Foreign Airlines Challenge CBN’s Claims of Settling Trapped Funds

Foreign airlines and the Central Bank of Nigeria (CBN) are in disagreement regarding the settlement of outstanding foreign exchange (FX) obligations. While the CBN claims to have successfully settled all obligations, foreign airlines assert that the status quo remains unchanged.

The President of the Association of Foreign Airlines and Representatives in Nigeria (AFARN), Kingsley Nwokeoma, stated that as far as he is concerned, nothing has changed regarding the clearing of foreign airlines’ trapped funds. He emphasized the need for the CBN to provide figures and details regarding the amount cleared.

However, Bankole Bernard, chairman of the Airlines and Passengers’ Joint Committee (APJC) of the International Air Transport Association (IATA), supported the CBN’s claim, stating that the airlines’ trapped funds have indeed been cleared. According to him, foreign airlines have been given the option to retrieve their funds from banks using the rate of the Investors and Exporters (I & E) window. However, airlines have refused this option because the current I & E window rate is not favourable compared to the rate they used to sell tickets.

Bernard explained that accepting funds at the current exchange rate would result in losses for the airlines. Consequently, airlines have stopped selling low inventory tickets and are only offering very high fares to recover their lost funds due to the unfavourable exchange rate.

Regarding Emirates’ suspension of flight operations in Nigeria, Bernard attributed it to a diplomatic row between Emirates and Nigeria. He mentioned concerns about crimes committed by Nigerians in Dubai, which has led to restrictions on Nigerian travellers. Despite the suspension of flight operations, Emirates maintains its office in Nigeria and continues to pay salaries to its staff.

Last year, the International Air Transport Association (IATA) disclosed that Nigeria owed $812.2 million out of $2.27 billion in trapped funds, making it the country with the highest amount of trapped funds globally. Other countries with significant amounts of trapped funds include Bangladesh, Algeria, Pakistan, and Lebanon.