Nigeria Clears 98% of Airlines’ Blocked Funds

Nigeria has emerged as a noteworthy example in the repatriation of revenue from international airlines operating within its borders. At its peak in June 2023, blocked funds in Nigeria totaled $850 million, significantly impacting airline operations and finances. However, by April 2024, an impressive 98% of these funds have been released.

Despite this progress, airlines still faced challenges due to the devaluation of the Nigerian naira. Kamil Al-Awadhi, Vice President of the International Air Transport Association (IATA) for Africa and the Middle East, highlighted this during the IATA’s general meeting in Dubai from June 2 to 4, 2024.

Kamil Al-Awadhi expressed optimism. According to IATA, which represents over 330 members, the remaining $19 million is expected to be released soon. The blockage in Nigeria is due to the ongoing verification by the Central Bank of claims filed by commercial banks.

“We’ve done relatively really well with Nigeria. So, it kicked off in May last year when the new government stepped in. It has been extremely active, very engaged with the industry. So thankfully today we can actually close the Nigerian chapter,” added Kamil Al-Awadhi, “We’ve made significant strides with Nigeria. The government’s active engagement with the industry allows us to close this chapter.”

Willie Walsh, Director General of IATA, commended Nigeria’s efforts and emphasized the importance of reliable air connectivity. “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,” he said.

Previously, Nigeria struggled with repatriation restrictions, leading some airlines to reduce operations. Even Emirates temporarily suspended flights to Nigeria. However, the carrier plans to resume operations on October 1.

Nigeria’s collaboration with Egypt has contributed to a 28% reduction in globally blocked funds, totaling $1.8 billion as of April 2024. Yet challenges persist in other African countries, including Algeria, CFA franc zone nations, Ethiopia, Eritrea, and Zimbabwe.

Walsh emphasized that efficient revenue repatriation is essential for airlines operating on thin margins. Access to rightfully earned revenues ensures critical connectivity and sustainable business operations.

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Victor Shalton

Victor Shalton's love for aviation can be traced to when he was 11-years-old. As a seasoned aviation writer, he takes pride in providing the best aviation coverage around the globe and is passionate about advancing his skills in the aviation space. In addition, he loves travelling, writing, arts and while his speaking engagements have taken him around the world, he is proud to call Nairobi home.

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