The International Air Transport Association disclosed yesterday that funds trapped by foreign carriers operating in Nigeria and other African countries have reached $1.68 billion.
This was announced by the Regional Vice President of Africa and Middle East, Kamil, who stated at the opening of the African Airlines Association annual general assembly in Kampala, Uganda, that since 2018, a massive amount of funds have been repatriated from Angola, Ethiopia, Ghana, Nigeria, and Zimbabwe through closer relations with respective governments.
The IATA reported that over the past few years, the commission has been partnering with governments of some African nations to sort out ways to liberate foreign carriers' trapped funds, which started in 2018, while a more significant amount has been held back in Angola, Ethiopia, Ghana, Nigeria, and Zimbabwe.
In January 2023, airlines trapped funds in Nigeria rose to $743,731,027 from $662 million in January 2023 and $549 million in December 2022. As of June 4, 2023, the records showed that the trapped funds of foreign airlines operating in Nigeria have risen to $812.2 million.
Alawadhi said in his speech that restoring trapped funds by governments from repatriation has been extremely difficult for the IATA, as it has continued pressuring the government to keep up on clearing the backlog of trapped funds.
He said,
- Currently, $1.68 billion in airline funds still need to be blocked across the continent. The second major issue plaguing Africa is blocked funds. As of September, $1.68 billion of airline funds are blocked across Africa out of $2.36 billion globally. The numbers are alarming, and this impact on connectivity is devastating.
- Aviation is capital-intensive. Cash flow is key for airlines’ business sustainability – when airlines are not able to repatriate their funds, it severely impacts their operations and their decisions on where to fly.
- But the risk of blocked funds is not just limited to airlines; the negative impact extends to the countries blocking the funds. It impacts the country’s economy and its connectivity, and it hurts investor confidence and reputation. Aviation is not only an economic enabler, it is a pillar of modern economies. Governments must prioritize aviation and find sustainable solutions in the clearing of blocked funds, and we continue to offer our support in any way we can. Africa’s aviation industry is still recovering from significant losses due to the pandemic.