Nigeria has settled 98% of its FX backlog owed to international airline operators, which is likely to provide some optimism as the country struggles to find price stability in its FX market. 

According to the International Air Transport Association (IATA), Nigeria has cleared 98% of the $850 million owed to airlines, leaving a residual $19 million pending verification by the Central Bank of Nigeria.

The move comes after Nigeria struggled to allow foreign airlines to repatriate their earnings because of an acute dollar shortage. At its peak, Nigeria owed up to $850 million to international airlines in June 2023 and only settled $61 million of this amount, which the airlines considered insignificant. In January 2024, the airlines threatened a strike and some others scaled back their operations. 

“We commend the new Nigerian government and the Central Bank of Nigeria for their efforts to resolve this issue. Individual Nigerians and the economy will all benefit from reliable air connectivity, for which access to revenues is critical. We are on the right path and urge the government to clear the residual $19 million and continue prioritizing aviation,” the IATA wrote in a statement.

Nigeria’s progress in clearing the FX backlog is a positive sign for the country’s aviation industry, which was severely impacted by the blocked funds. The news comes on the back of the CBN’s effort to clear a $7 billion FX backlog and stabilize the exchange rate. 

In February 2024, Olayemi Cardoso announced that the FX backlog had dropped to $2.2 billion. In January 2024, the CBN disbursed $61.64 million to foreign airlines through various deposit money banks. In the same month, the apex bank released $500 million to various sectors to address the backlog of verified foreign exchange transactions.

Cardoso announced in March that all valid foreign exchange backlogs of $7 billion had been settled. The CBN also reported that external reserves had increased by $993 million to $34.11 billion, the highest level in eight months.