The International Air Transport Association (IATA) says
Nigeria has been removed from the list of countries with unrepatriated
airlines’ revenue — otherwise known as blocked or trapped funds.
Kamil Al-Awadhi, IATA’s regional vice-president for Africa,
Middle East, and Europe (AME), spoke at a news conference during the
association’s recent annual general meeting (AGM).
He said while blocked funds remain a challenge in the
region, there have been “significant” improvements in countries like Nigeria,
Egypt and Ethiopia.
“Significant improvements have been made in Nigeria, Egypt
and Ethiopia over the last year, with Nigeria no longer on the list of blocked
funds countries,” the vice-president said.
“However, countries in AME continue to top the blocked funds
list. Mozambique is currently withholding the largest amount of blocked funds
globally, followed by the XAF Zone (Cameroon, Central African Republic, Chad,
Republic of the Congo (Congo-Brazzaville), Equatorial Guinea, Gabon) and
Algeria and Lebanon.”
Al-Awadhi said as of April, a total of $1.28 billion is
withheld globally, increasing from $1.7 billion in October 2024.
He said 29 AME countries are currently withholding
international airlines’ revenues, with a total of $1.1 billion – representing
85 percent — being blocked in Africa and the Middle East.
“… out of that, $919 million is tied up in African
countries,” the vice-president added.
According to a breakdown provided by the IATA official,
countries with the highest amount of blocked funds in the AME as of April,
include Mozambique ($205 million) XAF Zone ($191 million) Algeria ($178
million) Lebanon ($142 million) and Angola ($84 million).
‘GOVERNMENTS SHOULD PRIORITISE AVIATION IN ACCESS TO FX’
Al-Awadhi bemoaned the impact of unrepatriated revenues, and
stressed the importance of cash flow to airlines’ business sustainability.
He said when airlines are unable to repatriate their funds,
it severely impedes their operations and limits the number of markets they can
serve.
“Reduced air connectivity hampers countries’
competitiveness, diminishes investor confidence and labels countries as a
high-risk place to do business,” he added.
“Strong connectivity is an economic enabler and generates
considerable economic and social benefits.
“We call on governments to prioritise aviation in the access
to foreign exchange on the basis that air connectivity is a vital key economic
catalyst for the country.”
For years, blocked funds have been a subject of dispute
between Nigeria and international carriers.
As of 2023, Nigeria was said to be withholding the highest
amount of airlines’ revenue in the world, due to a chronic foreign exchange
(FX) shortfall that plagued industries.
In response, aviation companies suspended operations in
Nigeria and removed local travel agents from issuing tickets.
As tensions flared, the Central Bank of Nigeria (CBN) under
Godwin Emefiele, its erstwhile governor, released $265 million to airlines to
halt the crisis in the aviation sector in 2022.
The disbursements continued under the current
administration, with an additional $61.64 million as Nigeria renewed its
commitment to clear its outstanding FX backlog — estimated at about $7 billion.
In March 2024, the CBN announced that it successfully
cleared the FX backlog, with the IATA later confirming that Nigeria had cleared
98 percent of blocked airlines’ funds.
The last reported blocked funds in Nigeria were about $850
million.
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