi Cardoso and his team to clear the verified backlog of payments across all sectors, restoring confidence in the Nigerian foreign exchange market.

Additionally, Sidi Ali assured Nigerians of CBN’s efforts to improve liquidity in the forex market, alleviating pressure on the naira.

However, the International Air Transport Association welcomed the latest $64.44 million payment but highlighted that approximately $700 million remained unpaid, urging further action.

In a statement, the Geneva-Switzerland-based body representing global airlines said, “IATA welcomes the Central Bank of Nigeria’s announcement this afternoon that it has released an additional $64.44 million in blocked airline funds. While this development is encouraging, it’s crucial to recognise that approximately $ 700 million remains blocked with Nigeria’s commercial banks.

“As such, there’s a considerable journey ahead in fully addressing the issue. This is exacerbated by the devaluation of the Nigerian naira, which has dropped significantly against the dollar. Airlines should not be unfairly penalised by the lower exchange rate.

“We will continue to monitor the situation closely and work with the government to ensure that the environment remains conducive to ensuring Nigeria’s connectivity to international markets.”

The Nigerian naira hit an unprecedented low against the US dollar, plummeting to N1,400/dollar, according to FMDQ Exchange data on Monday.

Over the past three months, the Central Bank of Nigeria (CBN) has cleared $2.5 billion in overdue foreign exchange debts.

In further efforts, the CBN released $500 million to various sectors to address verified foreign exchange transactions.

The CBN calls for public support for forex market reforms to maintain orderly and professional conduct in determining exchange rates.