Foreign airlines have repatriated a total of N795.48 billion ($1.76 billion converted at N451/$) from Nigeria in the first and second quarters of 2023, according to data from the Central Bank of Nigeria’s Balance of Payment compilation. The amount represents debits in the balance of payments, covering expenses such as passenger ticket costs (N779.61 billion), cargo fees ($10.22 billion), and other miscellaneous charges (N5.65 billion).
The Balance of Payments is a systematic record of economic and financial transactions between residents of an economy and non-residents. It includes receipts and payments related to merchandise trade, invisible (service) trade, transfer payments, short-term and long-term capital movements, and the movement of international reserves.
Despite these transactions, foreign airlines have encountered challenges in repatriating all their funds. As of November 2023, approximately 90% of the $783 million trapped funds belonging to these airlines remained unpaid. The Association of Foreign Airlines and Representatives Chairman, Mr. Kingsley Nweokoma, revealed this during a stakeholders’ forum, emphasizing that the majority of the blocked funds are with Nigerian commercial banks.
The International Air Transport Association (IATA) disclosed in December 2023 that $790 million in ticket revenue is trapped in Nigeria, with the country having the highest amount of airlines’ blocked funds. Nigeria is followed by Egypt ($348 million), Algeria ($199 million), AFI zone ($183 million), and Ethiopia ($128 million).
In January 2024, the Central Bank of Nigeria announced progress in addressing outstanding foreign exchange obligations, clearing $2 billion of the $7 billion forex forwards contracts owed to commercial banks. Of this amount, $61.64 million went to foreign airlines. The CBN aims to boost the Naira and enhance investor confidence by settling these obligations.
Susan Akporiaye, President of the National Association of Nigerian Travel Agencies, noted that the old debts are being settled at prevailing rates during ticket sales, which ranged from N400 to N450 to one dollar. This debt reduction has positively impacted the outstanding foreign exchange obligations, contributing to a decrease in route costs.
Experts partly attribute the challenges faced by foreign airlines in repatriating funds to the higher costs of Nigerian routes. The engagement between parties involved, including the CBN governor, is seen as a crucial step in resolving these issues and fostering a positive environment for the aviation sector.
