Foreign airlines have revealed that the majority of their $783 million in trapped funds in Nigeria remain unpaid. This disclosure was made during a recent stakeholders’ forum hosted by Festus Keyamo, the Minister of Aviation and Aerospace Development, in Lagos.
As of August 2023, data from the International Air Transport Association showed that Nigerian authorities were holding a significant portion of foreign airlines’ blocked funds. Despite recent efforts to alleviate the situation, foreign carriers reported continued difficulties in accessing these funds.
Chima Kingsley, Chairman of International Airline Operators, emphasized that while some funds had been received by international banks from the Central Bank of Nigeria, it represented less than 10% of the trapped funds. The bulk of the funds, he said, still remained with Nigerian commercial banks.
President Bola Tinubu had recently pledged to clear the estimated $7 billion outstanding foreign exchange obligations of the Federal Government related to forex forwards contracts owed to commercial banks. The Central Bank of Nigeria had initiated steps to clear the forex backlog and ease pressure on foreign exchange, but challenges in disbursing the funds effectively persisted.
Domestic carriers, represented by the Chairman of United Nigeria Airlines, Obiora Okonkwo, shared their struggles, citing issues like aircraft maintenance fees accumulating due to the inability to access forex for payments.
Dr. Samson Fatokun, the Area Manager of West and Central Africa for IATA, stressed the need to reduce operating costs in the Nigerian aviation sector and called for sector-specific support.
Minister 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, offering hope for airlines grappling with financial constraints.