Chinedu Eze with agency report
The International Air Transport Association (IATA) said it has recovered all the blocked revenues of international airlines from African countries.
Many African nations that rely on oil revenue for their foreign exchange sourced had experienced a hit when the prices of oil nosedived in the international market and they were unable to pay foreign airlines their revenues in dollars.
Nigeria was able to finalise the payment of these foreign airlines in March this year, which rose to a total of $600 million, while some countries in the region like Egypt and Angola still owed the airlines till recently.
According to IATA the total amount of the blocked fund was $5 billion and late last year African nations still owed foreign airlines about $1 billion in blocked funds.
“These countries were overly dependent on natural resources for a substantial portion of their revenue, and they were dependent on imported products to sustain their own economies,” said IATA’s vice president for Afric, Raphael Kuuchi, said.
He said progress was being made, as Nigeria and Egypt have cleared all blocked funds, while Angola has reduced the amount it owes to airlines to around $250 million, from $580 million.
“There is definitely still a lot of work to be done. During my last visit to Angola, I received assurance that the government was going to clear the remainder of the blocked funds by the end of August,” said Kuuchi.
“From just under $1 billion, today we stand at around $500 million in funds blocked across Africa.”
That includes $180 million still locked up in Sudan, $100 million in Zimbabwe, $40 million each for Algeria and Ethiopia, $29 million in Libya, and $11 million in both Mozambique and the Central African Republic.
IATA attributed the progress being made to a number of factors, which include the rise in commodity prices improving foreign exchange earnings for countries, carriers have used the ‘stick’ of reduced capacity and frequencies to spur action.
“Some airlines have gone ahead and cut back, because they could not continue to sustain operations without getting funds out of the country.
“But governments are now realising that air transport is critical to their economies,” said Kuuchi.
The international organisation said education and diplomacy have also been part of the solution and that forex challenges also affected the economy of each country, especially their domestic airlines.
“We had to point out that even their own airlines flying into foreign airports incur costs in foreign currency,” “If they have to maintain aircraft outside their country, they need foreign currency. If they need spare parts, they need foreign currency,” Kuuchi said.