Foreign airlines have stated that around 90% of their $783 million stuck cash have not been paid.
According to The Punch, airlines made this announcement at a recent stakeholders’ event that the Minister of Aviation and Aerospace Development, Festus Keyamo, convened in Lagos.
The International Air Transport Association reported that as of August 2023, Nigeria accounted for a substantial $783 million of the blocked cash attributed to airlines.
The airlines said that a sizeable amount of those funds were still unavailable to them in spite of recent attempts to improve the situation.
Although international banks had received some funding from the Central Bank of Nigeria, the Chairman of International Airline Operators, Mr. Chima Kingsley, stressed that this only made up a small portion – less than 10% of the trapped funds.
“The majority of the blocked funds are held by commercial banks in Nigeria.” He said, “The majority of the money has not been paid.”
Two weeks earlier, President Bola Tinubu had pledged to settle the Federal Government’s estimated $7 billion in outstanding foreign exchange liabilities on FX forward contracts owed by commercial banks.
In an effort to relieve strain on foreign exchange, the CBN has begun releasing the backlog of foreign exchange to commercial banks.
The chairman of United Nigeria Airlines, Obiora Okonkwo, spoke on behalf of domestic carriers, outlining their challenges due to restricted access to foreign exchange and trapped cash that affect their operations.
He gave instances, such as the accumulation of aircraft maintenance costs brought on by the inability to get foreign exchange for payments.
The IATA’s Area Manager for West and Central Africa, Dr. Samson Fatokun, emphasized the necessity of lowering operational costs in the Nigerian aviation industry and advocated for support tailored to that industry.
Keyamo gave stakeholders assurances that the FX problem was being addressed.
The minister gave some encouragement to the airlines that are struggling financially even though he did not provide the precise disbursement amounts. He did, however, reaffirm the government’s commitment to finding a solution in the upcoming weeks.