Foreign Airlines Say CBN Lied About Clearing FX Backlog

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Foreign airlines operating in Nigeria have said the Central Bank of Nigeria (CBN) was inaccurate in claiming it had cleared all foreign exchange (FX) obligations.

Kingsley Nwokeoma, the Association of Foreign Airlines and Representatives in Nigeria (AFARN) president, told BusinessDay that the bank was yet to clear foreign airlines’ trapped funds.

This came 24 hours after Hakama Ali, acting director of CBN’s corporate communications, issued a statement saying the bank made $1.5 billion payments to settle a residual FX backlog balance.

On Thursday, Nwokeoma said, “If they say they have cleared the trapped funds, they should show us figures. They should tell us how much has been cleared. The last I checked, the status quo still remained the same.”

His position may stem from the CBN’s decision to pay the foreign airlines using the current Investors and Exporters Window (I&E Window), which is less than the rate the airlines sold flight tickets for. Bankole Bernard thinks so.

Bernard is the chairman of the Airlines and Passengers’ Joint Committee (APJC) of the International Air Transport Association (IATA). The newspaper credited him with saying the foreign airlines would make losses if they accepted the CBN’s proposed payment plan.

In 2023, Nigeria was the country with the highest IATA trapped funds globally. The country owed the association $812.2 million, while other countries owed a combined $1.458 billion. No country in the world owed up to 40 percent of Nigeria’s debt, with Bangladesh coming a distant second with $214.4 million in debt.

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