Major international airlines, such as Turkish Airlines, Emirates Airlines, and British Airways, are contemplating an exit from Nigeria unless the funds currently held in the country are promptly released. The International Air Transport Association (IATA) disclosed during a media briefing that Nigeria bears a substantial burden, accounting for nearly half of the blocked or trapped funds totaling US$2.57 billion in the African and Middle Eastern regions.Thank you for reading this post, don't forget to subscribe!
Kamil Alawadhi, Regional Vice President for Africa and the Middle East, emphasized this concern, citing Nigeria’s outstanding debt to these foreign airlines at $792 million, a figure close to half of the combined indebtedness of Egypt, Algeria, the XAF zone, and Ethiopia. The situation, if left unaddressed, raises the specter of potential blacklisting of Nigeria as a no-fly area, prompting suggestions for the Federal Government to consider declaring a state of emergency in the aviation sector.
In addition to the grim financial scenario, Alawadhi warned of far-reaching consequences for Nigeria’s aviation industry, including reduced airline capacity, diminished connectivity, and a detrimental impact on the country’s business environment. The repercussions extend to escalated ticket prices for both domestic and international travel, exacerbating an already soaring trend.
The IATA executive underscored the potential negative effects on investor confidence and foreign direct investment, accentuating the looming departure of multinational companies like Procter & Gamble. The risk of a cascading effect on the travel agency business further adds to the urgency of resolving the trapped funds issue.
Alawadhi stressed the critical role of cash flow in sustaining airline operations, emphasizing that failure to repatriate funds severely constrains market reach and operational capabilities. He urged the Nigerian government to prioritize aviation in foreign exchange allocation, emphasizing air connectivity as a pivotal economic catalyst that, if neglected, could erode competitiveness, diminish investor confidence, and tarnish the country’s reputation as a high-risk business environment.