Refusing To Pay : Nigeria Owes Foreign Airlines $450 Million, 11 Other African Countries Collectively Owes $550 Million
12 african countries, including Nigeria, collectively owes foreign airlines about US$1 billion.
Nigeria alone still hanging onto $450 Million — and the amount Nigeria is holding onto is increasing weekly.
Retaining money belonging to airlines discourages other airlines from serving the market and reduces options for passengers.
Nigeria tops the list of 12 African countries that have collectively blocked foreign airlines from repatriating US$1 billion to their home countries, which is 67% of airlines’ blocked funds globally, Simple Flying reports.
As of May 2022, Nigeria was hanging onto $450 million in funds belonging to foreign airlines — and the amount Nigeria is holding onto is increasing weekly.
Speaking at IATA 2022 in Doha, Kamil Alawadhi, IATA’s Regional Vice President for Africa and the Middle East, said resolving the issue of blocked funds was a key priority for IATA.
He said Nigeria, being the biggest economy in Africa and the world’s tenth-largest oil exporter with a population exceeding 200 million, is not a market many airlines can easily ignore.
Alawadhi notes that Qatar Airways, Delta Air Lines, Ethiopian Airlines, Emirates, Lufthansa, British Airways, and Turkish Airlines are among the high-profile foreign airlines flying into Nigeria.
While they pocket the fares sold to passengers in markets outside Nigeria, Alawadhi said collecting monies from fares sold to passengers in Nigeria is a trickier issue.
Mr Alawadh says ongoing problems with blocked funds are extremely damaging to the airline industry.
“This is sad to see that one country almost contributes about 25% of global funds. Some countries have reasons you can understand for not releasing our cash, political reasons, and economic reasons, but releasing blocked funds has been one of our priorities.”
Other African countries owing foreign airlines include Zimbabwe with $100 million and Algeria about $96 million. Eritrea is holding onto $79 million while Ethiopia is retaining about $75 million belonging to foreign carriers.
Mr Alawdh says IATA doesn’t always know the exact reasons why Nigeria and other countries retain funds belonging to foreign airlines. Still, he does say it is often a question of priorities set by governments and central banks.
While some countries are incrementally working to pay down amounts owed, a development IATA welcomes, other nations like Nigeria, where the problem is escalating, are tougher to deal with.
Retaining money belonging to airlines also discourages other airlines from serving the market, reduces connectivity, and reduces options for passengers.
“It’s been a hectic ride with Nigeria,” says Mr Alawadh. He says he’s met with the Nigerian Vice President Professor Yemi Osibanjo over the matter and adds there’s awareness at the top levels of Government there that they need to address the issue.
“You keep chipping away and telling them that this will damage the country down the road.”
Alawadhi says he has concluded two rounds of talks with the Nigerian Government and that the third round is soon to start, adding that he is relatively optimistic about a solution to the long-running problem.