ENUGU, Nigeria (VOICE OF NAIJA)- Data from the Central Bank of Nigeria (CBN), has revealed that foreign airlines withdrew a staggering N795.48bn from Nigeria within the first and second quarters of 2023, as revealed in the apex bank’s Balance of Payment compilation.
The corresponding debits amount to $1.76bn, converted at N451/$. The Balance of Payment account received a total credit of $19.39m (N8.75bn) from airline travel during this period.
Breaking down the debit side of the balance of payments, expenses on tickets by passengers accounted for N779.61bn, while cargo and other services contributed $10.22bn and N5.65bn, respectively.
The Balance of Payments is described on the CBN website as a systematic record of economic and financial transactions between residents and non-residents of an economy.
Despite these transactions, foreign airlines have consistently faced challenges repatriating their funds, with around 90 per cent of their $783m trapped funds remaining unpaid as of November 2023.
The Chairman of the Association of Foreign Airlines and Representatives, Mr. Kingsley Nweokoma, emphasized the significant portion of blocked funds residing in Nigerian commercial banks.
READ ALSO: E-Naira Surges 284% To N9.78bn, As Notes, Coins Decline To N2.65tn – CBN Report
He said, “The bulk of the blocked funds are with Nigerian commercial banks. The bulk of the money has not been paid.”
In December 2023, the International Air Transport Association disclosed that $790m of ticket revenue was trapped in the country, with Nigeria leading in the number of airlines’ blocked funds at $792m.
The difficulties in repatriating these funds were highlighted by the IATA Regional Vice President, Africa & Middle East, Kamil Alawadhi, who stressed the importance of engagement between parties.
Part of these blocked funds is included in the estimated $7bn outstanding foreign exchange obligations of the Central Bank of Nigeria on forex forwards contracts owed to commercial banks.
The CBN announced in January 2024 that it paid $2bn to clear part of this backlog, with $61.64m going to foreign airlines.
The CBN Acting Director of Corporate Communications, Hakama Sidi Alia, emphasized that these payments aim to alleviate pressure on the country’s exchange rate and boost investor confidence.
Reacting to these developments, the President of the National Association of Nigerian Travel Agencies, Susan Akporiaye, acknowledged the reduction in the old outstanding debt and its impact on Nigerian routes’ pricing.
He said, “The old debts are being settled at the prevailing rate when tickets are sold, with the exchange rate around N400/450 to one dollar. The debt, which was originally over $800m, has been reduced.
“This specific issue led to Emirates discontinuing flights into Nigeria. The government has committed to paying the old outstanding debt at the rates prevalent during the sales period.”
Experts partially attribute these trapped funds to the elevated cost of Nigerian routes.