Bowing to international pressure, the Central Bank of Nigeria released 265 million dollars to foreign airlines to settle outstanding ticket sales, the monetary authority confirmed in a resolution issued on Friday.
Many carriers operating in the African nation had previously expressed concern that large sums were being held up in the country due to the inability to access repatriation funds. This is a relatively common situation in some African and Latin American countries, which occurs when some of the funds from sales are blocked by local administrations on the grounds that they will be released when local economic conditions improve.
Nigeria, the continent’s most populous country and an emerging market, earns 90% of its foreign exchange from the exploitation of oil, its main natural resource. In recent times it has had to contend with widespread pipeline theft, a circumstance that has reduced exports by almost half a million barrels a day.
In this context, the national administration restricted the outflow of foreign exchange. According to the International Air Transport Association (IATA), Nigeria prevented foreign airlines from repatriating some 464 million dollars in revenues in July.
The institution’s Vice President for Africa and the Middle East, Kamil Alawadhi, had said at the IATA’s annual meeting that resolving the problem was «a key priority».
Last week, Nigeria’s Minister of Information and Culture, Lai Mohammed, had commented that the government was seeking the best solution to the problem of stranded funds during a visit to the new terminal at Murtala Muhammed International Airport in Lagos. «I can tell you that the relevant authorities are working hard on that issue», he said.
Airlines response
International airlines responded with across-the-board price hikes, causing Nigerian customers to see their costs rise considerably.
The situation was exacerbated when Emirates confirmed the suspension of its operations in the country. The company informed its customers that, despite having made every attempt to address the problems of repatriating funds and trying to initiate dialogue with the authorities involved, it had made no progress.
Local media reported that British Airways, which was the first foreign airline to operate in the country and has maintained uninterrupted services between the United Kingdom and Nigeria -a former British colony- for 85 years, had informed travel agents that it would suspend ticket sales. However, the company said it would maintain its services even though its business was being affected.
Following the release of funds, the Central Bank of Nigeria is still holding some 199 million dollars belonging to foreign airlines in its coffers. Kamil Alawadhi said they would continue to work with the government to «expediting the release of the remaining amount so that airlines can continue providing the connectivity Nigeria requires without disrupting and harming its economy and jobs».
