Nigeria’s foreign currency shortage has trapped around $700 million in funds for foreign airline operators, according to Vanguard. Despite financial intervention by the Central Bank of Nigeria (CBN), the figure is expected to rise further, having already doubled from £346 million in September.
Strict measures have been implemented by the government to prevent foreign currency from leaving the country. In September, Nigeria’s Civil Aviation Authority announced it would begin fining carriers using currencies other than the Naira after the CBN released $256 million in funds.
Airlines including British Airways, Emirates, Qatar Airways, and Virgin Atlantic, were reportedly only able to access $110 million during August; however, CNB assured that the remaining funds would be available 60 days forward on October 31. The outstanding funds currently account for 32% of trapped funds worldwide.
With the deadline looming, CNB has warned foreign airlines against “blackmailing” the country with threats to shut down operations. Speaking at the House of Representatives earlier this week, CNB Governor Gowin Emefiele noted that airlines would not lose any funds.
Photo: Jake Hardiman | Simple Flying
“Everyone is calling on CBN to release blocked funds, and I am doing everything I can to provide dollars for you to repatriate your money. How then can they go about and begin to say that they have not received money? This is an extra allocation. This is something I have told [foreign carriers] that we will continue to do so that you will not blackmail the country. $120 million will be due on October 31.”
Nigeria’s federal government slammed the threats from foreign carriers threatening to pull services, citing Nigeria’s expanding influence on the African aviation market.
Minister of Aviation Hadi Sirika stated:
“We are not afraid of being shut down. The country can thrive without the operations of foreign airlines. Countries have been shut down in the past for various reasons, yet they came out stronger. So, we cannot be intimidated. We are talking about the biggest market in Africa here, which cannot be compared with other countries in this part of the world. So, it is in the interest of the operators to be in business here. We are not going to be intimidated in any way at all.”
Photo: Getty Images
Emirates will be suspending operations in Nigeria on Friday following a recently implemented visa ban on young visitors from 20 separate African nations. The airline resumed services to Lagos in September after a brief pause due to disputes over its $85 million currently trapped in the country. Delta Air Lines and British Airways similarly halted operations in the country back in August.
Emefiele has called on foreign airlines to respect the Bilateral Aviation Services Agreement to resolve the financial issues, criticizing foreign governments for refusing to allow reciprocal operations by Nigerian carriers.
IATA representative Samon Fatokun expressed a differing opinion, calling on the Nigerian government to uphold its contractual obligation to the BASA and repatriate the funds into US Dollars, with the crisis portraying a negative image of the country to foreign investors.
What are your thoughts on the ongoing issues with Nigeria’s aviation industry? Let us know in the comments.
Sources: Vanguard, The Guardian Nigeria, The Premium Times