Emmanuel OchayiThe Central Bank of Nigeria (CBN) has taken a stride in reducing its backlog by repaying $2 billion to Deposit Money Banks, aiming to tackle the escalating volatility in the forex market.
This repayment, aimed at clearing a portion of the $7 billion forward contract obligations to banks, has also benefitted foreign airlines, who received $61.64 million to address overdue foreign exchange obligations.
CBN’s Acting Director of Corporate Communications, Hakama Sidi Alia, emphasized the bank’s commitment to settling outstanding transactions, alleviating pressure on Nigeria’s exchange rate. She remarked: “These payments underscore the CBN’s dedication to resolving pending obligations and stabilizing the foreign exchange market.”
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The forex challenges have affected foreign airlines operating in Nigeria, with accumulated debts exceeding $700 million.
President of the National Association of Nigerian Travel Agencies, Susan Akporiaye, noted that the $61.64 million payment is a part of the accumulated debts owed to these airlines.
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She explained how these debts, initially over $800 million, are being settled based on the prevailing exchange rate during ticket sales, highlighting the impact it had on airlines like Emirates, leading to discontinued flights into Nigeria.
Foreign airlines, grappling with repatriating ticket sales in foreign exchange, have resorted to sourcing forex at the Investors and Exporters (I&E) window amid the ongoing challenges. The International Air Transport Association (IATA) had cautioned that failure to address these debts might compel some foreign airlines to exit the Nigerian market.
The disbursements by the CBN are anticipated to provide a boost to the Naira and enhance investor confidence in Nigeria’s economy, marking a positive step in easing the burden faced by both financial institutions and foreign airlines.
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