Jan. 31, 2024

Nigeria’s central bank said it had cleared the entire backlog of verified claims owed to foreign airlines whose payments had been blocked in the country, but airline association IATA said another $700 million of owed money remained in Nigerian banks.

Dollar shortages have since 2016 made it hard for some foreign airlines that sold tickets in the naira to get their money out of Nigeria, with IATA saying last year some $743 million in revenue earned by international carriers there was still blocked.

Central Bank of Nigeria spokesperson Hakama Sidi Ali said on Tuesday that all verified claims by airlines had been cleared after the bank released an additional $64.4 million of foreign exchange owed to them, bringing total payments to $136.7 million.

The International Air Transport Association (IATA) said late on Tuesday however that while it welcomed the CBN’s announcement of the release of blocked airline funds, there was “a considerable journey ahead in fully addressing the issue”.

“While this development is encouraging, it’s crucial to recognize that approximately $700 million remains blocked with Nigeria’s commercial banks,” the world’s largest airline association said in a statement.

Commercial banks have to source dollars from the central bank to repatriate airline funds due to a broad shortage of foreign currency in Nigeria.

IATA added that the trapped revenue issue has been made worse by the devaluation of the Nigerian currency, which has lost more than 40% of its value against the U.S. dollar this month after shedding a third of its value last year.

Nigerian officials have in the past blamed foreign currency shortages for not repatriating the airline revenues.
IATA said airlines should not be unfairly penalized 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.”

REUTERS