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Senate Urges CBN To Release $717m Airlines Trapped Fund

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The Senate yesterday urged the Central Bank of Nigeria (CBN) to release $717,478,606 airline funds trapped in the country.

The upper chamber also called on the apex bank to allocate $25million to airlines in Nigeria at its forthnight dollar auction and called on the Federal Government to reverse the trend of increasing airlines blocked funds in the country.

It called on President Muhammadu Buhari to direct the CBN Governor, Godwin Emefiele, to release the blocked funds to the affected airlines.

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The Red Chambers further appealed to the airlines not to withdraw their services while efforts were ongoing to resolve the issue.

These resolutions were sequel to the consideration of a motion entitled: “Current Issues on airlines blocked funds in Nigeria”, which was sponsored by Senator Biodun Olujimi (PDP – Ekiti South) during plenary.

The motion was presented by the Vice Chairman, Senate Committee on Aviation, Senator Ibn Bala Na’Allah.

In his lead debate, Na’Allah said the Senate “Notes that since January 2021, Nigeria has been the most challenging country in the world for the airlines to repatriate their funds to support their operation.

“Further notes that in February 2023, Nigeria alone accounted for 44 per cent of total airlines blocked funds in the entire world.

“Worried that the total airlines blocked funds in Nigeria as at March 28th, 2023 amounted to $717,478,606, comprising matured bids that the Central Bank of Nigeria (CBN) is yet to deliver bids yet to mature and cash balances in airlines’ accounts for repatriation.’’

“Concerned that matured bids not delivered by CBN amounted to $186.5m, amounting for 26% of total blocked funds while three stakeholders (IATA, Qatar Airways, and Ethiopian Airlines) accounted for 57 per cent of total blocked funds;

““Regrets to discover that a review of airlines’ blocked funds in Nigeria in the last six months shows an average month-on-month increase of $49.3million.

“Further regrets that the consequences of these blocked funds are: Cheap tickets are not available in Nigeria because taxes and inflation would have eroded the profit when the funds are kept for a very long time thereby making tickets very expensive and limited because neighbouring countries get the cheap tickets because of prompt payments due to prompt repatriation of funds;

“Loss of revenue to the Airlines and the Nation by extension, airline companies folding and relocating to other neighbouring countries thereby depleting our Nation’s workforce ultimately leading to unemployment rate; and stoppage of foreign direct investments in aviation and other related industries in Nigeria.”

Senators in their contribution supported the motion and voted to approve the prayers when they were put to voice vote by Senate President Ahmad Lawan.