The International Air Transport Association (IATA) has disclosed that foreign airlines’ trapped fund in Nigeria has increased to $802 million.
Prime Business Africa previously reported five months ago that the trapped fund was $700 million, rising from $464 million disclosed in July 2022.
Nigeria has the highest blocked funds in Africa, according to the global airline group, accounting for $802 million out of the continent’s $1.6 billion.
The trapped fund is the ticket sales of foreign airlines operating in Nigeria, which they are unable to repatriate due to shortage of Dollars in the country.
According to the Director-General of IATA, Willie Walsh, with the trapped fund hitting $802 million, Airlines will be forced to reduce their service in the countries where they are unable to repatriate their revenue.
Walsh said the blocked fund will affect air connectivity, and impede economic growth, as well as the development of the aviation sector in the country.
“Airlines may be forced to reduce their service in the countries blocking funds; this is a very important issue to airlines and IATA. It is capable of affecting the growth of African aviation,” Walsh said earlier this week at the launch of “Focus Africa”, an initiative created to boost aviation’s contribution to Africa’s economic and social development.
Also, the Regional Vice President for Africa & Middle East, IATA, Kamil Al Awadhi, said Africa accounts for 66 per cent of the trapped fund in the world.
Awadhi lamented the impact the blocked fund will have on the continent’s growth, stating: “Blocked funds is one of the biggest issues that will affect aviation. There has been a 10 per cent increase in blocked funds recently. The total amount of blocked funds is huge. This is one of the things we need to address to move forward.”
Meanwhile, IATA also disclosed that it estimates Africa’s aviation sector will lose $213 million in 2023, after suffering a combined loss of $3.5 billion during the 2020-2022 financial years.