CBN concludes payment of all verified FX claims by foreign airlines

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The Central Bank of Nigeria (CBN) has said it had concluded the payment of all verified foreign exchange (FX) claims by airlines with an additional $64.44 million to the concerned foreign aviation firms.

Hakama Sidi-Ali, CBN’s acting director of corporate communications, disclosed this on Tuesday.

Sidi-Ali said the latest amount paid to the airlines brought the total verified sum disbursed to the sector to $136.73 million, stressing that all the verified airline claims have now been cleared.

According to Sidi-Ali, Olayemi Cardoso, the CBN governor, and his team are committed and would stop at nothing to ensure that the verified backlog of payments across all other sectors are cleared and confidence restored in the Nigerian FX market.

She also assured that the CBN is working with stakeholders to ensure liquidity improves within the forex market, thereby reducing pressure on the naira — Nigeria’s local currency.

While expressing optimism that the market would respond positively with the latest injection of over $64 million, she admonished actors in the FX market to guard against speculation as such actions could hurt the naira.

Siri-Ali, therefore, urged the public to support the reforms in the FX market, adding that the CBN would continue to promote orderliness and professional conduct by all participants in the to ensure market forces determine exchange rates.

The latest update comes a day after the CBN released $500 million to various sectors to address the backlog of FX transactions on January 29, 2024.

Prior, the regulator, on January 7, 2024, disbursed $61.64 million to foreign airlines through various commercial banks.

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

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 had the highest amount of unrepatriated airlines’ funds worldwide.

The situation has led to disputes between the federal government and international airlines who have since blacklisted Nigeria in various ways.

After several engagements with the authorities, the CBN released the sum of $265 million to foreign airlines operating in the country to settle outstanding ticket sales on August 26, 2022.

But that was insufficient to address the impasse, forcing aviation companies like Emirates Airlines to suspend flight operations to Nigeria in November 2022.

British Airways (BA) also closed its inventory to Nigeria in the global distribution system (GDS) — preventing local travel agencies from making bookings from their portals.