Following the backlash that greeted the news of trapped fund belonging to foreign airlines in Nigeria, the Central Bank of Nigeria (CBN) has released the sum of $265 million to address the situation.
The Director, Corporate Communications Department at the CBN, Mr. Osita Nwanisobi, while confirming the release of the fund, said the CBN Governor, Godwin Emefiele, and his team were concerned about the development and what it portends for the aviation sector and travelers as well as the country in the comity of nations.
According to the financial regulator, $230 million of the intervention fund is mapped out to tackle FX shortage while another sum of $35 million was released through Retail SMIS auction to clear outstanding ticket sales.
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Central Bank of Nigeria releases $265 million to airlines to settle outstanding ticket sales. A breakdown of the figure indicates that the sum of $230 million was released as special FX intervention while another sum of $35 million was released through Retail SMIS auction. #CBN pic.twitter.com/DUcpfPjqOJ
— Central Bank of Nigeria (@cenbank) August 26, 2022
In June, the International Air Transport Association (IATA), raised alarm that over $450 million belonging to foreign airline companies is being trapped in Nigeria. IATA’s Vice President for Africa and the Middle East, Kamal Al Awadhi, had described talks with Nigerian officials to release the funds as a “hectic ride”.
The development, which forced Emirates Airlines to announce suspension of its flight operation to Nigeria, becomes more worrisome as the British Airways announced some adjustments in its operation to Nigeria. The British Airways issued a notice of imminent hike in fares following Emirates’ announcement that it shutting its wings on Nigeria.
“Good afternoon. Please be informed that information reaching us from BA indicates that the airline is changing to full fares F, J, W and Y any moment from now. Kindly let (us) issue any pending tickets to avoid fare increase,” a notice from the British Airways said.
The situation has drawn wide condemnation as it portrays Nigeria in bad light, putting the CBN and the Aviation Ministry on the spot. The Nigerian aviation industry, which has been struggling to stay afloat, is expected to take further hit as more airlines are likely going to shun Nigeria if the situation is not swiftly addressed.
Nwanisobi said that the central bank was not against any company repatriating its funds from Nigeria. He said the apex bank is only concerned about an orderly exit for those who want to repatriate fund.
However, while the released fund may calm the outrage the situation has generated, it doesn’t solve the entire problem. The CBN didn’t provide further details on how it intends to handle the rest of the trapped fund.
There is concern that with this released fund, the authorities may halt their efforts to repatriate the remaining fund, which may lead to another episode of embarrassment to Nigeria.