June 3, 2024.
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The International Air Transport Association (IATA) has confirmed that about 98% of airlines trapped funds amounting to $831m in Nigeria has been successfully repatriated by the international carriers.
This leaves a balance of $19m representing a meager 2% of the $850m trapped funds in the country.
IATA further disclosed a 28% decrease in the amount of airline funds blocked from repatriation by governments. The total blocked funds at the end of April stood at approximately $1.8 billion, a reduction of $708 million (28%) since December 2023.
The Director-General of IATA, Willie Walsh, made these developments known in a statement on Sunday titled “Blocked Funds Drop to $1.8 billion with Major Clearance in Nigeria, Challenges Persist” while praising the Nigerian government for their efforts in ensuring the repatriation.
Walsh noted that as of June 2023, Nigeria had blocked funds totaling $850 million, which had a considerable impact on the operations and financial health of airlines operating there.
He explained 98% of the $850 million had been paid while the sum total of $19 million, representing about 2% of the funds, is still outstanding.
“At its peak in June 2023, Nigeria’s blocked funds amounted to $850 million, significantly affecting airline operations and finances in the country.
”Carriers faced difficulties in repatriating revenues in U.S. dollars, and the high volume of blocked funds led some airlines to reduce their operations and one carrier to temporarily cease operations to Nigeria, which severely impacted the country’s aviation industry.
“However, as of April 2024, 98% of these funds have been cleared. The remaining $19 million is due to the Central Bank of Nigeria’s ongoing verification of outstanding forward claims filed by the commercial banks.
“We commend the new Nigerian government and the CBN for their efforts to resolve this issue.
“Individual Nigerians and the economy will all benefit from reliable air connectivity for which access to revenues is critical,” Walsh said.
IATA reiterated the call for governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities in accordance with international agreements and treaty obligations.
”The reduction in blocked funds is a positive development. The remaining $1.8 billion, however, is significant and must be urgently addressed.
The efficient repatriation of airline revenues is guaranteed in bilateral agreements. Even more importantly, it is a prerequisite for airlines—who operate on thin margins—to be able to provide economically critical connectivity. No business can operate long-term without access to rightfully earned revenues,” said Walsh.
According to the statement, Pakistan, Bangladesh and Algeria top the list of top three countries with most trapped funds with $411m, $320m and $286m respectively.(www.naija247news.com).
