Release $717.4m airline trapped funds, Senate urges CBN

The Senate on Wednesday urged the Central Bank of Nigeria (CBN) to release $717,478,606 airlines funds trapped in the country.

It also asked the apex bank to allocate $25 million to airlines operating in the country at its forthnightly dollar auction.

The red chamber further appealed to the airlines operating in the country not to withdraw their services while efforts are on to resolve the issue.

These resolutions followed a motion by Senator Biodun Olujimi (PDP – Ekiti South) during plenary on Wednesday.

The motion was presented by the Vice Chairman of the Senate Committee on Aviation, Senator Ibn Bala Na’Allah (APC – Kebbi South).

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In his lead debate, Na’Allah noted that since January 2021, Nigeria has been the most challenging country in the world for airlines to repatriate their funds to support their operation.

He said, “In February 2023, Nigeria alone accounted for 44 per cent of total airlines blocked funds in the entire world.

“The total airlines’ blocked funds in Nigeria as at March 28th, 2023 amounted to $717,478,606, comprising matured bids that the Central Bank of Nigeria (CBN) is yet to deliver, bids yet to mature and cash balances in airlines’ accounts for repatriation.

“Matured bids not delivered by CBN amounted to $186.5m, amounting to 26% of total blocked funds while three stakeholders (IATA, Qatar Airways, and Ethiopian Airlines) accounted for 57 per cent of total blocked funds.

“Review of airlines’ blocked funds in Nigeria in the last six months shows an average month-on-month increase of $49.3 million.”

He said the consequences of these blocked funds are: “cheap tickets are not available in Nigeria because taxes and inflation would have eroded the profit when the funds are kept for a very long time thereby making tickets very expensive and limited because neighbouring countries get the cheap tickets because of prompt payments due to prompt repatriation of funds.

“Loss of revenue to the airlines and the nation by extension; airline companies folding and relocating to other neighbouring countries thereby depleting our nation’s workforce ultimately increasing unemployment rate; and stoppage of foreign direct investments in aviation and other related industries in Nigeria.”