The Central Bank of Nigeria, CBN's, recent remit of $265 million to about 20 or so foreign airlines operating in the country is a step in the right direction. The Federal Government had defaulted in her obligation to provide the dollar cover for about $600 million worth of ticket sales in naira for remission to these airlines through the International Air Transport Association, IATA.
During the same period, the total indebtedness to international carriers worldwide was $1.620bn, with Nigeria alone accounting for $600 million, thus emerging as the most notorious debtor. Just as it was being projected that the figure might rise to $1bn by December 2022, the Emirates Airlines, one of the most influential foreign carriers, threatened to suspend flights to Nigeria by September 1, 2022 until the situation improved. With this fund release, the airline has since withdrawn the threat.
The Federal Government claims that its inability to provide the required forex is due to scarcity of hard currency. This scarcity is obviously due to failure of governance. The Muhammadu Buhari regime has been paying empty lip service to the need to diversify our sources of foreign exchange earnings beyond crude oil rents. More than seven years on, little progress has been recorded.
To make matters worse, even the crude oil revenues have been experiencing uncommon trends. We should be in the middle of an oil boom. But, due to several factors, including massive oil theft and the divestment of some international oil companies from Nigeria, we are only able to meet about half of our 2.1 million barrels per day OPEC production quota.
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This is one oil boom that is not an oil boom! It is amazing that this is happening under the thumb of President Buhari who doubles as the Petroleum Resources Minister. There is very little evidence that his interest and experience in the oil sector in the past 45 years have been brought to bear fruits to the national cash cow.
The scarcity of the dollar in the economy has been worsened by the fact that politicians, especially political aspirants from the two main parties that have ruled Nigeria - the All Progressives Congress, APC, and Peoples Democratic Party, PDP - have mopped up hard currency. They freely deployed them to induce delegates during their various primary elections. The issues of lack of good and effective governance and leadership are at the heart of our multifaceted system failures.
We urge the Federal Government to quickly release all outstanding funds of the airlines to avoid disruptions in the smooth flow of passengers and goods into our economy. Our international image has been battered enough.
