Trapped funds: CBN releases $265 million to foreign airlines and others

Trapped funds: CBN releases $265 million to foreign airlines and others

Nigeria’s apex bank, the Central Bank of Nigeria recently released the sum of $265 million with a portion of it going to settle trapped funds belonging to foreign airlines.

$230 million of the intervention fund, reports say, is to tackle FX intervention while another sum of $35 million was released through Retail SMIS auction to clear outstanding ticket sales.

The CBN Governor, Godwin Emefiele and his team are said to be concerned about the trapped funds and the implications for the industry and the economy at large,

Back story

  • International airlines have as much as $464 million trapped in Nigeria. The International Air Transportation Association (IATA) had revealed that the revenue belonging to foreign airlines in Nigeria that is being withheld from repatriation as of July 2022 is the sum of $464 million
  • This development caused Emirates Airlines to announce the suspension of flights to Nigeria from September 1, with several others including British Airways reported to be warming up for the same action.

CBN’s position

The CBN confirmed the release of the funds which is hoped will bring a huge relief to some airlines which had earlier threatened to shut down operations as they could not repatriate the funds due to foreign exchange scarcity problems.

“Yes, that’s the position,” said Osita Nwansiobi, Director of Corporate Affairs of the central bank when contacted for comments on the development.

“There is no press statement, I had a talk with one or two journalists,” he added.

Background

  • Recall that government through the Minister of Culture, Alhaji Lai Mohammed had said that foreign airlines whose funds were trapped in the country will be paid their earnings amounting to $464 million.
  • The Minister had given the assurance recently, during a media tour of the newly commissioned Terminal 2 of the Murtala Muhammed International Airport (MMIA), Lagos.
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