Foreign Airlines Still Awaiting Payment for Over 90% of $700 Million in Trapped Funds

This revelation comes as domestic carriers also commend the CBN’s initiative, noting that they too have funds trapped within the CBN

While stakeholders in the business sector express relief over the recent intervention of the Central Bank of Nigeria (CBN) in the foreign exchange market, foreign airlines operating in Nigeria have revealed that they are yet to receive payment for approximately 90 percent of their trapped funds.

This revelation comes as domestic carriers also commend the CBN’s initiative, noting that they too have funds trapped within the CBN

The discussion took place in Lagos during a stakeholders’ forum organized by Mr. Festus Keyamo, the Minister of Aviation and Aerospace Development.

The CBN’s intervention involved clearing the backlog of foreign exchange to commercial banks to alleviate pressure on the foreign exchange market. As a result, the naira has appreciated by over 20 percent since last week in the parallel market

One significant component of the backlog was the trapped funds belonging to foreign airlines operating in Nigeria, totaling over $700 million, as reported by the International Air Transport Association (IATA)

However, Mr. Chima Kingsley, Chairman of International Airline Operators, stated during the stakeholders’ forum, “As of Thursday, the international banks have received dollars from the CBN. But this accounts for less than 10 percent of the trapped funds. Most of the blocked funds remain with Nigerian commercial banks, and the bulk of the money has not been paid.”

From the perspective of the Airline Operators of Nigeria (AON), Prof. Obiora Okonkwo, Chairman of United Nigeria Airlines, emphasized that domestic carriers also require a sufficient supply of foreign exchange to operate, as their funds are also trapped in the CBN. He disclosed, “We are buying forex like smugglers. We are pleased with the news that the government is clearing the backlog. We also have trapped funds. For instance, my airline has $3 million trapped in CBN.”

Okonkwo added that a Nigerian carrier has one of its aircraft parked in a maintenance, repair, and overhaul (MRO) facility abroad, incurring over $3 million in parking fees alone due to the inability to source foreign exchange for payment

The Minister, Mr. Festus Keyamo, assured both foreign and domestic airlines that efforts are ongoing to address the forex challenge, stating, “The process of clearing the money has started. The President gave a marching order to the CBN.”

Dr. Samson Fatokun, Area Manager for West and Central Africa at IATA, also emphasized the need to reduce operating costs in the Nigerian aviation sector, calling for specific sector-focused support to achieve this goa

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