Foreign airlines operating in Nigeria have repatriated over $4.66bn from the country in 15 months, according to data from the Central Bank of Nigeria (CBN). The data shows the amount of foreign exchange sold to foreign airlines by the CBN between the first quarter of 2022 and the first quarter of 2023.
Foreign airlines need to buy foreign exchange from the CBN to enable them to transfer their ticket sales proceeds to their respective home countries. There are currently about 25 foreign airlines that fly into Nigeria, offering various destinations and services.
The data reveals that the demand for foreign exchange by foreign airlines has increased by 79 per cent between Q1 2022 and Q1 2023. The data shows that the CBN sold $496.44m to foreign airlines in Q1 2022; $1.03bn in Q2 2022; $1.36bn in Q3 2022; $887.17m in Q4 2022; and $890.3m in Q1 2023.
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The highest amount of foreign exchange sold to foreign airlines was recorded in Q3 2022, with about $1.36bn. This was followed by Q2 2022, with about $1.03bn. The lowest amount was recorded in Q1 2022, with about $496.44m.
The repatriation of funds by foreign airlines has implications for Nigeria’s economy, which is dependent on oil exports for its foreign exchange earnings. The outflow of foreign exchange reduces the availability and value of the naira, the local currency, and increases the pressure on the external reserves, which are used to defend the naira.
The repatriation of funds by foreign airlines also affects the competitiveness and viability of domestic airlines, which have to contend with high operating costs, poor infrastructure, and regulatory challenges.
Domestic airlines have been calling for a level playing field and more support from the government to enable them to survive and grow.
SOURCE: BBN
