Domestic airlines seek $50m grant from CBN’s special forex window

Forum 7 years ago

Domestic airlines seek $50m grant from CBN’s special forex window

Domestic airline operators in the country have appealed to the Central Bank of Nigeria (CBN), to allot the local industry at least $50million grant from the foreign exchange (forex) special intervention programme.

The airlines, while commending the take-off of the programme, said domestic operators deserved equally wider forex window like their foreign counterparts, given their more important role in development of the local economy.

Recall that the CBN, following agitations by stakeholders, in October intervened in the inter-bank forex market, granting concession to some sectors, through forward settlement. Besides aviation, raw materials and machineries for manufacturing companies and agricultural chemicals are other beneficiaries.


The CBN’s Special Secondary Market Intervention Sales (SMIS) is, however, a one-off exercise dedicated to the clearance of the backlog of matured forex obligation for airlines, especially the international carriers that have funds stuck in Nigerian.
The Guardian yesterday learnt that the forex bidding processes opened about two weeks ago, with invitation sent to the airlines to place their request. Some airlines, however, could not meet the deadline as the invitation allegedly came without prior notice and closed too soon.

For airlines that made submission, on the basis of naira, they could immediately pool their forex grants expected within 60 days. Chairman of Arik Air, Joseph Arumemi-Ikhide, said considering the need of the local airlines, they deserved more than what they had been given in the short period that the window was opened for bidding.

Arumemi-Ikhide stressed that all activities of the airlines, from maintenance to fuel and other services are denominated in foreign exchange.

He said while the foreign airlines were being given more forex grants on account of their funds stuck in the Nigerian economy, the domestic airlines are more important to the economy since the money remains in the Nigerian system.

According to him, “That is why we are asking for better allocation that should also be a regular programme instead of one-off and the sudden approach. CBN should give us between $40million and $50million to grow the economy.

“Foreign airlines are collecting the money to take back to their country and pay salaries of their people overseas. We are the ones that remain here to benefit the system.

“We also have money stuck everywhere, we are not making noise about it. Arik’s money is in Angola and West African countries, why didn’t the International Air Transport Association (IATA) speak for the repatriation of our funds? It behoves upon us all to support our own and stop favouring foreign airlines against those that are ours,” he said.

The chairman noted that since former President Olusegun Obasanjo, no other administration has been bold enough to support and promote domestic airlines, but often quick to unfairly condemn them as weak.

Executive Vice President of Arik, Chris Ndulue, said while the forex intervention is good for the industry, it should be made available on continuous basis to the beneficiaries.

Chief Executive Officer of Med-View Airlines, Muneer Bankole, had also commended the initiative, with optimism that its implementation would upturn the fortunes of the aviation industry.

Bankole said: “The currency is actually the backbone of airlines, as it is all over the world. It has to be dollar denominated and the situation here has not helped the sector. We have cried out to the government to build an environment and a window in the Central Bank for the airlines to access, for relief. So, it is good that the intervention is coming but has to be properly done to benefit all,” he said.