The International Air Transport Association (IATA) has welcomed a decision by the Nigerian government to release 265 M USD of airlines blocked funds .
Regional Vice President for Africa and Asia ,Mr. Kamil Alawadhi, said that IATA will continue to engage with the Nigerian government on expediting the release of the remaining amount, so that airlines can continue providing the connectivity Nigeria requires without disrupting and harming its economy and jobs.
“We encourage other countries, in Africa and elsewhere, that are blocking the repatriation of foreign airlines’ funds, to follow Nigeria’s example and release the money they are withholding. Without it, airlines cannot afford to serve those countries. This would be detrimental to the people and businesses that depend on the market connectivity those airlines provide.
IATA speaks and leads the industry on matters of common interest. While IATA cannot speak for individual airlines, we hope the release of blocked funds with assurances and safeguards to prevent a recurrence, will persuade affected carriers to continue serving Nigeria,” Kamil Alawadhi stated .
Dubai’s Emirates announced this month that it would suspend flights to Nigeria from next month over an inability to repatriate funds from Africa’s most populous nation..
The decision highlighted the deadlock faced by international carriers that fly to Nigeria and other African countries where governments are not willing to release foreign currency in income and profits earned -in the long run crippling operations.
In the case of Nigeria ,its government has restricted access to foreign currency for imports and for investors seeking to repatriate their profits due to a shortage of dollars. Nigeria gets about 90% of its foreign exchange from oil, but is struggling to produce due to pipeline theft and years of under-investment.
At the recently conluded IATA AGM in Doha Qatar ,Mr. Alawadhi told the media that IATA was moving strongly to urge government to release the blocked funds for airlines to free up resources that can boost the quick recovery of the industry in Africa where operators are struggling due to limited or no access to their operation revenues .
Blocked funds refer to the money that airlines have difficulties repatriating from some countries because of governments foreign exchange controls.
“A financially viable air transport sector supports jobs and must be a driving force for Africa and the Middle East economic recovery from COVID-19. A priority is releasing blocked funds, the IATA VP stated .
As of April, globally, there is a total $1.6 billion in funds blocked by 20 countries worldwide. Of this, 67% is blocked in Africa for a total of $1 billion, tied up in 12 African countries. Nigeria alone is holding back $464 million. It is the most amount blocked by any single African country, and the amount is rising every week.
Editor’snotes:
Even after this welcome and sizeable release, there will still be more than $200m of airlines funds blocked in Nigeria.
As previously reported by IATA, the following other African countries continue to block airlines’ funds: Zimbabwe ($100m) Algeria ($96m) Eritrea ($79m) Ethiopia ($75m)
