The amount of revenue blocked by the Nigerian government from repatriation by foreign airlines has increased to $743 million, up from $662 million in January 2023, the International Air Transport Association (IATA) said, Tuesday.
The association made the announcement in a letter addressed to Hadi Sirika, Minister of Aviation, and signed by Samson Fatokun, the association’s West and Central Africa Area Manager.
The air transport group and the global airline community wrote to the federal government, requesting a special invention to resolve the country’s blocked funds for airlines.
“For over a year, Nigeria has been the country with the highest amount of airline-blocked funds in the world. Please find attached the comparative table of airlines’ blocked funds by country,” the letter reads.
“Moreover, as of January 2023, airlines’ blocked funds in Nigeria have increased to $743,721,092 from $662m in January 2023 and $549m in December 2022.”
TechEconomy recalls that the trapped funds accrued from ticket sales by foreign airlines. As of March 2022, the total funds were $289 million, but three months later, they increased to $464m amid pressure from the airlines.
As a result of this, many airlines in the past had suspended flight operations in the country, notably Emirates Airlines and British Airways.
Since then, there have been a series of meetings to address the issue. However, sources close to the matter say that the repatriation of the trapped funds was not in the purview of the Ministry of Aviation but rather the Federal Ministry of Finance.
Speaking in the letter on Tuesday, IATA said the increasing backlog of international airlines’ blocked funds in Nigeria sends a strong message against foreign direct investment (FDI) in Nigeria.
“Potential investors are reading from the plight of the airlines that they would not be able to repatriate their funds from Nigeria, even at this moment when Nigeria is expecting investments in the concession of some of its prominent airports,” the group said.
“Foreign airlines fly into Nigeria within the legal framework of the bilateral air service agreement (BASA) signed between their countries and the Federal Republic of Nigeria.”
It is agreed in those BASAs that Nigeria will facilitate the repatriation of the funds of the other party’s airline. Nigeria flaunts this contractual obligation by not facilitating enough the repatriation of airlines’ funds.”
IATA explains, reduces passenger and cargo access to Nigeria. “E-commerce that relies on aviation for speedy delivery will be impacted in Nigeria.
“Moreover, going by the law of demand and supply, the reduction of airline inventories in the Nigerian market will lead to a ticket fare increase, which will further burden average Nigerians and take air travel out of the reach of many Nigerians,” it said.