• Monday, February 26, 2024
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BusinessDay

Senate charges CBN to release $717.4m airline trapped funds

Senate probes $2.4bn ‘invalid’ FX transactions

The Senate has urged the Central Bank of Nigeria (CBN) to release the $717, 478, 606 airlines blocked funds trapped in Nigeria.

The Senate also asked the CBN to allocate $25 million to airlines operating in Nigeria at its fourth-nightly dollar auction.

The resolutions were sequel to the consideration and adoption of a motion titled, “Current Issues on Airlines Blocked Funds in Nigeria” sponsored by Biodun Olujimi, chairman of the Senate Committee on Aviation, (PDP-Ekiti South).

Moving the motion on the floor of the Senate, Bala Na’Allah, the vice chairman of the committee, (APC-Kebbi) who represented Olujimi, informed that since January 2021, Nigeria has been the most challenging country in the world for the airlines to repatriate their funds to support their operation.

He said “In February, Nigeria alone accounted for 44 percent of total airlines blocked funds in the entire world.

“The total airlines blocked funds in Nigeria as of March 2023 amounted to $717,478,606, comprising matured bids that the CBN is yet to deliver, bids yet to mature and cash balances in airlines’ accounts for repatriation.

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“The matured bids not delivered by CBN amounted to $186.5 million amounting to 26 percent of total blocked funds while three stakeholders (IATA, Qatar Airways, and Ethiopian Airlines) accounted for 57 percent of total blocked funds;

“A review of airlines’ blocked funds in Nigeria in the last six months showed an average month-on-month increase of $49.3million

“The consequences of these blocked funds are: cheap tickets are not available in Nigeria because taxes and inflation would have eroded the profit when the funds are kept for a very long time.

“This makes tickets very expensive and limited because neighbouring countries get the cheap tickets because of prompt payments due to prompt repatriation of funds.

The Senators in their contribution supported the motion and voted to approve the prayers when they were put to voice vote by Ahmad Lawan, the Senate president.

The Senate called on the Federal Government to urgently reverse the current trend of increasing airline-blocked funds in Nigeria.

The Senate challenged President Muhammadu Buhari to direct Godwin Emefiele, the CBN governor, to pay up the blocked funds to the affected airlines and appealed to the airlines operating in the country not to withdraw their services while efforts are on-going to resolve the issue.