The International Air Transport Association (IATA) announced wednesday that over $175 million accruing from ticket sales by foreign airlines is still trapped in Nigeria due to inadequate foreign exchange.
This is down from $575 million by May last year because the Central Bank of Nigeria (CBN) started offloading the trapped funds to the airlines at the beginning of this year when revenues from oil sales received a boost due to increase in crude oil prices.
However, IATA said non-remittance of such funds was having negative impact on the operations of the affected carriers, as the blocked funds constitute operating costs for the airlines.
It was the inability to repatriate their earnings that forced Iberia and United Airlines to stop their operations to Nigeria and forced other international operations to cut down their capacity in their service to Nigerian destinations.
Speaking at a briefing in Lagos, IATA Area Manager, South West Africa, Samson Fatokun, urged CBN to accelerate the process that could enable the affected airlines access the blocked funds to ease their business.
Fatokun said though the CBN has tried to bring the blocked funds from $ 600 million last June to about $175 million as at June 2017, a lot could still be done to clean out the entire sum.
He said Nigeria could accelerate the release of the funds as done by some African countries, including Egypt where the entire blocked funds have been released, noting that the negative impact of withholding airlines funds could have ripple effects on the entire aviation value chain.
He said Iberia and United Airlines pulled out of Nigeria last year because of issues bordering on blocked funds.
He said IATA was worried over rising airport and air navigational charges, taxes and levies which are affecting the capacity of airlines in Nigeria, but said IATA would continue to engage aviation authorities, governments and regulators on how to achieve a win-win situation to enable air travel serve as a catalyst for economic growth in Nigeria and other states in Africa.
Also, speaking at the conference, IATA Regional Vice President, Africa and Middle East, Muhammad Ali Albakri, said more jobs could be created and economic growth achieved in Nigeria and West Africa if governments utilise aviation as a pillar of economic recovery and national development.
Albakri said he was in Nigeria to have series of meetings with stakeholders on modalities to move the sector forward, remarking that although Nigerian government is doing enough to accelerate aviation growth, it needs to strengthen the framework for regulation, safety and airports infrastructure upgrade.