By Seun Ibiyemi
For the first time, Nigeria has been removed from the list of countries with blocked airline funds, according to the International Air Transport Association (IATA).
The association reported that $1.7 billion in airline funds remain trapped globally as of October 2024, reflecting a slight improvement from $1.8 billion reported in April.
Over the past six months, several countries made notable progress in reducing blocked funds. Pakistan, Bangladesh, Algeria, and Ethiopia significantly lowered the amounts owed to airlines. In Pakistan, funds dropped from $411 million in April to $311 million due to efforts to address long delays caused by audit and tax exemption certificate processing.
Similarly, Bangladesh reduced its blocked funds from $320 million in April to $196 million by prioritising airlines’ access to foreign exchange through its central bank.
Algeria saw its blocked airline funds decline from $286 million in April to $193 million, while Ethiopia made substantial progress, reducing its amount from $149 million to $43 million.
Despite these improvements, some countries experienced worsening conditions. The XAF Zone, XOF Zone, and Mozambique saw significant increases in blocked funds, contributing $84 million, $73 million, and $84 million respectively.
Bolivia has emerged as a new area of concern due to the growing scarcity of foreign exchange, especially US dollars. An estimated $42 million in airline funds is now trapped in the country, making it increasingly difficult for airlines to repatriate revenue from ticket sales and other commercial activities.
Willie Walsh, IATA’s Director General, condemned the persistent issue of blocked funds, describing it as an “unacceptable” situation.
He emphasised the importance of removing barriers that prevent airlines from accessing their revenues, urging governments to honor international agreements and treaty obligations.
“No country wants to lose aviation connectivity, which drives economic prosperity. But if airlines cannot repatriate their revenues, they cannot be expected to provide a service.
“Economies will suffer if connectivity collapses. So, it is in everyone’s interest, including governments, to ensure that airlines can repatriate their funds smoothly,” Walsh stated.
Nigeria’s removal from the list follows the clearance of $831 million in trapped airline funds from June 2023 to October 2024, leaving only $19 million awaiting verification by the Central Bank of Nigeria (CBN) through commercial banks.
This marked a major milestone, considering that the country previously topped the list with about $850 million in blocked funds.
According to IATA, nine countries still account for 83 percent of the total blocked airline funds, amounting to $1.43 billion.
These countries include: Pakistan: $311 million (down from $411 million in April), Bangladesh: $196 million (down from $320 million), Algeria: $193 million (down from $286 million), Mozambique: $84 million (up from $0), XAF Zone: $84 million (up from $0), XOF Zone: $73 million (up from $0), Lebanon: Amount unspecified, Angola: Amount unspecified, Eritrea: Amount unspecified.
With about $1 billion, or 59 percent of blocked funds, concentrated in African countries, IATA continues to call for urgent government action to resolve the issue and stabilize the global airline industry.