Over $700m remaining trapped fund in Nigeria is inaccessible – Foreign Airlines
NIGERIA, Nov. 8 – The challenge of Foreign airlines in Nigeria is yet to be resolved as operators disclosed that about 90 % of their $783m trapped funds in the country have not been paid.
This was made public by the airlines during a stakeholders’ forum convened by Festus Keyamo, Nigeria’s Minister of Aviation and Aerospace Development, in Lagos recently.
Following the data from the International Air Transport Association (IATA), as of August 2023, Nigeria accounted for a significant value of airlines’ blocked funds amounting to $783m .
Not withstanding recent moves to salvage the situation, the airlines said they could not access significant amount of those funds.
Emphasizing on the situation, the Chairman of International Airline Operators, Mr Chima Kingsley, said while international banks had received some funds from the Central Bank of Nigeria that only accounted for a fraction, less than 10 % of the trapped funds.
“The bulk of the blocked funds are with Nigerian commercial banks. The bulk of the money has not been paid,” he said.
Two weeks ago, President Bola Tinubu had promised to clear the estimated $7bn outstanding foreign exchange obligations of the Federal Government on FX forwards contracts owed to commercial banks.
It was reported that the CBN had started clearing the forex backlog to commercial banks to ease pressure on the foreign exchange.
The CBN had instituted a process to clear the backlog of forex to ease pressure on foreign exchange, but challenges persisted in disbursing the funds effectively.
Representative of Domestic airlines, Obiora Okonkwo, whos is the Chairman of United Nigeria Airlines, highlighted their struggles, with trapped funds and and how limited access to forex has impacted their operations.
He cited instances, including aircraft maintenance fees accumulating due to the inability to source forex for payments.
Dr Samson Fatokun, who is the Area Manager of West and Central Africa for IATA, underscored the need to bring down operating costs in the Nigerian aviation sector, advocating for sector-specific support.
The Minister however assured stakeholders that efforts were underway to address the challenges of forex and the consequential effect on airline operations.
Offering a glimmer of hope for the airlines struggling with financial constraints, Keyamo, though did not disclose the exact disbursement figures, he reiterated the government’s readiness to resolving the issue in the coming weeks.
