The Central Bank of Nigeria (CBN) has been cautioned by the International Air Travel Association, (IATA), regarding the potential departure of certain foreign airlines from the Nigerian markets.
The IATA regional vice-president for Africa & Middle-East, Kamil Alawadhi, conveyed this message during a media presentation held with African journalists at the IATA Global Media Day in Geneva, Switzerland.
This warning stems from the existing challenge of $792 million in ticket revenue currently inaccessible within the country. The IATA urged the Nigerian government to expedite actions on the funds It added that the high operating cost in Nigeria makes it challenging for airlines to achieve profitability
The global trade association for airlines had earlier called out Nigeria and other African nations for their reluctance to permit international airlines to repatriate their profits, amounting to an estimated $1.68 billion.
Alawadhi highlighted that despite the inadequate infrastructure, Lagos and Abuja airports have been identified as the most expensive gateways in the region. According to reports, he mentioned that presently, the Nigerian government holds the largest sum of airline-impounded funds.
Addressing the issue of blocked funds, the IATA vice-president highlighted Nigeria as the nation with the highest amount of blocked funds from airlines, totalling $792 million.
Following Nigeria, other countries with substantial amounts include Egypt with $348 million, Algeria with $199 million, the AFI zone with $183 million, and Ethiopia with $128 million. Ethiopia has devised a plan to settle its debt, whereas Nigeria has not taken any step. However, in September, President Bola Tinubu directed the CBN to facilitate quarterly meetings with foreign airlines, aiming to tackle the backlog of funds held by these airlines.
Regarding the aviation landscape in Nigeria, the head of IATA expressed concern, citing challenges such as a 25% interest rate on loans, elevated airport taxes, and insurance premiums six times higher than the global average. Amid foreign airlines seeking the repatriation of their trapped funds, a minimum of four local airlines possess funds surpassing $54 million currently held within the CBN.
