• The move aims to ease pressure on forex reserves and stabilize the naira.
• Foreign carriers fear cash flow strains if revenue repatriation delays persist.
• Local travel agencies expect fairer competition and stronger domestic demand.

Nigeria’s government is considering a ban on the sale of airline tickets in foreign currencies by international carriers, according to local media reports quoting Yinka Folami, president of the National Association of Nigerian Travel Agencies (NANTA). If implemented, the measure would mark a major step in efforts to stabilize the naira and reduce pressure on the country’s foreign reserves.

The main goal is to curb naira volatility by limiting local demand for U.S. dollars, which has contributed to its depreciation in recent years. Observers say the initiative could also help preserve Nigeria’s forex reserves, frequently used to allow foreign airlines to repatriate their earnings.

A challenge for international airlines

For foreign carriers, the measure could create serious cash flow constraints. Airlines have repeatedly criticized Nigeria for delays in converting and transferring their revenue in foreign currencies, a situation that previously led some, including Emirates and Etihad Airways, to suspend flights.

Until 2023, Nigeria accounted for the bulk of the global backlog of blocked airline funds from ticket sales. A requirement to bill exclusively in naira could reignite those financial tensions if administrative bottlenecks persist.

Relief for local travel agencies

Local travel agents view the proposal as both an economic and symbolic victory. Nigerian agencies, often disadvantaged by dollar-based pricing, see an opportunity to regain commercial flexibility and improve profit margins.

By simplifying transactions for domestic customers, the reform could also boost local demand and strengthen Nigerian intermediaries’ role in the national air transport value chain.

Potential effects on ticket prices

In the short term, the transition could lead to higher ticket prices due to exchange rate volatility and technical adjustments by airlines. However, if the policy succeeds in stabilizing the naira, fares could better reflect local purchasing power in the medium term.

The proposed reform comes as Nigeria seeks to revive its plan for a national airline to capture growth in domestic, regional, and international markets. The previous attempt under former president Muhammadu Buhari collapsed amid legal disputes and governance issues.

Ultimately, the success of the naira billing policy will depend on the government’s ability to ensure smooth repatriation of foreign airlines’ revenues, maintain currency market stability, and secure effective coordination among banks, regulators, and aviation stakeholders.