The over 25 foreign airlines flying into Nigeria have lost a combined sum of $240m (N67.2bn) following the adoption of a new foreign exchange policy by the Central Bank of Nigeria, investigations have revealed.
The International Air Transport Association, the global trade body for about 260 airlines, had in May put the unremitted ticket sales proceeds in Nigeria by international airlines at $600m.
However, the movement of the CBN’s interbank exchange rate from N197 per dollar to over N280 per dollar, following the adoption of the new forex policy, has made the foreign airlines to lose at least 40 per cent of the $600m.
What this means is that the foreign airlines will lose about 40 per cent of the amount, which has been held in naira in Nigerian banks for several months due to dollar shortage. This translates to about $240m (N67.2bn).
Confirming the development, the country manager of an Europe-based carrier operating in Nigeria, who spoke on condition of anonymity because he was not authorised to speak on the matter, said foreign airlines operating in the country had lost at least 40 per cent of their ticket sales proceeds, which had been trapped for several months.
The foreign carriers are expected to complete the repatriation of the outstanding ticket sales proceeds this month.
The Chief Executive Officer, Kenya Airways, Mbuvi Ngunze, told Bloomberg that the sub-Saharan Africa’s third-largest carrier was expected to start receiving payments for outstanding fares from the CBN this month.
He said the carrier had been unable to collect $25m from its sales agents in Nigeria, Angola and Sudan because of dollar shortages in the oil-producing countries.
The CBN had on June 20 abandoned its 16-month currency peg and sold $4bn in the spot markets to clear a backlog of demand for hard currency.
Following the central bank’s forward and spot sales, the naira settled at 280 to the dollar on the interbank market.
Commenting on the loss made by foreign airlines, a travel expert and Chief Executive Officer, Gashire Travels, Mr. Gbenga Adebayo, said it was unfortunate that the foreign carriers were losing money to the new forex policy.
He, however, said it was better for that to happen than for the carriers to keep having their funds trapped in the country.
“Business is full of ups and downs. They have made huge profits in the Nigerian market in the past and they will still make more in the future,” he added.