Godwin Emefiele says the Central Bank of Nigeria is not mandated by law to provide airlines with all their dollar earnings.
Mr Emefiele, the CBN governor, made the statement after the monetary policy committee’s meeting held at the CBN headquarters in Abuja on Tuesday.
“No law that makes it compulsory that you must buy your dollars from the central bank. When you put money in your account, what it means is that you tell your bank to buy your dollar,” the CBN governor stated while addressing journalists on the recently quelled forex crisis between international airlines and the apex bank.
The International Air Transportation Association (IATA) last month called out President Muhammadu Buhari’s regime on Twitter over the non-repatriation of airlines revenue which had grown from $450 million in May to $464 million in July.
The call-out was followed by Emirates’ announcement to suspend all flight operations in Nigeria, prompting the CBN to quickly release $265 million to clear part of the forex backlog and avert a total collapse of the aviation sector.
However, Mr Emefiele clarified it was not the role of CBN to give airlines all their dollar revenues, citing the Bilateral Air Services Agreements (BASA), insisting the agreement did not explicitly say “you must repatriate all your dollars.”
“We will do everything possible and are determined to clear the backlog and consistently, at all the retail interventions. As long as the bank accounts are funded, we will continue to ensure that the cumulative backlog is cleared,” asserted Mr Emefiele. “But I think it is important for me to say this — the foreign airlines are saying this because they said we should respect bilateral air services agreements (BASA) that say proceeds of all their ticket sales must be repatriated out of the country. It did not say you must repatriate all your dollars.”
Mr Emefiele stressed that “no law that makes it compulsory that you must buy your dollars from the central bank. When you put money in your account, what it means is that you tell your bank to buy your dollar” and added that “your bank will go to the legitimate or approved sources which in this case is the I&E to buy dollars and pay for your ticket sales proceeds.”
According to the CBN governor, “if they don’t find, they may resort to the CBN, but it doesn’t mean that the CBN is under compulsion to provide your dollars because it is good for me to say this so that people don’t just rest on the conclusion that CBN is under compulsion to provide the dollars.”
Mr Emefiele said the withheld funds were speedily released to douse the pressure building up in the sector, which would have disrupted the travel plans of many Nigerians if left unattended.
“In spite of this, we have seen that the number of travels or naira value of tickets issued by the airlines has increased. We decided to release $265 million when the pressure was building aggressively,” noted the CBN governor.