FX backlog: 90% of our trapped funds unpaid, say foreign airlines

Foreign airlines, under the aegis of the International Airline Operators, say about 90 percent of their $783 million unrepatriated funds have not been paid.

Chima Kingsley, the chairman of International Airline Operators, disclosed this during recent a stakeholders’ forum convened by Festus Keyamo, minister of aviation and aerospace development, in Lagos.

The International Air Transport Association (IATA), had said foreign airlines’ blocked revenue was $783 million as at August 2023.

The federal government had promised to pay off international airlines whose funds are trapped in the country.

Fulfilling that pledge, the Central Bank of Nigeria (CBN) on November 1, started clearing its foreign exchange (FX) forwards backlog estimated at $7 billion to improve liquidity in the country’s FX market.

But despite the federal government’s efforts, the airlines said a large percentage of the unrepatriated monies are still inaccessible.

Kingsley said while international banks had received some funds from the CBN, that only accounted for a fraction — less than 10 percent of the trapped funds.

“The bulk of the blocked funds are with Nigerian commercial banks. The bulk of the money has not been paid,” he said.

Meanwhile, domestic carriers, represented by Obiora Okonkwo, chairman of United Nigeria Airlines, also highlighted their struggles with operations amid limited access to forex.

Okonkwo said aircraft maintenance fees are accumulating due to the inability to source FX for payments.