Nigeria tops list as airlines’ trapped funds in Africa hit $1.68 billion

According to the International Air Transport Association (IATA), the total amount held by African countries by September 2023 amounted to $1.68 billion. Apart from Nigeria, the other countries include Ghana, Ethiopia, Angola and Zimbabwe.

While speaking during the IATA African Airlines Association (AFRAA) 55th Annual General Meeting (AGM) in Entebbe, Uganda, IATA’s Regional Vice-President of Africa and Middle East, Kamil Al Alwadi said sustainable development of aviation in Africa has greatly been impeded by the increasing trapped funds. 

The IATA chief further said that since 2018, the association has been able to retrieve a significant amount of blocked funds from the affected countries through working with the respective governments.

“Aviation is capital intensive. Cash flow is key for airlines’ business sustainability – when airlines are not able to repatriate their funds, it severely impacts their operations and their decisions on where to fly.

“But the risk of blocked funds is not just limited to airlines; the negative impact extends to the countries blocking the funds. It impacts the country’s economy and its connectivity, and it hurts investor confidence and reputation. Aviation is not only an economic enabler; it is a pillar of modern economies”, the IATA chief said.

The Nigerian government, led by President Bola Tinubu has initiated moves which include high-level meetings with the nation’s top bank, the Central Bank of Nigeria (CBN) to clear forex backlogs to banks and foreign airlines.

This was recently confirmed by the Minister of Aviation and Aerospace Development, Festus Keyamo who has given assurance that the federal government will prioritise repayment of foreign airlines’ trapped funds.

Nigeria as of June 2023, accounted for $812.2 million of airlines’ blocked funds making it the highest in Africa. 

The amount was reduced by about $29.2 million as of September according to data released by the IATA as the amount reduced to $783 million.