You have not fully cleared the backlog, IATA responds to CBN on foreign airlines’ blocked funds

The International Air Transport Association (IATA) has reacted to the statement by the Central Bank of Nigeria (CBN) that it has fully cleared the backlog of blocked funds owed the international airlines.

The CBN had in a statement on Tuesday, January 30, 2024, announced that it had fully released the backlog of the airlines’ multi-million dollar funds for which the international airlines had threatened to suspend their operations in Nigeria.

“The Central Bank of Nigeria (CBN), fulfilling its pledge to clear the backlog of foreign exchange owed foreign airlines in the country, has concluded the payment of all verified claims by airlines with an additional $64.44 million to the concerned airlines.

“Confirming the figures on Tuesday, January 30, 2024, the Acting Director of Corporate Communications at the CBN, Mrs. Hakama Sidi Ali, noted that the latest amount paid to the airlines brought the total verified amount paid to that sector to $136.73 million.

“She added that all the verified airline claims had now been cleared”, the apex bank said in the statement entitled FX Backlog: CBN Concludes Payment of All Verified Claims By Airlines’.

However, in a statement by IATA on Tuesday evening, the international air service advocacy body said, the airlines’ backlog of trapped funds are yet to be fully paid.

While it appreciated the CBN efforts in clearing the long standing obligations, the IATA drew attention to over $700 million of the funds with the bank, in addition to the difference arising from the devaluation of the naira which it said should not be passed to the airlines.

The statement reads:

“The International Air Transport Association (IATA) welcomes the Central Bank of Nigeria’s announcement this afternoon that it has released an additional $64.44 million in blocked airline funds. We are consulting with our airline members to verify the release of their revenues.

“While this development is encouraging it’s crucial to recognize that approximately $700 million remains blocked with Nigeria’s commercial banks. As such there’s a considerable journey ahead in fully addressing the issue.

“This is exacerbated by the devaluation of the Nigerian Naira, which has dropped significantly against the US Dollar. Airlines should not be unfairly penalized by the lower exchange rate.

“We will continue to monitor the situation closely and work with the government to ensure that the environment remains conducive to ensuring Nigeria’s connectivity to international markets.”