Foreign airlines reveal over $700m funds trapped in Nigeria

Foreign airlines have disclosed that about 90 per cent of their $783m trapped funds have not been unpaid.

The airlines stated this during a stakeholders’ forum convened by the Minister of Aviation and Aerospace Development, Festus Keyamo, in Lagos recently.

According to data from the International Air Transport Association, as of August 2023, Nigeria accounted for a substantial $783m of airlines’ blocked funds.

Despite recent efforts to alleviate the situation, the airlines said a significant portion of those funds remained inaccessible to them.

The Chairman of International Airline Operators, Mr Chima Kingsley, emphasised that while international banks had received some funds from the Central Bank of Nigeria that only accounted for a fraction, less than 10 per cent 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.

President Bola Tinubu two weeks ago had promised to clear the estimated $7bn outstanding foreign exchange obligations of the Federal Government on forex forwards contracts owed to commercial banks.

The CBN had started clearing the forex backlog to commercial banks to ease pressure on the foreign exchange.

The CBN had initiated steps to clear the forex backlog to ease pressure on foreign exchange, but challenges persisted in disbursing the funds effectively.

Domestic carriers, represented by the Chairman of United Nigeria Airlines, Obiora Okonkwo, highlighted their struggles, with trapped funds and limited access to forex impacting their operations.

He cited examples, including aircraft maintenance fees accumulating due to the inability to source forex for payments.