Nigeria becomes the highest aviation debtor owing foreign airlines $551m in blocked funds

NIGERIA has been officially declared as the biggest debtor in the foreign airlines by the International Air Transport Association (IATA) after it emerged that the country owes carriers about $551m in blocked funds.

 

As a result of the scarcity of foreign exchange in Nigeria, huge sums belonging to over 20 foreign airlines has been held in the country since the beginning of the year. Because they are unable to convert their earnings from naira into dollars due to the dollar scarcity the Central Bank of Nigeria (CBN) is currently witnessing, these airlines are unable to repatriate their funds to their home countries.

 

In its latest statement on the matter, the IATA, the global clearing house for over 300 airlines, tagged Nigeria as the biggest debtor when it comes to blocked funds around the world. It confirmed that the blocked funds had risen by more than 25% over the last six months, warning that the continued withholding of the money will cause serious financial consequences to the economies of the indebted nations.

 

IATA director-general Willie Walsh, said: “Preventing airlines from repatriating funds may appear to be an easy way to shore up depleted treasuries but ultimately the local economy will pay a high price. No business can sustain providing service if they cannot get paid and this is no different for airlines.

 

"Air links are a vital economic catalyst. Enabling the efficient repatriation of revenues is critical for any economy to remain globally connected to markets and supply chains.”

 

According to the latest update given by IATA, Nigeria topped the list of the highest indebted countries with $551m followed by Pakistan with $225n. Following closely, the other three highest debtor countries are Bangladesh with $208m, Lebanon with $144m and Algeria with $140m.

 

While calling on governments of the countries affected, the IATA boss urged the indebted countries to remove all barriers to airlines repatriating their revenues from ticket sales and other activities in line with international agreements and treaty obligations. In total, the aviation industry is said to be owed $2bn by countries blocking their funds.

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