The International Air Transport Association (IATA), the global clearing house for over 300 airlines has tagged Nigeria as the biggest debtor in the foreign airlines’ $2 billion blocked funds around the world.
The latest statement issued by the international body, while confirming that the blocked funds had risen by more than 25% ($394 million) in the last six months, warned that the continued withholding of the money will cause serious financial consequences to the economy of the indebted nations.
According to the director general of IATA, Willie Walsh; “Preventing airlines from repatriating funds may appear to be an easy way to shore up depleted treasuries, but ultimately the local economy will pay a high price. No business can sustain providing service if they cannot get paid and this is no different for airlines. Air links are a vital economic catalyst. Enabling the efficient repatriation of revenues is critical for any economy to remain globally connected to markets and supply chains”.
The latest update given by IATA today showed that Nigeria topped the list of the highest indebted countries with $551 million followed by Pakistan with $225 million.
The other three highest debtor countries are Bangladesh with $208 million, Lebanon with $ 144 million and Algeria with $140 million.
While calling on governments of the countries affected, the IATA DG urged the indebted countries to remove all barriers to airlines repatriating their revenues from ticket sales and other activities in line with international agreements and treaty obligations.
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According to IATA: “Total funds blocked now tally at close to $2.0 billion. IATA calls on governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities, in line with international agreements and treaty obligations.
Making reference to Nigeria as the highest debtor, the Regional Vice President for Africa and the Middle East, IATA, Kamil Al-Awadhi stated: “Total airline funds blocked from repatriation in Nigeria are $551 million. Repatriation issues arose in March 2020 when demand for foreign currency in the country outpaced supply and the country’s banks were not able to service currency repatriations.
“Despite these challenges Nigerian authorities have been engaged with the airlines and are, together with the industry, working to find measures to release the funds available. “Nigeria is an example of how government-industry engagement can resolve blocked funds issues. Working with the Nigerian House of Representatives, Central Bank and the Minister of Aviation resulted in the release of $120 million for repatriation with the promise of a further release at the end of 2022.
“This encouraging progress demonstrates that, even in difficult circumstances, solutions can be found to clear blocked funds and ensure vital connectivity”.
IATA however used the opportunity to renew its calls on Venezuela to settle the $3.8 billion of airline funds that have been blocked from repatriation since 2016 when the last authorization for limited repatriation of funds was allowed by the Venezuelan government.
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