CBN Approves Special FX Window for Airline Operators, Manufacturers

Dele Ogbodo in Abuja

The Central Bank of Nigeria (CBN), friday approved a Special Secondary Market Intervention Retail Sales (SMIS) forex window for domestic airline operators and manufacturers to stimulate ease of doing business in the sectors.

The Minister of State for Aviation, Mr. Hadi Sirika, said the important one-off-stop-shop would fast track easy clearance of the backlog of matured Foreign Exchange (FX) obligations.

The disclosure made public in a statement signed by Mr. James Odaudu, the Deputy Director, Public Affairs in the ministry quoted the minister as saying “also to benefit from the intervention are raw materials and machineries for manufacturing companies and agricultural chemicals.”

According to the statement, the resolution by the apex bank to intervene in the Inter-Bank Forex market through forward settlement is expected to engender market confidence, ensure access to Forex by the airlines to settle their obligations and sustain the integrity of the Nigerian Inter-Bank Foreign Exchange market.

Sirika said: “The import of this peculiar exercise is that the CBN will not apply the relevant provisions under clause 2.4.3 (i) of its Revised Guidelines for the Operation of the Nigerian Inter-Bank Foreign Exchange Market which provides that all, SMIS bids shall be submitted to the CBN through the FXPDs. Consequently, CBN shall receive bids from all the Authorised Dealers.

“The CBN will also not apply the relevant provisions under clause 2.4.3 (i) of the Guidelines which provide that “Spot Forex sold to any particular end-user shall not exceed 1 percent of the overall available funds on offer at each SMIS session.”

CBN said, whereas the bids are on Spot Forex basis as the Authorised Dealers’ accounts with the CBN will be debited in full for the Naira equivalent of the USD bid amount, adding that CBN will settle the bids through forward settlements of 2 months.

Customers that are not willing to accept the settlement terms, the statement averred, have been advised not to participate in this Special SMIS-Retail.

Sirika, described the special intervention by CBN as a great relief for airline operators in the country who have complained bitterly about their inability to access the required Foreign Exchange to settle their backlog of obligations and which has adversely affected their operations.

According to him, the aviation sector is so critical to the nation’s security and global image that it cannot be overlooked or toyed with, adding that the apex bank had taken the right decision that would not only strengthen existing airlines, but also inspire confidence in aspiring operators in Nigeria’s aviation industry.

Sirika, at a recent meeting with members of the Airline Operators of Nigeria (AON) promised to take up the issues with the authorities of the CBN after the operators complained about lack of access to Forex, with many of them on the verge of folding up.