CBN and Foreign Airlines Disagree on $700 Million Stuck Funds

The unpaid ticket revenue issue in Nigeria has led to a disagreement between the Central Bank of Nigeria (CBN) and foreign airlines operating in the country.
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On Tuesday, the CBN declared that it had completed the payment of all verified claims by foreign airlines, disbursing an additional $64.44 million to the concerned airlines. This payment brought the total verified amount paid to the air transport sector to $136.73 million, and the CBN asserted that "all the verified airline claims had now been cleared."

According to a statement issued by Mrs. Hakama Sidi Ali, the CBN Acting Director of Corporate Communications, titled "FX Backlog: CBN Concludes Payment of All Verified Claims By Airlines," the apex bank fulfilled its commitment to clear the backlog of foreign exchange owed to foreign airlines in the country.

The statement highlighted the dedication of CBN Governor Olayemi Cardoso and his team to ensuring the clearance of verified backlog payments across all sectors, aiming to restore confidence in the Nigerian foreign exchange market.

Sidi Ali reassured Nigerians that the CBN was collaborating with stakeholders to enhance liquidity in the forex market, alleviating pressure on the naira.

However, the International Air Transport Association (IATA) responded promptly, commending the CBN for the recent payment but emphasizing that over $700 million remained trapped in the country.

While describing the $64.44m disbursement as a welcome development, IATA maintained that approximately $700m was still unpaid.

In a statement, the Geneva-Switzerland-based body representing global airlines, said, “IATA welcomes the Central Bank of Nigeria’s announcement this afternoon that it has released an additional $64.44m in blocked airline funds. While this development is encouraging it’s crucial to recognize that approximately $700m remains blocked with Nigeria’s commercial banks.

“As such there’s a considerable journey ahead in fully addressing the issue. This is exacerbated by the devaluation of the Nigerian Naira, which has dropped significantly against the dollar. Airlines should not be unfairly penalised by the lower exchange rate.

“We will continue to monitor the situation closely and work with the government to ensure that the environment remains conducive to ensuring Nigeria’s connectivity to international markets.”

The naira has continued to fall against the United States dollar with the local unit falling to an all-time low on Monday.

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