Nigeria witnessed a substantial repatriation of N795.48 billion by foreign airlines within the first half of the year in 2023, as per data released by the Central Bank of Nigeria.
Data compiled by the apex bank’s Balance of Payment reveals that airlines debited $1.76 billion (converted at N451/$) during the first and second quarters of 2023.
The Balance of Payment account received a total credit of $19.39 million (N8.75 billion) from airline travel.
Breaking down the debit side of the balance, expenditures on tickets by passengers amounted to N779.61 billion, cargo accounted for $10.22 billion, and other expenses totaled N5.65 billion.
The Chairman of the Association of Foreign Airlines and Representatives, Mr. Kingsley Nweokoma, expressed concerns during a forum with the Minister of Aviation and Aerospace Development, Festus Keyamo, revealing that approximately 90% of the $783 million trapped funds remain unpaid.
Despite this, foreign airlines have consistently faced challenges in repatriating their funds, with $790 million in ticket revenue still trapped in Nigeria as of December 2023, according to the International Air Transport Association.
In addressing the issue, the Central Bank of Nigeria has made efforts to clear part of its outstanding foreign exchange obligations, allocating $2 billion to settle outstanding forex forwards contracts, with $61.64 million specifically directed towards foreign airlines.
The CBN’s Acting Director of Corporate Communications, Hakama Sidi Alia, highlighted these payments as part of ongoing efforts to alleviate pressure on the country’s exchange rate, expressing optimism that it would boost the Naira against major world currencies and enhance investor confidence in the Nigerian economy.
However, the President of the National Association of Nigerian Travel Agencies, Susan Akporiaye, emphasized that the old debts are being settled at prevailing rates during the sales period, indicating a reduction from the original debt of over $800 million.
This issue played a role in Emirates discontinuing flights to Nigeria.
Experts have linked these trapped funds to the high cost of Nigerian routes, illustrating the intricate connection between financial transactions and the pricing dynamics of the aviation sector.
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