• Friday, March 01, 2024
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BusinessDay

Airlines threaten strike in Nigeria over dollar settlements

Nigeria tops list of foreign airlines’ debtors – IATA

Foreign airlines in Nigeria are threatening to strike unless the government allows them to repatriate their earnings trapped in the West African nation that’s been grappling with an acute dollar shortage.

The Association of Foreign Airlines and Representatives in Nigeria, the umbrella body for international carriers operating in the country, has criticized the government for settling only $61 million of the $800 million in total funds they want to take out.

“It’s money from other countries that we’re using to run services in Nigeria,” Kingsley Nwokoma, president of the association, said by phone. “If you’re not being paid, you can’t be in operations,” he said, adding the group will consider going on strike.

Despite forex reforms and a devaluation of the naira last year, Nigeria has been struggling to attract foreign currency inflows, leading to a severe dollar scarcity. The carriers, which sell their tickets in naira, are unable to repatriate those proceeds in dollars and meet their spending needs.
Aviation Minister Festus Keyamo, after meeting with representatives of the airlines last month, pledged to help with the backlog but acknowledged that the association needed much more.

Central bank Governor Olayemi Cardoso has also promised to settle the backlog for various industries and market segments. The huge unmet demand is discouraging forex inflows, helping to put pressure on the naira which has lost more than 50% of its value since 2023.