Nigeria, Other African Nations Owe Airlines N366bn, Says IATA

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Chinedu Eze with agency report

The International Air Transport Association (IATA) said the total amount of revenues owed to international carriers by some African countries have risen to N366 billion ($1.2 billion).

This was disclosed by IATA’s Vice President for Africa, Raphale Kuuchi at the on-going aviation conference in Kigali, the Rwandan capital.

According to Reuters, out of the total amount, Nigeria which initially owed international carriers about N183 billion ($600 million) has as at last month liquidated the debt to N67.40 billion ($221 million).

The debts were revenues earned by global airlines in various African countries but were blocked by the government because of the economic crunch, which affected many countries in the continent from 2015. This affected the earnings of most of the commodity exporting countries and even resulted in foreign exchange crisis in some countries.

According to Kucchi, the global commodities price crash that began in 2014 hit economies across Africa hard, particularly big resource exporters such as Angola and Nigeria; so low oil and mineral prices reduced government revenue and caused chronic dollar shortages and immense pressure on local currencies.

He noted that the fiscal slump prevented the government from allowing foreign airlines to repatriate their dollar profits in full.

“To do business effectively, airlines must be able to reliably repatriate their revenues. And that’s not the case in nine African countries: Angola, Algeria, Eritrea, Ethiopia, Libya, Mozambique, Nigeria, Sudan and Zimbabwe,” Kucchi said.

A senior official of IATA in Africa, Adefunke Adeyemi also explained that out of the total of $1.2 billion, Angola has blocked the largest amount, $500 million, while Sudan has held up $200 million.
Nigeria started offsetting its debts to the airlines from late 2016 and does not owe some of the airlines after the October payment.

The economic crises, which gave rise to a historical recession, forced some foreign airlines to stop their services to Nigeria, while many of them cut back their operations by reducing frequencies and changing their operational aircraft to smaller ones.

Iberia and United Airlines left Nigeria early 2016 due to the economic recession while Emirates which cut back its 21 weekly operations to seven has announced it would resume its flights to Abuja and additional flights to Lagos from its hub in Dubai this December.