Foreign airlines returned N795.48 billion from Nigeria during the course of six months, according to Central Bank of Nigeria data.
According to the apex bank’s Balance of Payment compilation, airlines withdrew (as debits) $1.76 billion (converted to naira at N451/$) in the first and second quarters of 2023. The total credit to the Balance of Payments account for airline travel was $19.39 million (N8.75 billion).
The debit side of the balance of payments comprises the amount spent on passenger tickets (N779.61 billion), freight ($10.22 billion), and other expenses (N5.65 billion).
A Balance of Payments is “defined as a systematic record of economic and financial transactions for a given period between residents of an economy and non-residents,” per an explanation note named Note D on the website of the top bank.
Despite this, international airlines have repeatedly complained about their inability to repatriate all of their funds. As of November 2023, several airlines stated that approximately 90% of their $783 million stuck cash had not been reimbursed.
Mr Kingsley Nweokoma, Chairman of the Association of Foreign Airlines and Representatives, made this statement during a stakeholders’ roundtable with Festus Keyamo, Minister of Aviation and Aerospace Development.
In December 2023, the International Air Transport Association disclosed that $790m ticket revenue is currently trapped in the country. According to the IATA Regional Vice President, Africa & Middle East, Kamil Alawadhi, Nigeria has the highest number of airlines’ blocked funds at $792m followed by Egypt ($348m); Algeria ($199m); AFI zone ($183m) and Ethiopia $128m.
These blocked funds form part of the estimated $7bn outstanding foreign exchange obligations of the Central Bank of Nigeria on forex forwards contracts owed to commercial banks. In January 2024, the apex bank announced that it has paid $2bn to clear part of this backlog. $61.64m of this amount went to foreign airlines.
In a statement, the CBN Acting Director of Corporate Communications, Hakama Sidi Alia, said, “These payments signify the CBN’s ongoing efforts to settle all remaining valid forward transactions, to alleviate the current pressure on the country’s exchange rate.
