Foreign airlines have disclosed that approximately 90 percent of their $783 million trapped funds in Nigeria remain unpaid, raising concerns and hindering their operations. This revelation emerged during a stakeholders’ forum convened by the Minister of Aviation and Aerospace Development, Festus Keyamo, in Lagos.
According to data from the International Air Transport Association (IATA), as of August 2023, Nigeria accounted for a significant portion of airlines’ blocked funds globally. Despite recent efforts to alleviate the situation, foreign carriers reported that the majority of the funds are still inaccessible.
Chima Kingsley, Chairman of International Airline Operators, emphasized that although some funds were received by international banks from the Central Bank of Nigeria, they constituted less than 10 percent of the trapped funds. The substantial portion, he noted, remains held by Nigerian commercial banks.
President Bola Tinubu had pledged to clear the estimated $7 billion in outstanding foreign exchange obligations of the Federal Government on forex forwards contracts. While the Central Bank of Nigeria (CBN) initiated steps to clear the forex backlog for commercial banks, challenges persisted in effective fund disbursement.
Representatives of domestic carriers, including Obiora Okonkwo, Chairman of United Nigeria Airlines, highlighted the impact of trapped funds and limited forex access on their operations. Challenges ranged from accumulating aircraft maintenance fees to the inability to source forex for payments.
Dr. Samson Fatokun, the Area Manager of West and Central Africa for IATA, stressed the urgency of reducing operating costs in the Nigerian aviation sector, advocating for sector-specific support.
Minister Festus Keyamo assured stakeholders that efforts were underway to address the forex challenge. While specific disbursement figures were not disclosed, he reiterated the government’s commitment to resolving the issue in the coming weeks, providing a glimmer of hope for airlines grappling with financial constraints.