Travel Agents Call For Review of CBN's Dollar Repatriation Policy, Amid Ongoing Challenges

• After difficulties encountered in repatriating airline funds between 2020 and 2023, the airlines reverted to selling tickets in dollars
• The sale of tickets in dollars has continued, and travel agents now find themselves also unable to remit payments in dollars
• They have called on the CBN to consider reviewing the dollar repatriation policy to protect them from sanctions from IATA

Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.

Travel agents in Nigeria have called on the Central bank of Nigeria to review the dollar repatriation policy as it continues to pose challenges to them in their operations.

They complained that the limit on the daily dollar transactions restricts them from sending all the funds from ticket sales to international airlines.

Back in 2020 during the coronavirus pandemic, the airlines ran into difficulties trying to repatriate their funds due to insufficient FX.

The problem persisted eventually leading to over $744 million backlog of funds to be cleared, and to arrest the situation, the airlines started receiving payments in dollars directly.

They also stopped the travel agents in Nigeria from issuing tickets for sales that originated in other countries in naira.

Even though the federal government has cleared the backlog of funds, the airlines are still receiving ticket payments in dollars to prevent a repeat of the situation where they are unable to repatriate their funds.

Also in 2023, the CBN issued a circular directing commercial banks to limit daily dollar transactions to a maximum of $10,000.

The travel agents now find themselves in a situation of daily default due to their inability to refund all the proceeds of ticket sales to the airlines.

Major airlines insist on dollar sales only

According to the PUNCH, Delta and United Airlines have authorization in their Bilateral Service Agreement to sell tickets to Nigerians in foreign currency, duly signed by the Nigerian government.

After the United Arab Emirates stopped flying into Nigeria in 2022, the federal government in a bid to get the airline back to Nigeria permitted it to sell its tickets in dollars.

With these three major airlines receiving payments in dollars, travel agents struggle to get enough dollars to remit to the IATA daily as ticket payments, and default could lead to their being blacklisted.

The prices of air tickets continue to increase, as demand increases.

Industry stakeholders call on the FG

Susan Akporaiye, former President of the National Association of Nigeria Travel Agencies (NANTA) and CEO of Topaz Travels and Tours, discussed the toll these challenges are taking on businesses.

She questioned why the airlines could not revert back to selling in naira since the airline funds had been repatriated.

"One business class ticket is between 5000 – 10,000 dollars, so if I sell five business class tickets, that is about $100,000 and I can only transfer 10,000 daily so it will take me 10 days to pay $100,000 to the airline.

Bankole Bernard, Group Managing Director of Finchglow Holdings, criticized the federal government for not considering the plight of local travel agents when granting airlines approval to sell tickets in dollars.

He explained that the travel agents could get blacklisted by the IATA if they fail to remit the funds within the provided timeline and urged the federal government to address the matter.

NANTA negotiates with FG to stop dollar sales of tickets

In related development, Yinka Folami the NANTA president said the body had opened up conversations with the government on the matter.

Folami complained that selling air tickets to Nigerians in foreign currency was a breach of Nigeria's sovereignty.

Legit.ng reported that NANTA had raised the issue with the NCAA and received assurance that appropriate action would be taken.

Source: Legit.ng