CBN Disburses $61 Million to Foreign Airlines

It has been reported by the Central Bank of Nigeria (CBN) that foreign airlines have gotten $61.64 million through different deposit money banks (DMBs).

Hakama Sidi Ali, CBN’s acting director of corporate communications, spoke in a statement on Sunday.

Ali stated that the CBN had redeemed almost $2 billion in outstanding forward liabilities in three months.

She said the disbursement fulfilled the regulator’s commitment to eliminating the pending matured foreign exchange (FX) backlog in banks.

She said,

• In fulfilment of its commitment to eliminate the backlog of pending matured foreign exchange in Deposit Money Banks (DMBs), the Central Bank of Nigeria (CBN) has recently disbursed approximately US $61.64 million to foreign airlines through various banks.

• This initiative is part of the CBN’s efforts to decrease its remaining liability to the airlines.

• This underscores the CBN’s commitment to resolving pending obligations and creating a functional foreign exchange market.

• It is anticipated that this initiative would provide a considerable boost to the Naira against other major world currencies and further increase investor confidence in the Nigerian economy.

In 2022, it was reported that foreign airlines struggled to repatriate their revenues since July 2022, when the total amount hit $464 million.

To recover the funds, Emirates Airlines had to suspend all flight operations to Nigeria in November 2022.

Also, British Airways (BA) shut down its inventory to Nigeria in the global distribution system (GDS) — an act that prevented local travel agencies from making bookings from their portals.

Following several meetings by the authorities to address the impasse, the CBN released $265 million to foreign airlines operating in the country to settle outstanding ticket sales.

The International Air Transport Association (IATA), a foreign airline revenue source, also reported that it was blocked from repatriation by the Nigerian government and increased to $743 million from $662 million in January 2023.

IATA said the figure increased to $2.27 billion in April 2023, adding that Nigeria now has the highest unrepatriated airline funds worldwide.

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It was reported that with $2.27 billion in trapped airline funds, Nigeria owes $812.2 million, making it the country with the highest trapped funds globally.

The IATA also said that the rapidly rising levels of trapped funds threaten airline connectivity in the affected markets.

According to the IATA, airline trapped funds have risen by 47% to $2.27 billion in April 2023 from $1.55 billion in April 2022.

The IATA added that five countries accounted for 68.0% of blocked funds, with Nigeria taking the lead as the country with the most trapped funds globally.