IATA: 98% of trapped airlines’ funds cleared in Nigeria — $19m remaining

The International Air Transport Association (IATA) says 98 percent of trapped airlines’ funds has been cleared in Nigeria.

Willie Walsh, IATA’s director-general, disclosed this in a statement on Sunday.

At its peak in June 2023, Walsh said, Nigeria’s blocked funds amounted to $850 million, significantly affecting airlines’ operations and finances in the country.

“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,” he said.

“However, as of April 2024, 98% 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.”

Walsh lauded the current Nigerian government and the Central Bank of Nigeria (CBN) for their efforts to resolve the issue.

According to the IATA director-general, individual Nigerians and the economy will all benefit from reliable air connectivity for which access to revenues is essential.

“We are on the right path and urge the government to clear the residual $19 million and continue prioritizing aviation,” he said.

‘BLOCKED FUNDS BY GOVERNMENTS DECREASED BY 28%’

According to IATA, airline funds blocked from repatriation by governments decreased by 28 percent.

The body said the total blocked funds at the end of April stood at about $1.8 billion — a decrease of $708 million (28 percent) since December 2023.

According to IATA, the main reason for the reduction was 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,” the trade association said.

Walsh also described the reduction in blocked funds as a positive progress.

“The remaining $1.8 billion, however, is significant and must be urgently addressed. The efficient repatriation of airline revenues is guaranteed in bilateral agreements,” he said.

“Even more importantly, it is a pre-requisite for airlines—who operate on thin margins—to be able to provide economically critical connectivity. No business can operate long-term without access to rightfully earned revenues.”

On March 20, the CBN said it had successfully settled all outstanding FX obligations.