In a gathering convened by the Minister of Aviation and Aerospace Development, Festus Keyamo, foreign airlines operating in Nigeria disclosed that a significant portion of their $783 million in trapped funds remains unpaid, making it difficult for them to operate effectively in the country.
As of August 2023, Nigeria accounted for a substantial $783 million of airlines’ blocked funds, according to data from the International Air Transport Association. Despite recent efforts to alleviate the situation, foreign airlines are still grappling with financial constraints.
Mr. Chima Kingsley, Chairman of International Airline Operators, highlighted that while some funds were received by international banks from the Central Bank of Nigeria, these payments accounted for less than 10 percent of the trapped funds. The majority of the blocked funds, he emphasized, are with Nigerian commercial banks, and these have yet to be paid.
Efforts to address this issue have been ongoing, with President Bola Tinubu promising two weeks ago to clear the estimated $7 billion outstanding foreign exchange obligations of the Federal Government on forex forwards contracts owed to commercial banks.
The Central Bank of Nigeria (CBN) had initiated steps to clear the forex backlog to commercial banks, aiming to ease pressure on the foreign exchange market. However, challenges persist in disbursing the funds effectively.
Domestic carriers, represented by the Chairman of United Nigeria Airlines, Obiora Okonkwo, are also facing struggles due to trapped funds and limited access to forex, impacting their operations. Okonkwo cited examples of accumulating aircraft maintenance fees, a result of their inability to source forex for payments.
Dr. Samson Fatokun, the Area Manager of West and Central Africa for IATA, emphasized the need to reduce operating costs in the Nigerian aviation sector and advocated for sector-specific support to address the challenges faced by airlines.
Minister Festus Keyamo assured stakeholders that efforts were underway to address the forex challenge. While he did not disclose the exact disbursement figures, he reiterated the government’s commitment to resolving the issue in the coming weeks, offering hope to the airlines grappling with financial constraints.
The situation remains a critical concern for foreign and domestic airlines operating in Nigeria, as the trapped funds have significant implications for their operations and the overall aviation industry in the country.
Do you want to share a story with us? Do you want to advertise with us? Do you need publicity for a product, service, or event? Contact us on WhatsApp +2348183319097 Email: firstname.lastname@example.org