The Governor of Central Bank of Nigeria, Mr. Godwin Emefiele; the Speaker of the House of Representatives Hon. Femi Gbajabiamila and Minister of Aviation, Hadi Sirika yesterday held an interactive session, during which they deliberated and sought for solution to the $700 million of foreign airlines’ funds trapped in the country.
Gbajabiamila had called for the meeting following threat by the foreign airlines to stop flying Nigerians routes from October 28, 2022, if nothing was done by the government to resolve the backlog.
However, Emefiele, while addressing foreign affairs and aviation stakeholders at the meeting told the gathering that contrary to IATA’s representative’s position that nothing had been done to reduce the backlog, $265 million had been earmarked for disbursement to the foreign airlines through their various banks.
He noted that the central bank was working outside the box to mop up foreign exchange and strengthen the naira and by extension the economy through the RT200 FX policy which aims to raise $200 billion from foreign exchange (FX) earnings from non-oil proceeds over the next three to five years,
According to him, the RT200 FX is the policy focusing on the repatriation of FX of non-oil exports proceeds into the Nigerian economy which recorded almost $1 billion in the third quarter of 2022.
Emefiele however lamented that one-third of the world economy is currently in recession due to the damaging effects of the Covid-19 pandemic and the ongoing war between Russia and Ukraine.
He said, “The global community is facing rising incidents of unemployment. Indeed, most of the countries of the world are facing rising inflation. As a result of this year alone, the USA happens to have raised rates almost by 3.75 per cent in 2022.
“That has created some serious inflation pressures and depreciation on the currencies of other countries. From the CBN, since February this year, we introduced the RT 200 programme which is that programme introduced in order to encourage repatriation of forex proceeds from exporters of non-oil export products.
“We are gratified that the programme is doing well. When we started it, the first six weeks in February and March, we saw repatriation and we paid rebates on repatriation of about $62 million.
“The second quarter, we saw an astronomical improvement to $622 million in exports proceeds of non- oil. For the third quarter, we have seen almost close to a billion dollars.
“Aside from the prioritisation of FX, we have always accorded airlines priority. On August 31, you spoke to me because I have to give you credit for that. That day I made a decision to use our discretion to allocate $265 million to the foreign airlines.
“We did $110 million in spot and the rest 60 days forward. On that day we allocated to IATA $32 million through UBA, Qatar Airways got $22.8 million through Standard Chartered, Emirates got $19.6 million through Access Bank, BA got $5.5 million through GTB and Virgin Atlantic got $4.8 million through Zenith and so on. How then can they go about and begin to say they have not received their money?”
Emefiele added: “This is extra allocation which we used our own discretion to give you and which I have told you personally that we would continue to do so as to make you guys happy so you don’t continue to blackmail this country.
“Out of that, $120 million would be due on October 31. The monies would be paid. So what else do you want me to do. I must confess there would be delay. Gentlemen, I can print naira, even though I have been accused of printing naira, but I cannot print dollars.
“We have to earn it or borrow it. All these things we are talking about boils down to reciprocity and IATA cannot shy away from that,” he said.
Emefiele called on other foreign countries to grant landing permits to Nigerian Airlines to fly their routes so as to reduce the burden of accumulated funds going forward.
“IATA has the responsibility to get Nigerian airlines to fly on the basis of reciprocity. Everyone is calling on the CBN, blocked funds, and I am doing everything I can to provide dollar for you to repatriate your money.
“How can you come here and begin to tell us that you were not a party to BASA and for that reason you are not interested in the concept of reciprocity when you know that would benefit your country and our country,” he added
On his part, Gbajabiamila said the issue of blocked or trapped funds of foreign airlines was giving the House a great course for concern, hence the need for the forum to find lasting solutions bearing in mind the prevailing economic imperatives.
The Speaker while noting that the principle of reciprocity required that Nigerian carriers are also allowed to fly into countries whose airlines have a huge market in Nigeria, appealed to the CBN Governor to seek ways of raising forex for the airlines.
He opined that allowing Nigerian airlines operate many of the international routes would reduce the incident of trapped funds in the future.
In his contribution, Sirika told the gathering that Nigeria under President Muhammadu Buhari had shown the capacity and audacity to stand up in difficult moments to do the right thing to help the country.
While assuring that all issues would be resolved, Sirika said, “in 2016, when we came in there were about $480 million blocked in Nigeria that year we were in recession and revenues had dwindled.
“We just heard the CBN Governor say we either earn or borrow it. At that moment, we had not even started borrowing. So we went to Mr. President and informed him of the difficulty we were in. And he asked the CBN Governor and Minister of Finance to resolve the problem, which was done. So we have demonstrated as a country to be able to respond even in difficult moments to things that are obligations upon us.”
SOURCE: https://www.thisdaylive.com/index.php/2022/10/25/emefiele-gbajabiamila-sirika-seek-solution-to-trapped-foreign-airlines-funds/
