Nigeria Settles $61.64m of $790m Trapped Foreign Airlines’ Funds

By Adedapo Adesanya

The Central Bank of Nigeria (CBN) has announced the disbursement of $61.64 million to foreign airlines through various Deposit Money Banks (DMBs) as part of continued efforts to clear foreign exchange backlogs trapped in the country.

This disbursement was disclosed by the CBN’s Acting Director of Corporate Communications, Mrs Hakama Sidi-Ali, in Abuja on Sunday.

She said the move aligned with the central bank’s commitment to clearing the backlog of pending matured foreign exchange in DMBs.

Additionally, Mrs Sidi-Ali mentioned that in the last three months, the CBN has successfully redeemed outstanding forward liabilities amounting to nearly $2 billion.

She said, “This underscores the CBN’s commitment to the resolution of pending obligations and a functional foreign exchange market.

“These payments signify CBN’s ongoing efforts to settle all remaining valid forward transactions, to alleviate the current pressure on the country’s exchange rate.

“It is anticipated that this initiative would provide a considerable boost to the Naira against other major world currencies and further increase investor confidence in the Nigerian economy.”

In December, the International Air Transport Association (IATA) said the total amount of international airlines’ funds trapped in Nigeria was now $790 million compared to a high of $812.2 million earlier reported in June 2022.

In July, the CBN and the National Bank of Ethiopia (NBE), swapped $100 million in blocked funds as both countries struggled with severe shortages of hard currency.

The currency deal involved swapping revenues of Ethiopian Airlines from Nigeria and earnings of Dangote Cement in Ethiopia, as the two companies struggled to repatriate profits amid forex shortages in both countries.

The arrangement was touted as a novel means for Ethiopia to access funds blocked in Nigerian banks, while Nigeria will, in return, gain access to money held up in Ethiopia.

The IATA had over recent months raised alarms over the amount owed by several countries, they also threatened to pull their services out of the country if nothing was done about the huge backlogs.