The Central Bank of Nigeria (CBN) has released $500 million to various sectors of the economy to further address the backlog of verified foreign exchange (FX) transactions.
This is coming barely a fortnight after the apex bank paid approximately $2 billion to settle outstanding commitments across manufacturing, aviation, and petroleum sectors.
The foreign airlines with stranded funds in the country got $62 million of this sum to share among themselves and complained the sum was inadequate.
Some of the airlines threatened to pull out of Nigeria operations. It is not known how much of this latest $500 million tranche will extend to the aviation sector.
On the latest $500 million allocation announced Monday, Mrs. Hakama Sidi Ali, Acting Director of the Corporate Communications Department at the CBN, said the apex bank was committed to settling all legitimate FX backlogs within a short time frame.
Nigeria with a huge $812.2 million debt as at June 2023 maintains the lead among countries owing foreign airlines collectively about $2.3 billion.
In November 2023, Emirates Airlines suspended flight operations to Nigeria over its inability to repatriate its $85 million revenue trapped in the country. The suspension was the second time the airline halted flights to Nigeria over its unrepatriated funds — the first time was in August 2022.
Emirates had previously suspended flights in September 2022 but resumed after the CBN released $265 million in outstanding ticket sales. And barely two months later, the airline halted operations in the country, citing unsuccessful negotiations with Nigerian authorities over fund repatriation.
Etihad Airways also suspended flights to Nigeria in the same period.
Reiterating the assurances of the CBN governor, Mr. Olayemi Cardoso, Sidi Ali said the CBN had begun implementing a comprehensive strategy to improve liquidity in the Nigerian FX markets in the short, medium, and long term.
“As the Governor said, the CBN’s focus is on addressing fundamental issues that have hindered the effective operation of the Nigerian FX markets over the years,” she said.
While noting that the forex market reforms were designed to streamline and unify multiple exchange rates, foster transparency, and reduce arbitrage opportunities, Sidi Ali expressed confidence that a stable exchange rate would boost investor confidence and attract foreign investment.
She, therefore, urged all participants in the market to play by the rules, stressing that transparency in the market would enable the fair determination of exchange rates and, by extension, guarantee stability for businesses and individuals alike.
It will be recalled that the CBN, over the past few months, has released various sums in its effort to clear the backlog of foreign exchange liabilities.
