FX backlog: CBN disburses $61m to foreign airlines

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The Central Bank of Nigeria (CBN) says $61.64 million has been paid to foreign airlines through various deposit money banks (DMBs).

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

Ali said in the past three months, the CBN redeemed outstanding forward liabilities of almost $2 billion.

She said the disbursement was in fulfilment of the regulator’s commitment to eliminate the backlog of pending matured foreign exchange (FX) in banks.

“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,” Ali said.

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

“This underscores the CBN’s commitment to the resolution of pending obligations and 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.”

Foreign airlines have struggled to repatriate their revenues since July 2022 when the total amount hit $464 million.

In attempts to recover the funds, Emirates Airlines suspended flight operations to Nigeria in November 2022.

British Airways (BA) also closed 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 aimed at addressing the impasse, the CBN released the sum of $265 million to foreign airlines operating in the country to settle outstanding ticket sales.

According to the International Air Transport Association (IATA), foreign airlines’ revenue blocked from repatriation by the Nigerian government increased to $743 million from $662 million in January 2023.

IATA, however, said the figure increased to $2.27 billion in April 2023, adding that Nigeria now has the highest amount of unrepatriated airlines’ funds worldwide.