August 26, (THEWILL) – The Central Bank of Nigeria (CBN) has released the sum of $265m to airlines operating in the country, as part of efforts to meet dollar demand by foreign airlines.
A breakdown of the figure indicates that the sum of $230m was released as special forex intervention, while another sum of $35m was released through Retail SMIS auction.
A Senior Commercial Bank official told THEWILL that the apex Bank released the FX to check a brewing crisis in the country’s aviation sector.
Confirming the release, the Director, Corporate Communications Department at the CBN, Osita Nwanisobi, said the Bank is concerned about the development and what it portends for the sector and travellers, as well as the country in the comity of nations.
Nwanisobi, who reiterated that the CBN was not against any company repatriating its funds from the country, said what the Bank stood for was an orderly exit for those that might be interested in doing so.
With Friday’s release, it is expected that operators and travellers as well, will heave huge sighs of relief, as some airlines had threatened to withdraw their services in the face of unremitted funds for outstanding sale of tickets.
International airlines operating in Nigeria have complained of revenues trapped in the country. The airlines including Emirates and BA, said they have been unable to repatriate millions of dollars because of scarcity of forex.
The International Air Transport Association said in June that the trapped funds amounted to $450 million.
Recall that Emirates airlines, last week, announced that it will suspend all flights to Nigeria from September 1.
The airline, which has been battling to repatriate its millions of dollars in revenue from Nigeria, said it took the “difficult decision” in order to limit further losses, citing circumstances “beyond our control.
Emirates announced in July that it has $85 million “awaiting repatriation from Nigeria”, a figure it said was rising by more than $10 million every month.
“Emirates has tried every avenue to address our ongoing challenges in repatriating funds from Nigeria, and have made considerable efforts to initiate dialogue with the relevant authorities for their urgent intervention to help find a viable solution. Regrettably there has been no progress”, the airline said in a statement last week.
All the foreign airlines are in similar predicaments, said Sindy Foster, a Lagos-based aviation expert, who added that the issue of trapped revenues is “a recurring problem” building up since 2016 when several airlines pulled out of Nigeria over a similar issue.
Analysts also expressed worry that Emirates’ planned suspension of flights could scare away investors from Nigeria, whose foreign investments dropped by 81% over the last two years, according to government statistics released earlier this year.
Nigeria, Africa’s largest economy, is facing a crisis caused by a shortage of foreign exchange, despite being one of Africa’s largest exporters of crude oil. Oil production, which is the country’s largest earner of foreign exchange has been far below the government’s projections this year.
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