For the first time in recent years, Nigeria is out of the list of countries with a significant amount of airlines’ blocked funds as the International Air Transport Association (IATA) report indicated.
Yesterday, the association representing some 340 airlines comprising more than 80% of global air traffic reported that $1.7 billion in airline funds are blocked from repatriation by governments as of the end of October 2024.
It however stated that this is a small improvement compared to the $1.8 billion reported at the end of April.
“Over the last six months, we have seen significant reductions in blocked funds in Pakistan, Bangladesh, Algeria and Ethiopia.
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“At the same time, amounts are rising in the XAF /XOF zones and Mozambique. Bolivia has also emerged as a problem, where repatriating sales revenues is becoming increasingly difficult and unsustainable for airlines.
“This unfortunate game of ‘whack-a-mole’ is unacceptable. Governments must remove all barriers for airlines to repatriate their revenues from ticket sales and other activities in accordance with international agreements and treaty obligations,” said Willie Walsh, IATA’s Director General.
“No country wants to lose aviation connectivity, which drives economic prosperity. But if airlines cannot repatriate their revenues, they cannot be expected to provide a service.
“Economies will suffer if connectivity collapses. So, it is in everyone’s interest, including governments, to ensure that airlines can repatriate their funds smoothly,” said Walsh according to the statement.
IATA stated that nine countries account for 83% of the airline industry’s blocked funds, amounting to $1.43 billion.
However, Nigeria, which featured prominently in the list has been commended for clearing its blocked funds of almost $800m. This was facilitated by the Central Bank of Nigeria (CBN).
According to the release, Pakistan continues to top the list of blocked funds countries at $311 million.
It stated that this is an improvement from $411 million in April 2024. The main issue is the system of audit and tax exemption certificates which is causing long processing delays.
Bangladesh has seen the amount of blocked funds decrease to $196 million (from $320 million in April).
The Central Bank needs to continue to prioritise airlines’ access to foreign exchange in line with international treated obligations, the statement added.
It said about $1 billion of airline money blocked from repatriation is in African countries. That is about 59% of the global tally. Over the last six months, there were significant reductions in blocked funds in Algeria ($193 million from $286 million April) and Ethiopia ($43 million from $149 million in April). At the same time, XAF Zone (+$84 million), Mozambique (+$84 million) and XOF Zone (+$73 million) contributed to the largest increases.
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