Foreign airlines operating in Nigeria have disclosed that a staggering $700 million of their revenue remains inaccessible, trapped within the country’s financial system.
This alarming situation was brought to light at a recent stakeholders’ forum convened by the Minister of Aviation and Aerospace Development, Festus Keyamo, in Lagos.
The International Air Transport Association’s (IATA) data reveals that Nigeria accounts for a significant $783 million of airlines’ blocked funds as of August 2023.
Despite concerted efforts to alleviate the situation, the airlines lament that a substantial portion of these funds remains frozen.
The Chairman of International Airline Operators, Mr. Chima Kingsley, said that less than 10% of the trapped funds have been released by the Central Bank of Nigeria (CBN) to international banks.
“The majority of the blocked funds are held by Nigerian commercial banks. The bulk of the money has not been paid,” he stated.
Domestic carriers are also feeling the pinch. The Chairman of United Nigeria Airlines, Obiora Okonkwo, noted the impact of the trapped funds and limited access to forex on their operations.
He cited instances of accumulating aircraft maintenance fees due to the inability to source forex for payments.
Dr. Samson Fatokun, the Area Manager of West and Central Africa for IATA, called for a reduction in operating costs in the Nigerian aviation sector and advocated for sector-specific support.
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In response to these concerns, Minister Keyamo assured stakeholders that the government is actively working to address the forex challenge. While specific disbursement figures were not disclosed, the minister reiterated the government’s commitment to resolving the issue in the coming weeks, offering a beacon of hope for the airlines grappling with these financial constraints.