BusinessDay
NigeriaDecides2023

Nigeria top countries with highest foreign airlines’ trapped funds –IATA

The International Air Transport Association (IATA) have disclosed that Nigeria is currently the top among the five markets with blocked funds.

IATA revealed that the top five markets with blocked funds (excluding Venezuela) are: Nigeria: $551 million, Pakistan: $225 million, Bangladesh: $208 million, Lebanon: $144 million and Algeria: $140 million.

IATA warned that the amount of airline funds for repatriation being blocked by governments has risen by more than 25 percent ($394 million) in the last six months.

IATA stated that total funds blocked now tally at close to $2.0 billion. IATA therefore called on governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities, in line with international agreements and treaty obligations.

In a statement by IATA, it stated that it is also renewing its calls on Venezuela to settle the $3.8 billion of airline funds that have been blocked from repatriation since 2016 when the last authorization for limited repatriation of funds was allowed by the Venezuelan government.

Read also: News Roundup: FG to complete rail projects with foreign loan, Emirates suspends flight into Nigeria over trapped funds…

“Preventing airlines from repatriating funds may appear to be an easy way to shore up depleted treasuries, but ultimately the local economy will pay a high price,” Willie Walsh, IATA’s director general said.

“No business can sustain providing service if they cannot get paid and this is no different for airlines. Air links are a vital economic catalyst. Enabling the efficient repatriation of revenues is critical for any economy to remain globally connected to markets and supply chains,” Walsh said.

Airline funds are being blocked from repatriation in more than 27 countries and territories.

IATA explained that the total airline funds blocked from repatriation in Nigeria are $551 million, adding that repatriation issues arose in March 2020 when demand for foreign currency in the country outpaced supply and the country’s banks were not able to service currency repatriations.

Despite these challenges, Walsh said Nigerian authorities have been engaged with the airlines and are, together with the industry, working to find measures to release the funds available.

“Nigeria is an example of how government-industry engagement can resolve blocked funds issues. Working with the Nigerian House of Representatives, Central Bank and the Minister of Aviation resulted in the release of $120 million for repatriation with the promise of a further release at the end of 2022.

“This encouraging progress demonstrates that, even in difficult circumstances, solutions can be found to clear blocked funds and ensure vital connectivity,” Kamil Al-Awadhi, regional vice president for Africa and the Middle East said.