The Central Bank of Nigeria (CBN) has disbursed $61.64 million to foreign airline operators through various Deposit Money Banks (DMBs), as part of its commitment to clearing the backlog of matured foreign exchange in the banking system.
Mrs. Hakama Sidi-Ali, the Acting Director of Corporate Communications, disclosed this in Abuja on Sunday, highlighting the CBN’s efforts to reduce outstanding liabilities to foreign airlines. Over the last three months, the CBN has redeemed outstanding forward liabilities totaling nearly $2 billion.
“This underscores the CBN’s commitment to resolving pending obligations and a functional foreign exchange market,” Sidi-Ali stated. “These payments signify CBN’s ongoing efforts to settle all remaining valid forward transactions, alleviating the current pressure on the country’s exchange rate.”
The initiative is expected to significantly boost the Naira against other major world currencies and enhance investor confidence in the Nigerian economy.
Background: Addressing FX Backlog Challenges
Foreign companies operating in Nigeria have faced challenges in repatriating profits or capital due to a shortage of USD in the Central Bank of Nigeria, resulting in a substantial backlog amounting to billions of USD.
During his senate screening, the Governor of the CBN emphasized that the immediate priority of the new team is to clear the backlog of FX owed to businesses, estimating the figure to be around $7 billion. In November, ENTREPRENEURNG previously reported the initiation of the clearance process for the FX backlog by the country’s lender of last resort. This was confirmed when PZ Cussons announced it had started repatriating cash back to her holding company in the United Kingdom.
