Foreign airlines’ trapped funds in Africa hit a record $1.68 billion by the end of September 2023 with Nigeria topping the list of debtors, the International Air Transport Association (IATA) has revealed.
Other countries holding airlines’ funds are Ghana, Nigeria, Ethiopia, Angola and Zimbabwe.
IATA attributed trapped funds as one of the major issues mitigating against sustainable aviation development in Africa and impairing seamless connectivity.
IATA’s Regional Vice-President of Africa and Middle East, Kamil Al Alwadi gave the revelations in his remarks at the African Airlines Association (AFRAA) 55th Annual General Meeting (AGM) in Entebbe, Uganda said since 2018.
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Daily Trust reports that more than half of the money is said to be trapped in Nigeria with foreign airlines unable to repatriate their proceeds from sale of tickets due to the current foreign exchange challenges in the country.
The Central Bank of Nigeria (CBN) recently commenced a move to clear forex backlogs to banks and foreign airlines but the substantial part of the money is yet to be redeemed.
Minister of Aviation and Aerospace Development, Mr. Festus Keyamo recently assured that President Bola Tinubu had given a marching order to the CBN to prioritise foreign airlines’ trapped funds.
IATA Senior Official speaking at the gathering of aviation players said, “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.”
“Nigeria has the two most expensive airports in Africa namely; Abuja and Lagos at $100 per passenger compared to the two most expensive airports in the GCC (Gulf Cooperation Countries); Doha ($44) and Dubai ($40) yet the infrastructure is not comparable,” he added.