Nigeria Risks Boycott of Foreign Airlines as CBN Refuses to Release $450 Million Belonging to Them
- There is a possibility of foreign airlines leaving Nigeria as the Central Bank of Nigeria refuses to repatriate funds meant for them
- According to the International Air Transport Association, Nigeria is withholding about $450 million meant for the airlines
- IATA said that negotiations with the Nigerian government is hectic and that the CBN wants to use the funds to settle goods and services
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The International Air Transport Association (IATA) says Nigeria is withholding $450 million about N186.750 billion belonging to the airlines.
In the statement, IATA said as of May 2022, withheld funds by Nigeria increased by 12.5 per cent month on month. This amount is representative of the total amount of foreign airlines’ revenues that cannot be taken by the airlines.
$1 billion owed IATA globally
According to a Reuters report, IATA claims that the airlines are being owed about $1 billion in global revenue held by countries, showing that only Nigeria accounts for 45 per cent of the total share.
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Other countries in Africa are Algeria, Ethiopia, and Zimbabwe all accounting for a combined $271 million owed to foreign airlines.
IATA stated that the Central Bank of Nigeria stopped the repatriation of the funds so the foreign currency would be used for imports of essential goods and services and also for investors looking to move their funds.
Negotiation with CBN hectic
An official of IATA, Kamal Al Awadhi said that the negotiations with the CBN are hectic which suggests that the apex bank is frustrating and cannot get the bank to release the funds.
Al Awadhi voiced fears that the situation could destroy Nigeria’s aviation sector as airlines may seek other alternatives to protect income.
The IATA official said that CBN officials are not responsive to and averse to releasing the funds or even a part of them.
Airlines flying from Nigeria to other countries charge higher fares compared to when booked abroad.
There is a currency crisis in Nigeria as the disparity of the exchange rate has increased to N180 and it has forced companies with foreign exchange inflows to horde their money abroad, risking forfeiture if they declare the locally which will make them sell at the official exchange rate.
Domestic airlines increase flight tickets by 100% days after trading words with NASS on increasing delays
Legit.ng reported that airfares across Nigeria have increased by as much as 100%, a check on airlines website and reports from the Sun Newspaper.
Ticket fares to cities like Port Harcourt, Ilorin, and northern states like Kebbi, Borno, Adamawa and Kano have increased by as much as 100%.
Some Nigerians have also taken to social media to express their pains and call for relief amid the rising cost of living.