Forex crunch: Nigeria traps $450m foreign airline revenue
The International Air Transport Association (IATA) has declared that Nigeria is leading other African countries that trapped about one billion dollars earned by mainly foreign international airline operators in the continent.
The association calculated that African countries collectively owe international airlines operating in the continent some significant $1.0 billion of revenues, with Nigeria being the only country where the value of blocked funds has risen.
According to the figures released by IATA, Nigeria which is facing acute foreign exchange crunch and associated devaluation of local Naira currency, currently withholds princely $450 million or N225 billion in revenue earned by international carriers operating in the country.
The $450 million, the largest amount withheld by any African nation, in May was 12.5% higher than the previous month.
Algeria, Ethiopia and Zimbabwe, who combined are withholding $271 million from foreign airlines, in May marginally paid down what they owed. Eritrea was unchanged at $75 million, IATA said.
IATA’s Vice President for Africa and the Middle East, Kamal Al Awadhi said it has proved very difficult to convince the federal government to release the funds.
Africa’s largest economy has restricted access to foreign currency for imports and for investors seeking to repatriate their profits as the nation tackles a severe dollar shortage.
Al Awadhi described talks with Nigerian officials to release the funds as a “hectic ride.”
“We keep chipping away and hoping that it clicks that this is going to going to damage the country down the road,” he told reporters in Doha on the eve of IATA’s annual meeting of airline chiefs there this week.
Al Awadhi, a former chief executive of Kuwait Airways, said Nigerian officials had blamed the foreign currency shortage for not repatriating the airline revenue.
The Central Bank spokesperson in Nigeria did not immediately respond to a request for comment.
Nigeria has previously blocked revenue from foreign airlines before later repatriating the funds.
IATA has so far had held two rounds of talks with Nigerian officials, including from the Central Bank, who Al Awadhi said were “not responsive” to releasing cash.
Another round of talks between IATA and Nigerian officials is expected to start soon, the airline lobby group said, without specifying when.
“Hopefully, we can get some sort of solution where it starts going down (but) it won’t, I doubt, be paid in a single shot,” Al Awadhi said.
