The Central Bank of Nigeria (CBN) has released $265 million to foreign airlines operating in the country, a move which was made to settle outstanding trapped funds from ticket sales.
A total of $464 million in trapped funds from airline ticket sales was recorded in July, and with this development, it leaves a balance of $199 million to clear the backlog.
CBN’s Corporate Communications Director, Osita Nwanisobi, claimed in a statement released on Friday that the funds were released in parts and also personally claimed that the apex bank is not against any company repatriating its funds from Nigeria but to ensure an orderly exit for those that might be interested in doing so.
“A breakdown of the figure indicates that the sum of $230 million was released as a special FX intervention while another sum of $35 million was released through Retail SMIS auction,” the statement read.
“With Friday’s release, it is expected that operators and travellers as well will heave a huge sigh of relief, as some airlines had threatened to withdraw their services in the face of unremitted funds for the outstanding sale of tickets,” he added.
This move by the CBN comes after Emirates Airlines announced that it will suspend all its flights in and out of Nigeria by September 1 due to its inability to repatriate $85 million stuck in the country.
The International Air Transport Association (IATA), which has sternly criticised Nigeria’s failure to allow international airlines to repatriate their profits, has warned that the suspension of operations by more airlines is foreseeable in the future if Nigeria fails to release the full $464million in trapped revenue.
“Airlines can’t be expected to fly if they can’t realize revenue from ticket sales. Loss of connectivity harms the economy, hurts investor confidence, and impacts jobs and people’s lives. The Government of Nigeria needs to prioritize the release of funds before more damage is done,” stated IATA in a tweet last Thursday.
This move by CBN has been hailed by aviation stakeholders who claim it saved Nigeria’s image. The move has also spurred huge excitement in the aviation sector as foreign airlines have been reported to have reintroduced lower-class tickets.