Foreign Airlines’ Trapped Funds in Nigeria Hit N368.9bn, IATA Raises Alarm
- Nigeria has been identified as the world’s most indebted country to foreign airlines
- The total amount of trapped funds belonging to airlines in Nigeria has hit about $802 million
- The International Air Transport Association (IATA) has warned that Nigeria risks destroying the growth of the sector over trapped funds
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The total trapped funds owned by foreign airlines in Nigeria have increased to N368.920 billion, the latest figure released by the International Air Travel Association (IATA) says.
According to the world trade association for airlines, the Nigerian government could hamper international air travel, connectivity, economic growth, and the development of the country’s aviation sector due to the trapped funds now nearing $1 billion.
Source: UGC
Africa accounts for 66% of trapped funds in the world
IATA’s Director-General, Willie Walsh, disclosed this on Monday, March 3, 2023, during the launch of Focus Africa, a novel initiative to strengthen aviation’s contribution to Africa’s growth.
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The project aims to improve connectivity, safety, and reliability for African passengers and shippers.
Walsh said:
“Airlines may be forced to reduce their service in the countries blocking funds; this is a critical issue to airlines and IATA. It is capable of affecting the growth of African aviation.”
IATA chairperson-designate Yvonne Makolo revealed that Nigeria has the highest blocked funds in Africa and the world.
Makolo said the total amount of blocked funds in Africa is about $1.6bn, with Nigeria owing $802 million.
She named Alegria the next country with the most trapped funds in Africa.
Punch report said that IATA’s Regional Vice President for Africa and the Middle East, Kamil Al Awadhi noted that 66% of blocked funds belonging to airlines are in Africa.
Nigeria leads as country with the most trapped funds in the world
He stated that trapped funds are one of the most significant issues affecting the Single African Air Transport Market scheme and stalling the growth of the aviation sector on the continent.
He said:
“Blocked funds is one of the biggest issues that will affect aviation. There has been a 10% increase in blocked funds recently. The total amount of blocked funds is huge. The trapped fund is one of the things we need to address to move forward.”
Per Al Awadhi, IATA had met the Nigerian government in several meetings over the trapped funds, stating that the body would continue discussing the issue with the next government.
Nigeria promises to address the issue, Emirates makes a vow
In March 2023, Hadi Sirika, the Minister of Aviation, stated the government would accelerate action to release the trapped funds.
In August last year, Emirates Airlines stopped its operation in Nigeria, citing the trapped funds as the reason.
Emirates said it would only return to Nigerian airspace if a substantial part of the debt is paid.
Trapped Funds: Foreign airlines begin charging Nigerians in dollars
Legit.ng reported that one of the foreign airlines, Delta Airlines, has already started selling tickets to passengers in Nigeria in US dollars as $551 million belonging to foreign airlines remains trapped in Nigeria.
It was gathered that this was to stop the continuous pilling up of the airline’s trapped funds in the country.
The International Air Transport Association (IATA) said Nigeria is the most indebted country to foreign airlines globally, with $551 million trapped there.
Source: Legit.ng
