Foreign airlines to CBN: We don’t support patronising I&E window for FX

Foreign airlines in Nigeria say they do not support patronising the investors and exporters (I&E) window for foreign exchange (FX) transactions.

The airlines, under the aegis of the Association of Foreign Airlines and Representatives in Nigeria (AFARN), said they do not back the use of the I&E window because of the fluctuations in the rates.

Kingsley Nwokoma, president of AFARN, disclosed this on Thursday while speaking to TheCable.

“The issue is that the foreign airlines do not align with going to the investors and exporters (I&E) window to get their money because of the rates. Moreover, they believe that they have signed a bilateral air services agreement (BASA) that should be agreed upon,” Nwokoma said.

However, on September 28, 2022, Godwin Emefiele, former governor of the Central Bank of Nigeria (CBN), said there is no law mandating the regulator to provide dollars to foreign airlines operating in the country.

Emefiele told the foreign airline operators to inform their banks, where their ticket proceeds are deposited, to buy FX on their behalf from legitimate or approved sources, one of which is the I&E window.

He said the purchase of the dollars by the bank would enable the foreign airlines to exchange their ticket sales proceeds for the FX.

PROVIDE DETAILS OF FX BACKLOG CLEARED FOR FOREIGN AIRLINES

On March 20, CBN said it had successfully settled all outstanding foreign exchange obligations.

Speaking on the cleared backlog, Nwokoma said the CBN should provide details on the payment, especially to foreign airlines.

“The CBN said they have paid the backlog, which is fantastic. This is what the foreign airlines want to hear,” he said.

“But if it is genuinely true they should also back it up with figures to say this is what was paid to foreign airlines. The last time they paid $136 million, so this time they should say XYZ dollars were paid to ensure transparency.”

On the way forward, he called for synergy between the government and the foreign airlines to ensure smooth transitions.

He also said if agreements had been taken seriously, Nigeria would not be named among countries like Lebanon and Afghanistan owing foreign airlines. 

“Moving forward, let there be more cooperation with the airlines and the government by taking the BASA agreement more seriously,” Nwokoma.

“There should be an agreement between the foreign airlines and the federal government to determine when payments can be made, like a payment plan to avoid huge debts.”

In January, AFARN had threatened to go on strike over unrepatriated funds in the country.

The association said Festus Keyamo, minister of aviation and aerospace development, assured the union the unrepatriated funds of about $300 million would be cleared.

Meanwhile, on January 30, the International Air Transport Association (IATA) said it was consulting with foreign member airlines operating in Nigeria to verify the release of $136.73 million as claimed by the CBN, adding that $700 million was still blocked.