Senate urges CBN to release $717.4mn airlines’ funds trapped in Nigeria

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

The upper chamber also called on the CBN to allocate $25 million to airlines operating in Nigeria at its fourth-nightly dollar auction.

These resolutions were reached sequel to the consideration of a motion titled: “Current Issues on airlines blocked funds in Nigeria” sponsored by Senator Biodun Olujimi (PDP-Ekiti) on Wednesday at plenary.

Ms Olujimi chairs the Senate Committee on Aviation.

The committee’s vice chairman, Sen. Bala Na’Allah (APC-Kebbi), presented the motion on behalf of Mr Olujimi.

The upper chamber also called on the federal government to urgently reverse the trend of increasing airlines blocked funds in Nigeria.

It called on President Muhammadu Buhari to direct CBN Governor Godwin Emefiele to pay up the blocked funds to the affected airlines.

The upper chamber further appealed to the airlines operating in the country not to withdraw their services while efforts were ongoing to resolve the issue.

Moving the motion, Mr Na’Allah said that since January 2021, Nigeria had been the most challenging country in the world for the airlines to repatriate their funds to support their operation.

In February, Nigeria alone accounted for 44 per cent of airlines blocked funds worldwide.

As of March, airlines blocked funds in Nigeria amounted to $717,478,606, comprising matured bids that the CBN was yet to deliver, bids yet to mature, and cash balances in airlines’ accounts for repatriation.

The matured bids not delivered by CBN amounted to $186.5 million, accounting for 26 per cent of total blocked funds, while three stakeholders (IATA, Qatar Airways, and Ethiopian Airlines) accounted for 57 per cent of total blocked funds.

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

The consequences of these blocked funds are: cheap tickets are unavailable in Nigeria because taxes and inflation will erode the profit when the funds are kept for a very long time.

This makes tickets expensive and limited because neighbouring countries get cheap tickets due to prompt payments and repatriation of funds.

Senators, in their contributions, supported the motion and voted to approve the prayers when they were put to voice vote by Senate President Ahmed Lawan.