Nigeria Foreign Airlines’ Trap Funds

International Air Transport Association (IATA) statistics show that the total amount of foreign airlines’ funds trapped in Nigeria has doubled from $147 million (N61 billion) in August 2021 to $283 million (about N117.6 billion) as at now.

In line with the bilateral air service agreements (BASAs) with countries, airline tickets are mostly sold in naira while the airlines would repatriate the funds in dollars through the country’s central bank.

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The federal government cleared $600m of blocked funds in 2018 under Muhammadu Buhari’s administration, but the amount continued to rise as IATA lamented the blockade.

The Minister of Aviation, Senator Hadi Sirika, confirmed the new figure of $283m when he spoke in Lagos during the commissioning of the Murtala Muhammed International Airport (MMIA) New terminal.

He said, “Mr President, the aviation business suffers from issues of access to foreign exchange by local and foreign airlines and the ability to repatriate blocked funds.

“Nigeria currently holds $283m of foreign airlines funds blocked in the country. I would like to humbly request the support of the Central Bank of Nigeria, through the directive of Mr President, to prioritize access to forex for all carriers both local and foreign and to work out a mechanism to clear the existing backlog urgently and prevent subsequent build up.”

According to report, money accumulated from ticket sales by about 30 airlines flying into the country.

Willie Walsh, IATA’s Director General, had recently reported on the blockade of airline revenues “contravenes international conventions and could slow the recovery of travel and tourism in affected markets as the airline industry struggles to recover from the COVID-19 crisis.”