N1,490/$: Foreign Airlines Counter CBN's Claim of Concluding Payment of Unpaid Ticket Revenues

• The federal government claimed it concluded the payment of all verified claims after recently clearing $64.44 million forex backlogs to airlines
• Foreign airlines in Nigeria opposed the claim of the federal government on the conclusion of forex payments
• They claimed that approximately $700 million remains blocked with Nigeria's commercial banks

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

Foreign airlines operating in Nigeria have countered the Central Bank of Nigeria's claim over the total unpaid ticket revenue in the country.

This comes after the CBN said on Tuesday that it had concluded the payment of all verified claims by foreign airlines with an additional $64.44 million to the concerned airlines.

According to the CBN, the development had brought the total verified amount paid to the air transport sector to $136.73 million. It added that all the verified airline claims had now been cleared.

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$700 million remains blocked

Meanwhile, in a statement, the International Air Transport Association (IATA) appreciated the CBN for releasing an additional $64.44 million in blocked airline funds.

It, however, emphasized that approximately $700 million remains blocked with Nigeria's commercial banks, according to a Punch report.

It stated:

“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 the environment remains conducive to Nigeria’s connectivity to international markets.”

Regarding the delopment as a welcome one, Samuel Oyekanmi, a macroeconomic analyst said clearing the backlog is a necessary move. He however cited the need to ensure ensure improved liquidity in the market.

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He said,

"What will be great is to ensure improved liquidity in the official market, bridging the arbitrage caused by the disparity between the official and the parallel market, and nip the impact of FX shocks on prices in the bud."

The naira continues to fall

Meanwhile, the CBN recently cleared over $2.5 billion in overdue foreign exchange debts in the last three months.

Despite this, the naira continues to fall, reaching its lowest.

Legit.ng reported that the Nigerian currency closed at N1,348 per $1 at the official window, marking a N456.73 or 51.1% depreciation by Monday

On the parallel market, a similar trend was followed. A 2.76% depreciation led the market to close at N1,450/$1.

The naira, however, extends its loss on Tuesday to record N1,490/$ in the official market, according to a Premium Times report.

IATA confirms foreign airlines could leave Nigeria soon

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Legit.ng reported that IATA had highlighted that international airlines faced challenges over trapped ticket revenues in Nigeria and other countries.

It stated that if the situation is not quickly resolved, it could lead to foreign airlines exiting the country.

Kamil Alawadhi, IATA's regional vice president for Africa and the Middle East, said this in an interview.

Source: Legit.ng