Foreign Airlines Report Over $700 Million Stuck in Nigeria
During a recent stakeholders' forum hosted by the Minister of Aviation and Aerospace Development, Festus Keyamo, foreign airlines revealed that approximately 90 percent of their $783 million in stranded funds have yet to be released.
As of August 2023, data from the International Air Transport Association indicated that Nigeria held a substantial share of $783 million in blocked airline funds.
Despite recent attempts to address the issue, the airlines conveyed that a substantial portion of these funds remained out of their reach.
Mr. Chima Kingsley, the Chairman of International Airline Operators, stressed that although some funds had been received by international banks from the Central Bank of Nigeria, these funds only constituted a small fraction, amounting to less than 10 percent of the funds that are currently immobilized.
He noted, "The majority of the frozen funds are held by Nigerian commercial banks, and the major portion of these funds remains unpaid."
Notably, President Bola Tinubu had pledged two weeks ago to settle the Federal Government's estimated $7 billion outstanding foreign exchange obligations related to forex forward contracts owed to commercial banks.
The Central Bank of Nigeria (CBN) had commenced the process of resolving the forex backlog held by commercial banks, aiming to alleviate the strain on foreign exchange reserves.
Although the CBN had taken steps to address the forex backlog and reduce pressure on the foreign exchange, challenges persisted in the efficient disbursement of these funds.
Domestic airlines, with Obiora Okonkwo, the Chairman of United Nigeria Airlines, as their representative, shared their difficulties, pointing out that the trapped funds and restricted access to forex were adversely affecting their operations.
He provided specific examples, such as the accumulation of aircraft maintenance fees due to the unavailability of forex for payments.
Dr. Samson Fatokun, the Area Manager for West and Central Africa at IATA, stressed the importance of reducing operational expenses within the Nigerian aviation industry and advocated for specialized support for the sector.
In response to these concerns, Minister Keyamo provided reassurance to stakeholders that measures were actively being taken to tackle the forex challenges.
Although the exact disbursement amounts were not disclosed by the minister, he reiterated the government's dedication to resolving the issue in the upcoming weeks, potentially offering a ray of hope for airlines contending with financial limitations.
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