NEWS

FG Clears $831m In Trapped Funds For Foreign Airlines

 

 

The International Air Transport Association (IATA) has confirmed that the Central Bank of Nigeria (CBN) cleared $831 million of funds trapped by foreign airlines since June last year.

This development reduces the global amount of trapped funds for international airlines to approximately $1.8 billion, according to IATA.

The Geneva-based association also reported that Nigeria’s peak of about $850 million in blocked funds last June has now dwindled to just $19 million, which is pending CBN verification through commercial banks.

IATA Director-General Willie Walsh announced the progress in a statement on Sunday, commending the Nigerian government and CBN for their efforts.

“At its peak in June 2023, Nigeria’s blocked funds amounted to $850 million, significantly affecting airline operations and finances in the country. Carriers faced difficulties in repatriating revenues in US dollars, leading some airlines to reduce operations and one carrier to temporarily cease operations in Nigeria.

“As of April 2024, 98 percent of these funds have been cleared. The remaining $19 million is awaiting CBN’s verification of outstanding forward claims,” Walsh said.

While urging the Nigerian government to clear the residual $19 million and continue prioritizing aviation, he praised the government’s actions, emphasizing the benefits for individuals and the economy from reliable air connectivity,

IATA also highlighted a significant decrease in blocked airline funds globally, with Nigeria’s clearance contributing substantially to this reduction.

It also revealed that Egypt has similarly approved the clearance of its accumulated blocked funds, though both countries’ airlines were impacted by the devaluation of their currencies.

ALSO READ  Over 300 Experts Needed To Complete Zungeru Hydropower Project, Says Minister

However, Walsh noted ongoing issues in Pakistan and Bangladesh, where $731 million in airline funds remain blocked—$411 million in Pakistan and $320 million in Bangladesh. He called for immediate action from these countries to release the funds to maintain essential air connectivity.

“The solution in Bangladesh lies with the Central Bank prioritizing aviation’s access to foreign exchange in line with international treaty obligations. In Pakistan, efficient alternatives to the current system of audit and tax exemption certificates, which cause long processing delays, are needed,” Walsh added.

The CBN’s recent actions mark a significant step towards resolving the forex shortages that had previously led to substantial funds being blocked in Nigeria, improving the financial stability and operational capability of international airlines in the country.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button