Foreign Airlines Decline CBN’s Proposal for FX Repayment, Demand Payment at Emefiele’s Exchange Rate

Foreign airlines operating in Nigeria have expressed their reluctance to utilize the investors and exporters (I&E) window for foreign exchange (FX) transactions. The Association of Foreign Airlines and Representatives in Nigeria (AFARN) stated that they do not support this approach due to concerns about fluctuating exchange rates.

Kingsley Nwokoma, president of AFARN, emphasized that foreign airlines prefer to adhere to bilateral air services agreements (BASAs) rather than relying on the I&E window for FX transactions. This stance reflects their dissatisfaction with the current system and their preference for a more stable and predictable exchange rate environment.

The issue of outstanding foreign exchange obligations has been a point of contention between foreign airlines and the Central Bank of Nigeria (CBN). While the CBN claims to have successfully settled all outstanding FX obligations, Nwokoma stressed the importance of transparency and called for detailed information on the payments made, especially to foreign airlines.

Nwokoma also highlighted the need for greater cooperation between the government and foreign airlines to address challenges in FX transactions and ensure smoother operations. He emphasized the importance of honouring BASA agreements and implementing payment plans to avoid accumulating significant debts.

The issue of unrepatriated funds has been a source of concern for foreign airlines operating in Nigeria, leading to threats of strike action by AFARN. Despite assurances from government officials, including the Minister of Aviation and Aerospace Development, Festus Keyamo, foreign airlines are seeking concrete measures to address this issue and facilitate the repatriation of funds.

The International Air Transport Association (IATA) has also been monitoring the situation and consulting with foreign member airlines to verify the release of funds by the CBN. However, concerns remain, with a significant amount of funds still reportedly blocked.

In summary, the reluctance of foreign airlines to use the I&E window for FX transactions underscores broader challenges in Nigeria’s aviation sector regarding currency exchange and repatriation of funds. Addressing these issues will require collaboration between government authorities and foreign airlines to ensure a more conducive operating environment.