Nigeria clears 98% of blocked airline funds, says IATA

The International Air Transport Association (IATA) has welcomed Nigeria’s release of 98% of blocked airline funds.

As recently as June 2023, some $850m of airline funds were stranded in the country as a result of the country’s restrictive currency policies, making it impossible for international airlines to repatriate profits.

But just $19m of blocked funds remains due to the Central Bank’s ongoing verification of outstanding forward claims filed by the commercial banks. The Bank, in cooperation with the government of President Bola Tinubu, has helped to facilitate airlines’ access to their funds, according to the IATA.

“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 prioritising aviation,” said Willie Walsh, IATA’s director general.

The high volume of blocked funds had led some airlines to reduce their operations, which severely impacted the country’s aviation industry. Emirates said in August 2022 that it would suspend all flights to and from Nigeria, citing its inability to repatriate funds from the country, then led by President Muhammadu Buhari.

In a letter sent to the government on 22 July 2022, Emirates said that it had $85m stuck in the country as of that month, a figure that had been rising by $10m per month.

With the funds cleared, the company’s services in Nigeria are now set to resume on 1 October 2024 following a deal between the governments of Nigeria and the UAE.

A continent-wide issue

Blocked airline funds remain a major issue beyond Nigeria.

In Africa as a whole, IATA reported a reduction of $708m in blocked funds (28%) since December 2023, but continent-wide total blocked funds still stood at approximately $1.8bn at the end of April.

Algeria, Ethiopia, Eritrea, Zimbabwe, and states which use the Central African franc, are responsible for 40.56% of the blocked funds, according to IATA.

“The reduction in blocked funds is a positive development. The remaining $1.8bn, however, is significant and must be urgently addressed. The efficient repatriation of airline revenues is guaranteed in bilateral agreements. Even more importantly, it is a prerequisite for airlines—who operate on thin margins—to be able to provide economically critical connectivity. No business can operate long-term without access to rightfully earned revenues,” said Walsh.