Senate Directs CBN To Give Foreign Airlines 2% Of Foreign Reserves

The Senate has directed the Central Bank of Nigeria (CBN) to increase the foreign exchange allocation to foreign airlines operating in Nigeria.

This was made known on Wednesday after a motion titled; “Current Issues on Airlines Blocked Funds in Nigeria” moved by Senator Biodun Olujimi. 

Senator Ibn Na’Allah, who represented Olujimi, said the Senate resolves that the CBN should increase the allocation by $25 million. 

The upper chamber’s directive comes at a period the foreign airlines have $717.47 million blocked funds in Nigeria, which accounts for the most blocked airlines’ funds in the world, as of March 2023.

The lawmakers also resolved that President Muhammadu Buhari should compel the CBN to release the $717.47 million to the foreign airlines to ensure the companies adequately operate.

Should the CBN comply with the Senate’s directive, this will wipe off 2.03 per cent of the foreign reserves of Nigeria, which was $35.19 billion as of Tuesday, 16 May.

Recall that last year, Emirates Airlines and other foreign airlines had protested in the second quarter of 2022 their inability to repatriate their ticket sales due to restrictions on foreign exchange access.

International airlines in Nigeria suspended and reduced their operations in the country, forcing the CBN to release part of the funds. As of then, the total airlines’ trapped fund was $450 million.

However, the amount has increased from $450 million to $717.47 million, threatening the stability of the foreign air travel market in Nigeria.

The Senate appealed to the foreign airlines to continue operations while the foreign exchange scarcity is resolved.

In a post on the Senate’s official Twitter account, it was stated that: “Senate resolves to: (i) Reverse the current trend of increasing blocked funds in Nigeria and urge the CBN Governor to increase the current allocation to airlines at the retail auction by $25m fortnightly; 

“ii. Urge Mr. President to direct the CBN Governor to pay up the blocked funds to the affected airlines; and 

“iii. Appeal to the Airlines not to withdraw their services while efforts are on-going to resolve the issue.”

Fakoyejo Olalekan

+ posts

• Over N535.37bn Gained By Shareholders In Dangote Sugar, Tantalizer, Others
• Negative Signal: Board Director, Sola David-Borha, Sells Off All Shares In Stanbic IBTC
• NLC To Embark On Warning Strike On Tuesday
• CBN-backed Official Window Record Increase In Dollar Rate, USD Falls In Black Market