The International Air Transport Association (IATA) has voiced apprehensions that foreign airlines operating in Nigeria could face losses totaling $200 million due to the depreciation of the naira against the dollar.
In an interview with CNBC, IATA’s Regional Vice-President for Africa and the Middle East, Kamil Al Awadhi, highlighted the escalating challenge of trapped funds, exacerbated by the significant devaluation of the naira.
The concern arises against the backdrop of reports indicating over $700 million in ticket revenue held by foreign airlines in Nigeria, a figure disputed by the Central Bank of Nigeria (CBN), which claimed to have settled verified debts owed to foreign carriers.
However, Al Awadhi stressed the imperative for the CBN to address outstanding ticket revenue still held in Nigeria, cautioning against unfair penalties inflicted by exchange rate fluctuations.
The depreciation of the naira has been a point of contention, with the currency plummeting from approximately 900 naira per dollar to over 1,400 naira per dollar in the official market.
Kingsley Nwokoma, President of the Association of Foreign Airlines and Representatives in Nigeria, echoed IATA’s concerns, emphasizing the need for the government to fulfill its payment obligations promptly. Nwokoma proposed exploring arrangements for periodic payments as a viable solution to mitigate the impact of currency fluctuations.
Susan Akporiaye, President of the National Association of Nigerian Travel Agencies (NANTA), acknowledged the partial settlement of accumulated debts to foreign airlines by the CBN, albeit at prevailing exchange rates. She highlighted the adverse effects of delayed payments, including passengers opting for flights from neighboring countries due to cost considerations.
The recent disbursement by the CBN, totaling $64.44 million, aimed to address outstanding claims by foreign airlines, bringing the total verified disbursement to the air transport sector to $136.73 million.
As stakeholders navigate the complex dynamics of currency valuation and debt settlement, the aviation industry in Nigeria grapples with the challenge of maintaining financial stability amidst economic volatility.