Nigeria clears over $830mn blocked funds, says IATA
Eight countries account for 87% of total blocked funds, amounting to $1.6 billion at the end of April 2024.
The International Air Transport Association (IATA) has reported a 28 percent 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 percent) since December 2023 with the main driver of the reduction being a significant clearance of funds blocked in Nigeria.
"Egypt also approved the clearance of its significant accumulation of blocked funds. However, in both cases, airlines were adversely affected by the devaluation of the Egyptian Pound and the Nigerian Naira."
Progress in Nigeria
At its peak in June 2023, Nigeria's blocked funds amounted to $850 million, significantly affecting airline operations and finances in the country, IATA said in the release. "Carriers faced difficulties in repatriating revenues in US 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 percent of these funds have been cleared. The remaining $19 million is due to the Central Bank’s ongoing verification of outstanding forward claims filed by the commercial banks."
Willie Walsh, Director General, IATA says: "We commend the new Nigerian government and the Central Bank of Nigeria 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. We are on the right path and urge the government to clear the residual $19 million and continue prioritising aviation."
Murtala Muhammed International Airport, Lagos. (Photos Credit: The Federal Airports Authority of Nigeria)
Eight countries, 87% blocked funds
Eight countries account for 87 percent of the total blocked funds, amounting to $1.6 billion. Leading the list was Pakistan with $411 million, followed by Bangladesh ($320 million) and Algeria ($286 million).
"Pakistan and Bangladesh must release the $731 million in blocked funds immediately to ensure airlines can continue providing essential air connectivity," says Walsh. "In Bangladesh, the solution is in the hands of the Central Bank, which must prioritise aviation’s access to foreign exchange in line with international treaty obligations. The solution in Pakistan is finding efficient alternatives to the system of audit and tax exemption certificates, which cause long processing delays."
