The International Air Transport Association, IATA has announced that the Central Bank of Nigeria has released international airlines’ stuck funds totaling $831 million from June of last year to date.
The IATA, based in Geneva, Switzerland, stated that the development has increased the global imprisoned money of international airlines to $1.8 billion.
According to IATA, barely $19 million of foreign airlines’ funds in Nigeria remain outstanding since the height of over $850 million in June.
The association representing international airlines stated that the remaining $19 million was pending CBN certification through commercial banks.
The Director-General of IATA, Willie Walsh, announced this in a statement on Sunday.
The IATA boss, however, praised the Nigerian government for their efforts in ensuring the successful repatriation of the funds by the international airlines.
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 also announced a significant decrease in the amount of airline funds blocked from repatriation by governments.
Walsh said the major reason for the reduction was a significant clearance of funds blocked 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 further stated that the situation was more severe in Pakistan and Bangladesh with the continuous blocking of $731m; Pakistan is currently withholding $411m and Bangladesh withholding $320m.
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.”
The shortage of forex in the country had led to significant airlines blocking funds in Nigeria. The new CBN administration has however cleared the funds.