Chinedu Eze
The International Air Transport Association (IATA) has removed Nigeria among the countries that had failed to allow for the repatriation of foreign airlines’ revenue.
This followed the federal government clearance of all revenue backlogs that were due to the foreign airlines earlier in the year.
As at yesterday, the blocked funds globally amounted to $1.7 billion.
In January 2024, the Central Bank of Nigeria (CBN) announced that it had cleared the backlog of pending foreign exchange (forex) obligations to foreign airlines operating in the country. The CBN also said it had disbursed approximately $61.64 million in the last batch of payments to the airlines through various banks, in fulfilment of its commitment to eliminate the forex scarcity in the Deposit Money Banks (DMBs).
The last accruals attributed to Nigeria before the final liquidation was about $800 million.
However, IATA in its report yesterday, on the blocked funds confirmed that $1.7 billion in airline funds were still blocked from repatriation by governments across the world, as of the end of October 2024. This, it noted was a small improvement compared to the $1.8 billion reported at the end of April.
“Over the last six months, we have seen significant reductions in blocked funds in Pakistan, Bangladesh, Algeria and Ethiopia. At the same time, amounts are rising in the XAF[1]/XOF[2] zones and Mozambique. “Bolivia has also emerged as a problem, where repatriating sales revenues is becoming increasingly difficult and unsustainable for airlines.
“This unfortunate game of ‘whack-a-mole’ is unacceptable. Governments must remove all barriers for airlines to repatriate their revenues from ticket sales and other activities in accordance with international agreements and treaty obligations,” IATA’s Director General, Willie Walsh stated.
He also noted that, “No country wants to lose aviation connectivity, which drives economic prosperity. But if airlines cannot repatriate their revenues, they cannot be expected to provide a service.
“Economies will suffer if connectivity collapses. So, it is in everyone’s interest, including governments, to ensure that airlines can repatriate their funds smoothly.”
Nine countries accounted for 83 percent of the airline industry’s blocked funds, amounting to $1.43 billion. These included Pakistan – $311 million for 48 months; XAF Zone – $235 million for 60 months; Bangladesh – $196 million for 47 months; Algeria – $193 million for 24 months; Lebanon – $142 million for 60 months; Mozambique – $127 million for 47 months; Angola – $80 million for 36 months, Eritrea – $75 million for 96 months and XOF Zone, $73 million for 12 months.
IATA pointed out that Pakistan continues to top the list of blocked funds countries at $311 million, remarking that it was an improvement from $411 million in April 2024, noting that the main issue is the system of audit and tax exemption certificates which is causing long processing delays.
The global body also remarked that Bangladesh has seen the amount of blocked funds decrease to $196 million (from $320 million in April) and urged the country’s central bank to continue to prioritise airlines’ access to foreign exchange in line with international treated obligations.
“About $1 billion of airline money blocked from repatriation is in African countries. That is about 59 percent of the global tally.
“Over the last six months, there were significant reductions in blocked funds in Algeria ($193 million from $286 million April) and Ethiopia ($43 million from $149 million in April).
“At the same time, XAF Zone (+$84 million), Mozambique (+$84 million) and XOF Zone (+$73 million) contributed to the largest increases,” IATA stated.
Last modified: December 10, 2024
