IATA Reveals $19 Million Yet to Be Cleared in Nigeria

The International Air Transport Association (IATA) disclosed on Sunday that $19 million remains uncleared in Nigeria due to the Central Bank’s ongoing verification of outstanding forward claims filed by commercial banks.

According to IATA, in June 2023, Nigeria’s blocked funds amounted to $850 million, significantly impacting airline operations and finances in the country.

The organization stated that airlines faced difficulties repatriating revenues in US dollars, which led some carriers to reduce their operations and one to temporarily cease operations in Nigeria, severely affecting the country’s aviation industry.

As of April 2024, IATA reported that 98 percent of these funds have been cleared, with the remaining $19 million pending due to the Central Bank’s verification process.

“We commend the new Nigerian government and the Central Bank of Nigeria for their efforts to resolve this issue. Individual Nigerians and the economy will all benefit from reliable air connectivity for which access to revenues is critical. We are on the right path and urge the government to clear the residual $19 million and continue prioritizing aviation,” said Willie Walsh, IATA’s Director General.

IATA has reported a 28 percent decrease in the amount of airline funds blocked from repatriation by governments. At the end of April, the total blocked funds stood at approximately $1.8 billion, a reduction of $708 million (28 percent) since December 2023.

IATA reiterated the call for governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities in accordance with international agreements and treaty obligations.

“The reduction in blocked funds is a positive development. The remaining $1.8 billion, however, is significant and must be urgently addressed. The efficient repatriation of airline revenues is guaranteed in bilateral agreements. Even more importantly, it is a pre-requisite for airlines—who operate on thin margins—to be able to provide economically critical connectivity. No business can operate long-term without access to rightfully earned revenues,” Walsh said.

He noted that the main driver of the reduction was the significant clearance of funds blocked in Nigeria, adding that Egypt also approved the clearance of its significant accumulation of blocked funds. However, in both cases, airlines were adversely affected by the devaluation of the Egyptian Pound and the Nigerian Naira.