Nigeria Accounts For 35% Of Foreign Airlines’ Trapped Funds Globally

Nigeria Accounts For 35% Of Foreign Airlines’ Trapped Funds Globally

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The International Air Transport Association (IATA) said airlines’ funds blocked from repatriation in Nigeria is $812.2 million as of April 2023.

According to the association, Nigeria has the highest airline funds blocked from repatriation (35.7%) when compared to other countries where airlines are struggling to repatriate their revenue. 

Airlines’ trapped funds globally have increased to $2.27 billion in April, which is a 47% rise from $1.55 billion recorded during the same month in 2022. 

Nigeria leads the list of countries with the highest airlines funds blocked from repatriation, which also has Bangladesh, Algeria, Pakistan and Lebanon. 

In a statement by IATA on Sunday, 4 June, there’s a wide gap between Nigeria and the country that comes next on the list, Bangladesh, where $214.1 million is trapped. 

Also on the list is Algeria with $196.3 million, Pakistan withheld $188.2 million, and Lebanon accounts for $141.2 million of the total trapped funds. 

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These countries account for 68% of the airlines’ funds blocked from repatriation, which IATA says frustrates the continuous operation of foreign airlines. 

The director-general of IATA, Willie Walsh, said: “Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets. 

“Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity and job creation.” 

What you need to know 

Recall that foreign airlines had protested their trapped funds in Nigeria, threatening to shut down operations until they were allowed to repatriate the money. 

Foreign airlines’ funds are trapped in Nigeria due to foreign exchange scarcity in the official market, which has forced the Central Bank of Nigeria (CBN) to ration forex.

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International airlines are unable to change their revenue in the black market due to the high cost of the dollar rate, as a result, they are dependent on when the CBN decides to release funds to them. 

Although, President Bola Tinubu, during his inauguration speech last week Monday, promised investors that his administration will ensure they are able to repatriate their funds, a promise that is meant to spur foreign investments in Nigeria.

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