Lagos, Nigeria – Foreign airlines have disclosed that nearly 90 percent of their trapped funds totaling $783 million in Nigeria have not yet been disbursed. This revelation was made during a stakeholders’ forum convened by the Minister of Aviation and Aerospace Development, Festus Keyamo, in Lagos.
As of August 2023, data from the International Air Transport Association indicated that Nigeria accounted for a substantial $783 million of airlines’ blocked funds. Despite recent efforts to address the situation, the airlines expressed their frustration that a significant portion of these funds remains inaccessible to them.
Bulk of Funds with Nigerian Commercial Banks: Chairman of International Airline Operators, Mr. Chima Kingsley, stressed that although some funds were received by international banks from the Central Bank of Nigeria, this accounted for less than 10 percent of the trapped funds. He pointed out that the majority of the blocked funds are held by Nigerian commercial banks, and these funds have not yet been released.
Government’s Commitment to Address Forex Challenge: Two weeks ago, President Bola Tinubu promised to clear the estimated $7 billion outstanding foreign exchange obligations of the Federal Government on forex forwards contracts owed to commercial banks. The Central Bank of Nigeria (CBN) initiated steps to clear the forex backlog to ease pressure on foreign exchange, but challenges persisted in disbursing the funds effectively.
Struggles of Domestic Carriers: Domestic carriers, represented by the Chairman of United Nigeria Airlines, Obiora Okonkwo, shared their challenges related to trapped funds and limited access to foreign exchange, which have impacted their operations. Examples included accumulating aircraft maintenance fees due to the inability to source forex for payments.
Advocacy for Sector-Specific Support: The Area Manager of West and Central Africa for IATA, Dr. Samson Fatokun, underscored the need to reduce operating costs in the Nigerian aviation sector and advocated for sector-specific support.
Government’s Assurance: Minister Festus Keyamo assured stakeholders that efforts were underway to address the forex challenge. Although he did not disclose the exact disbursement figures, he reiterated the government’s commitment to resolving the issue in the coming weeks, offering a glimmer of hope for the airlines grappling with financial constraints.
The situation surrounding these trapped funds remains a significant concern for foreign and domestic airlines operating in Nigeria, and they eagerly await a resolution to access their blocked funds.