Foreign Airlines Receive $61.64m as CBN Clears $2bn Forex Debt Backlog

The Central Bank of Nigeria (CBN) has disbursed $2 billion to Deposit Money Banks to clear its backlog of matured foreign exchange obligations to Deposit Money Banks.

Reports indicate that the CBN’s forward contract obligations to banks amounted to $7 billion and the delayed payment has been a key factor contributing to the recent fluctuations in the forex market.

Also, the CBN’s payment initiative includes $61.64 million allocated to foreign airlines to address pending matured foreign exchange owed to them.

It is noteworthy that the CBN has reportedly owed foreign airlines over $700 million, contributing to a significant backlog issue in Nigeria’s aviation sector.

Hakama Sidi Alia, the Acting Director of Corporate Communications at the CBN, emphasized the central bank’s commitment to resolving pending obligations and ensuring the functionality of the foreign exchange market.

Alia stated, “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.”

Foreign airlines operating in Nigeria have been grappling with challenges related to repatriating their ticket sales in foreign exchange.

The accumulated debt had led to substantial backlogs, prompting concerns from the International Air Transport Association (IATA).

IATA had warned that some foreign airlines might exit the Nigerian market if the debt issue was not promptly addressed.

Reacting to the recent development, Susan Akporiaye, President of the National Association of Nigerian Travel Agencies, highlighted that the $61.64 million payment to foreign airlines is part of the accumulated debts.

She explained that these old debts are being settled at prevailing rates during the ticket sales period, and the government is committed to addressing outstanding debts.

The payment signifies a positive step toward resolving longstanding issues and maintaining a conducive environment for foreign airlines in Nigeria.