International Air Transport Association IATA, has said that $450 million foreign airline revenue is trapped in Nigeria as the Central Bank of Nigeria CBN could not provide the needed foreign exchange to transfer the money out of the country. Nigeria financial system has in recent month been faced with dollar shortages that even Nigerians holding Naira debit card can not purchase more than $50 worth of goods or service online in a month. Nigeria IATA said is withholding $450 million in revenue international carriers operating in the country have earned, an executive at the world’s largest airlines association said on Sunday.
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. The International Air Transport Association’s Vice President for Africa and the Middle East, Kamal 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.
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. IATA says $1 billion of revenue belonging to foreign airlines is being withheld across Africa, although Nigeria is the only country where the value of blocked funds has risen.
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.
