LAGOS, Nigeria (VOICE OF NAIJA)-The International Air Transport Association (IATA) has announced that the Central Bank of Nigeria (CBN) has disbursed $831 million in previously trapped funds to foreign airlines since June of last year.
The International Air Transport Association, based in Geneva, Switzerland, stated that this development has increased the total amount of trapped funds for international airlines worldwide to approximately $1.8 billion.
According to IATA, the amount of foreign airlines’ funds trapped in Nigeria peaked at around $850 million last June, but now only $19 million remains outstanding.
The association representing international airlines added that this remaining $19 million is pending verification by the Central Bank of Nigeria through commercial banks.
IATA Director-General Willie Walsh announced this in a statement on Sunday. He also commended the Nigerian government for their efforts in facilitating the successful repatriation of the funds for international airlines.
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He said, “At its peak in June 2023, Nigeria’s blocked funds amounted to $850 million, significantly affecting airline 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 in Nigeria, which severely impacted the country’s aviation industry. However, as of April 2024, 98 per cent 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.
“We commend the new Nigerian government and the Central Bank of Nigeria for their efforts to resolve this issue. Individual Nigerians and the economy will all benefit from reliable air connectivity for which access to revenues is critical. We are on the right path and urge the government to clear the residual $19 million and continue prioritizing aviation.”
Meanwhile, IATA reported a substantial decrease in the amount of airline funds blocked from repatriation by governments. Walsh attributed this reduction primarily to the significant clearance of blocked funds 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,” IATA said.
The statement also highlighted that the situation is more severe in Pakistan and Bangladesh, where a total of $731 million remains blocked. Pakistan is currently withholding $411 million, while Bangladesh is holding $320 million.
The statement further read, “Pakistan and Bangladesh must release the $731m in blocked funds immediately to ensure airlines can continue providing essential air connectivity. In Bangladesh, the solution is in the hands of the Central Bank, which must prioritize aviation’s access to foreign exchange in line with international treaty obligations. The solution in Pakistan is finding efficient alternatives to the system of audit and tax exemption certificates, which cause long processing delays.”