Home Economy $700m Remains Blocked Despite CBN’s Release Of $136.73m, Says IATA

$700m Remains Blocked Despite CBN’s Release Of $136.73m, Says IATA

by News Desk
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The International Air Transport Association (IATA) is in consultation with foreign member airlines operating in Nigeria to verify the release of $136.73 million by the Central Bank of Nigeria (CBN), stating that approximately $700m remains blocked.

Foreign airlines have been experiencing difficulties in repatriating their funds from Nigeria, leading some to cease operations in the country. This situation has adversely impacted their operations and has contributed to increased airfares, with some airlines beginning to charge in dollars for tickets.

On March 14, 2023, IATA reported that the amount of foreign airlines’ revenue blocked from repatriation by the Nigerian government had risen to $743 million from $662 million in January 2023.

On January 30, 2024, the Central Bank of Nigeria (CBN) announced the release of an additional $64.44 million to foreign aviation firms, claiming this marked the conclusion of “payment of all verified foreign exchange (FX) claims by airlines.” This move potentially signifies an end to a dispute that started in June 2022, when IATA first raised concerns over its members’ $450 million in blocked funds.

Previously, on January 7, 2024, the CBN had disbursed $61.64 million to foreign airlines through various commercial banks, following an earlier release of $265 million on August 26, 2022, to settle outstanding ticket sales.

Despite the recent disbursement, Hakama Sidi-Ali, CBN’s Acting Director of Corporate Communications, stated that the latest amount paid to the airlines brought the “total verified sum disbursed to the sector to $136.73 million,” adding that all the verified airline claims have now been cleared.

In response, IATA, in a Tuesday statement titled: IATA Response to CBN Announcement on Clearing the Backlog of Foreign Airlines’ Blocked Funds, acknowledged the CBN’s announcement but noted that about $700 million remains trapped in the country.

The statement read, “The International Air Transport Association (IATA) welcomes the Central Bank of Nigeria’s announcement this afternoon that it has released an additional $64.44 million in blocked airline funds. We are consulting with our airline members to verify the release of their revenues.

“While this development is encouraging it’s crucial to recognize that approximately $700 million 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 US 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.“

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