Nigeria Clears 98% of Airlines’ Trapped Funds, Owes $19m

June 2, 2024
foreign airlines

By Adedapo Adesanya

The International Air Transport Association (IATA) has confirmed that about 98 per cent of airlines’ trapped funds in Nigeria have been successfully repatriated by the international airlines after years of struggle.

The Director-General of IATA, Mr Willie Walsh, announced this in a statement on Sunday and praised the government for its efforts in ensuring the repatriation.

Mr Walsh noted that as of June 2023, Nigeria had blocked funds totalling $850 million, which had a considerable impact on the operations and financial health of airlines operating there.

He explained that 98 per cent of the $850 million had been paid while the sum of $19 million, representing about 2 per cent of the funds, is still outstanding.

“At its peak in June 2023, Nigeria’s blocked funds amounted to $850 million, significantly affecting airline operations and finances in the country.

“Carriers faced difficulties in repatriating revenues in U.S. dollars, and the high volume of blocked funds led some airlines to reduce their operations and one carrier to temporarily cease operations to Nigeria, which severely impacted the country’s aviation industry.

“However, as of April 2024, 98% of these funds have been cleared. The remaining $19 million is due to the Central Bank of Nigeria’s ongoing verification of outstanding forward claims filed by the commercial banks.

“We commend the new Nigerian government and the CBN for their efforts to resolve this issue.

“Individual Nigerians and the economy will all benefit from reliable air connectivity for which access to revenues is critical,” Mr Walsh said in the statement seen by Business Post.

The development comes on the back of the CBN’s effort to clear a $7 billion FX backlog and stabilize the exchange rate.

In January 2024, the CBN disbursed $61.64 million to foreign airlines through various deposit money banks. In the same month, the apex bank released $500 million to various sectors to address the backlog of verified foreign exchange transactions.

In February 2024, the Governor of the Central Bank of Nigeria, Mr Yemi Cardoso announced that the FX backlog had dropped to $2.2 billion.

Then, in March, he announced that all valid FX backlogs had been settled by the country.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

Leave a Reply

Nigeria OPEC
Previous Story

OPEC+ Extends Oil Production Cuts Into 2025

Minimum Wage Structure
Next Story

Minimum Wage: NASS Engages Labour Leaders Over Planned Strike

Latest from Travel/Tourism