Nigeria’s foreign air travel expenses have soared to approximately $4.66 billion within a span of 15 months, according to data from the Central Bank of Nigeria (CBN). This sum represents the total amount transacted to foreign airlines from Q1 2022 to Q1 2023.
Foreign airlines purchase foreign exchange from the CBN, utilizing it to repatriate proceeds from ticket sales back to their home countries. There are currently 25 foreign airlines operating in Nigeria.
The CBN data, as reported by Punch, reveals a quarterly breakdown of these expenditures. It shows that foreign airlines purchased $496.44 million in Q1 2022; $1.03 billion in Q2 2022; $1.36 billion in Q3 2022; $887.17 million in Q4 2022; and $890.3 million in Q1 2023. This reflects a 79 per cent surge between Q1 2022 and Q1 2023.
Surprisingly, despite the large sums of money being exchanged, foreign airlines have been facing difficulties in repatriating their funds. The International Air Transport Association (IATA) in March made a plea to the Nigerian government, seeking the release of international airlines’ trapped funds in the country.
According to IATA, the amount of trapped airline funds in Nigeria saw an increase from $662 million in December to $743.7 million in January. “For over a year, Nigeria has been the country with the highest amount of airline-blocked funds in the world,” IATA stated. From May 2022 to July 2022 alone, the amount increased from $450m to $464m. This has been linked to the higher fares being charged on Nigerian routes.
SOURCE: Politics Nigeria