Foreign Airlines’ Trapped Funds in Nigeria Hits $812mn
Amidst the Central Bank of Nigeria’s (CBN) capital control measure, foreign airlines are finding it increasingly difficult to retrieve their earnings. Total blocked funds jumped to $812.2 million, according to the International Air Transport Association (IATA).
According to IATA, the blocked funds globally rose by 47% to $2.27 billion in April 2023, up from $1.55 billion in April 2022. Airlines operators had threatened to boycott Nigeria’s air space.
The spike in blocked funds indicates that airlines are struggling to repatriate their commercial earnings from certain markets, making it tough to maintain the crucial connectivity that stimulates global economic activity and job creation.
IATA’s Director-General, Willie Walsh, emphasized the importance of resolving this issue.
“Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets,” Walsh said.
“Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity and job creation.”
IATA’s recent estimates show that five countries, including Nigeria, account for an alarming 68.0% of the total blocked funds.
These countries are Nigeria ($812.2 million), Bangladesh ($214.1 million), Algeria ($196.3 million), Pakistan ($188.2 million), and Lebanon ($141.2 million).
In response to this situation, IATA has urged governments to comply with international agreements and treaty obligations that allow airlines to repatriate funds derived from ticket sales, cargo space, and other operations.
Non-compliance could further threaten the stability and continuity of the aviation industry.
“IATA urged governments to abide by international agreements and treaty obligations to enable airlines to repatriate these funds arising from the sale of tickets, cargo space, and other activities,” Walsh restated. #Foreign Airlines’ Trapped Funds in Nigeria Hits $812mn#