Written by SpringnewsNG Media Limited – June 19, 2025

The ongoing crisis in Nigeria’s aviation sector has thrown the spotlight once again on the country’s unstable and chaotic foreign exchange (FX) regime, with industry stakeholders warning that unless urgent reforms are made, Nigeria risks losing critical investments and international partnerships.

In recent months, several foreign airlines operating in Nigeria have either suspended or scaled back operations, citing the Central Bank of Nigeria’s (CBN) inability to clear forex backlogs and allow repatriation of ticket sales. The crisis has triggered a sharp spike in international airfares, increased passenger complaints, and further strained Nigeria’s already battered aviation industry.

Experts say the foreign exchange bottlenecks, driven by an inconsistent exchange rate policy and dollar illiquidity, have exposed the wider economic consequences of Nigeria’s broken FX management system.

Airlines Struggle to Repatriate Funds

According to the International Air Transport Association (IATA), Nigeria owes over $700 million in blocked airline funds, the highest in Africa. This figure represents the amount airlines are unable to repatriate due to forex restrictions and CBN’s backlog of unmet obligations.

A top airline executive who spoke to SpringnewsNG on condition of anonymity said:

“No serious investor or airline will continue to operate in an environment where you can’t access your own funds. This is not just an aviation problem—it’s a reflection of the broader instability in Nigeria’s forex system.”

Policy Flip-Flops and FX Confusion

The CBN’s multiple exchange rate windows and inconsistent monetary policies have further complicated FX availability. Analysts point out that despite the government’s promise to unify the exchange rate, parallel market rates continue to deviate sharply from official rates, discouraging foreign investment and disrupting key sectors like aviation, manufacturing, and pharmaceuticals.

“The aviation crisis is a symptom of Nigeria’s broken forex regime. Until we fix our FX architecture, every sector—especially those dependent on foreign input—will remain vulnerable,” said Dr. Felix Akintola, an economist and aviation policy expert.

Impact on Travelers and the Economy

The crisis has made international travel unaffordable for many Nigerians, with ticket prices for some destinations doubling in the last year. Travel agencies report rising cancellations and frustration among passengers.

Worse still, the ongoing FX crunch is forcing some airlines to demand payment in dollars, further widening inequality and pushing ordinary Nigerians out of international travel access.

Calls for Urgent FX Reform

Stakeholders are now calling on President Bola Ahmed Tinubu’s administration and the CBN to urgently overhaul the FX system, prioritize backlog payments, and create a stable, transparent, and unified exchange rate to restore investor confidence.

Without decisive action, they warn that Nigeria’s aviation sector may collapse, with ripple effects across trade, tourism, and diplomatic relations.