Foreign airlines still have $175m trapped in Nigeria due to foreign exchange scarcity according to IATA

AVIATION regulators have expressed concern that as much as $175m generated from ticket sales by foreign airlines is still trapped in Nigeria and they are unable to repatriate these funds due to prevailing fiscal problems.

Over the last two years, Nigeria has faced a severe cash crunch, leading to a chronic shortage of foreign exchange, leading to many foreign investors unable to repatriate their profits. Airlines were among the hardest hit businesses and despite recent moves to ease restrictions on access to foreign exchange, many of them still have money trapped in Nigeria.

According to the International Air Transport Association (IATA), the Central Bank of Nigeria (CBN) needs to accelerate the process that would give the affected airlines access to their funds. Samson Fatokun, the IATA's area manager South West Africa, said that the situation was impacting negatively on the operations of the affected carriers.

Mr Fatokun added: "Although the CBN has tried to bring the blocked funds from $600m last June to about $175m as of June 2017, a lot could still be done to clean out the entire sum. Nigeria could accelerate the release of the funds as done by some African countries, such as Egypt, where the entire blocked funds have been repatriated.”

According to him, the negative impact of withholding airlines’ funds can have ripple effects on the entire aviation value chain. He added that Iberia and United Airlines pulled out of Nigeria last year because of the same issue, noting that IATA was also worried about the rising airport and air navigational charges, taxes and levies, which had begun to affect the capacity of airlines operating in the country.

Muhammad Albakri, IATA's regional vice president, Africa and Middle East, said more jobs could be created and economic growth achieved in Nigeria and West Africa if governments utilised aviation as a pillar for recovery and national development.