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Business News of Tuesday, 21 June 2022

Source: www.legit.ng

Foreign airlines may boycott Nigeria as CBN withholds N186.7bn from them

CBN Governor, Godwin Emefiele CBN Governor, Godwin Emefiele

The International Air Transport Association (IATA) says Nigeria is withholding $450 million about N186.750 billion belonging to the airlines.

In the statement, IATA said as of May 2022, withheld funds by Nigeria increased by 12.5 percent month on month. This amount is representative of the total amount of foreign airlines’ revenues that cannot be taken by the airlines.

$1 billion owed IATA globally

According to a Reuters report, IATA claims that the airlines are being owed about $1 billion in global revenue held by countries, showing that only Nigeria accounts for 45 percent of the total share.

Other countries in Africa are Algeria, Ethiopia, and Zimbabwe all accounting for a combined $271 million owed to foreign airlines.

IATA stated that the Central Bank of Nigeria stopped the repatriation of the funds so the foreign currency would be used for imports of essential goods and services and also for investors looking to move their funds.

Negotiation with CBN hectic

An official of IATA, Kamal Al Awadhi said that the negotiations with the CBN are hectic which suggests that the apex bank is frustrating and cannot get the bank to release the funds.

Al Awadhi voiced fears that the situation could destroy Nigeria’s aviation sector as airlines may seek other alternatives to protect income.

The IATA official said that CBN officials are not responsive to and averse to releasing the funds or even a part of them.

Airlines flying from Nigeria to other countries charge higher fares compared to when booked abroad.

There is a currency crisis in Nigeria as the disparity of the exchange rate has increased to N180 and it has forced companies with foreign exchange inflows to horde their money abroad, risking forfeiture if they declare the locally which will make them sell at the official exchange rate.