South African Airways starts selling tickets to Nigeria in dollars to get around trapped funds problem

SOUTH African Airways has announced plans to start selling tickets in US dollars so it can remit its profits out of Nigeria without any hassle and avoid having its funds trapped in its naira accounts.

Due to a chronic dollar scarcity ion Nigeria, international businesses are having problems remitting their funds from the country. Airlines have been the hardest hit by the problem as the Central Bank of Nigeria (CBN) does not have enough dollars to convert all their naira, so they can make immediate remittances.

At the moment, foreign airlines operating in Nigeria have about $450m trapped in the country, which they are unable to remit. To get round this problem, South African Airways has announced that as from today,  August 10, 2022, passengers can only issue Sold Inside Ticketed Inside (Siti), that is, trips emanating from Lagos-Johannesburg-Lagos tickets in naira.

In other words, all tickets issued in Nigeria will be paid for in naira in line with the CBN policy that tickets issued in the country should be paid for in naira. However, the airline added that all other tickets, such as Sold Outside Ticket Inside (Soti) and Sold Outside Ticketed Outside (Soto), that is, tickets issued outside, would be paid for in dollars.

Under the latest arrangements, tickets sold outside and tickets issued outside the country would be issued in dollars. An airline spokesman said: “Note that only tickets with travel originating from Nigeria can be issued in naira."

Over 27 foreign carriers operating in Nigeria have their funds trapped in the CBN without any hope of getting them back to their home countries. Many of the foreign carriers, out of frustration, have introduced other tough policies that will help cushion the impact of the trapped funds on their operations.

Such policies, which include an increase in fares on the different international routes and the suspension of the sale of cheaper tickets, have subjected Nigerian travellers to serious hardships. For instance, fares on Nigerian routes have become among the most expensive in across the continent.