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The International Air Transport Association (IATA) has reported significant progress by the Central Bank of Nigeria (CBN) in resolving the issue of trapped funds for foreign airlines. According to IATA, the CBN has cleared $831 million of these funds since June 2023.
This is positive news for the Nigerian aviation industry, which has been grappling with the issue of airlines being unable to repatriate their earnings in US dollars. At its peak in June 2023, the amount of trapped funds reached $850 million. This had a negative impact on airline operations, with some carriers reducing flights and one even temporarily suspending service in Nigeria.
The IATA Director General, Willie Walsh, commended the Nigerian government and the CBN for their efforts in addressing this issue. He highlighted the importance of access to revenue for maintaining reliable air connectivity, which benefits both Nigerians and the overall economy.
The IATA boss, however, praised the Nigerian government for their efforts in ensuring the successful repatriation of the funds by the international airlines.
He said, “At its peak in June 2023, Nigeria’s blocked funds amounted to $850 million, significantly affecting airline operations and finances in the country. Carriers faced difficulties in repatriating revenues in US dollars, and the high volume of blocked funds led some airlines to reduce their operations and one carrier to temporarily cease operations in Nigeria, which severely impacted the country’s aviation industry. However, as of April 2024, 98 per cent of these funds have been cleared. The remaining $19 million is due to the Central Bank’s ongoing verification of outstanding forward claims filed by the commercial banks.
“We commend the new Nigerian government and the Central Bank of Nigeria for their efforts to resolve this issue. Individual Nigerians and the economy will all benefit from reliable air connectivity for which access to revenues is critical. We are on the right path and urge the government to clear the residual $19 million and continue prioritizing aviation.”
However, IATA also noted that there is still some work to be done. As of April 2024, approximately $19 million remains outstanding. This is due to the CBN’s ongoing verification of claims filed by commercial banks. IATA has urged the government to clear these remaining funds and continue prioritizing the aviation sector.
The successful resolution of this issue will likely lead to improved air travel options for Nigerians. Airlines with repatriated funds are more likely to maintain and even increase their flight operations in the country. This, in turn, could lead to more competitive pricing and a wider range of destinations for travelers.
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