Recently, the CBN intervened in what could have translated into a major issue in Nigeria’s aviation sector with the release of $265 million to airlines to settle outstanding ticket sales.
A lot of comments have since followed the episode, particularly the conclusion by airlines and the public that it is binding for the CBN to supply airlines with dollars for repatriation purposes.
The Central Bank Governor, Godwin Emefiele, at the recently conducted monetary policy committee meeting, clarified that the CBN is not under compulsion to provide dollars for ticket sales proceeds.
The Governor explained that the aviation sector has always been enjoying priority allocation because the country does not want people who want to travel to be constrained. He noted that the CBN decided to release $265 million considering that the naira value of travels ticket issued by the airlines has increased, and was building pressure aggressively.
However, the governor drew attention to the comments of some airlines that the CBN should respect the Bilateral Air Services Agreement (BASA), which says that proceeds of all their ticket sales must be repatriated out of the country. Emefiele noted that BASA did not state that the repatriation should be through the central bank. He said, “there is no law that makes it compulsory that you must buy your dollars from the Central Bank.” Addressing the airlines he further said, “when you put your money in your account and tell your bank to buy you dollars, your bank will go to the legitimate or approved source which in this case is the I&E Window to buy dollars and pay for your ticket sales proceeds. If they don’t find it, they may resort to CBN. But it does not mean that the CBN is under compulsion to provide your dollars.”
Notwithstanding, he stated that the bank will ensure it clears the outstanding ticket sales proceeds. He said, “we will do everything possible and are determined to clear the backlog and will consistently at all the retail interventions, as long as the account of the banks are funded, make the releases to ensure that the cumulative backlog is cleared.”
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Rate Captain previously reported Emirates Airline’s suspension of flight operations to and from Nigeria over its inability to repatriate $85 million in revenue from Nigeria.
At the time, a minimum of $600 million in flight ticket proceeds of over 20 foreign airlines had been blocked in Nigeria since the beginning of the year with British Airways also considering suspension of Nigerian flights.
CBN’s intervention with 265 million dollars significantly eased the pressure in the sector with Dubai’s emirates re-instating flights to the country after receiving part of its trapped fund.
