Emirates, Other Foreign Airlines Speak on $700 Million Trapped in Nigeria, Reveal Next Move

Emirates, Other Foreign Airlines Speak on $700 Million Trapped in Nigeria, Reveal Next Move

  • Foreign Airline Operators have said the Nigerian government only paid less than 10% of the $783 million trapped in Nigeria
  • IATA data revealed that Nigeria is one of the most indebted countries to foreign airlines globally
  • The Nigerian government promised to begin payment for the trapped funds, but hiccups persist in disbursement

Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.

Foreign airlines have said that about 90% of their $783 million trapped funds in Nigeria remain unpaid.

The airlines revealed this at a stakeholders’ forum convened by the minister of aviation and aerospace development, Festus Keyamo, in Lagos recently.

IATA, FG, Festus Keyamo
Foreign airlines disclose next action over unpaid debt Credit:James D. Morgan / Contributor
Source: Getty Images

Nigeria is among most indebted countries to foreign airlines

Data from the International Air Transport Association (IATA) revealed that as of August 2023, Nigeria owes about $783 million of block funds belonging to airlines.

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The airlines revealed that a significant portion of the funds remained inaccessible.

Nigeria has constantly cited a lack of Forex for unpaid debts as it grapples with huge backlogs, which it began to clear recently.

IATA stated on Wednesday, December 7, 2022, that the number of airline funds due for repatriation but blocked by governments has hit $394 million in the last six months.

The body noted that blocked funds total nearly $2 billion globally and in more than 27 countries.

The five most indebted countries are Nigeria at $551 million, Pakistan at $225 million, Bangladesh at $208 million, Lebanon at $144 million, and Algeria at $140 million.

The chairman of International Airline Operators, Chima Kingsley, while international banks got some funds from the Central Bank of Nigeria, it only accounted for a small fraction of less than 10% of the trapped funds.

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Punch reports that Kingsley said the bulk of the funds are with commercial banks in Nigeria and remain unpaid.

President Bola Tinubu recently promised to clear the $7 billion outstanding Forex obligations owed by the Federal Government.

CBN began to clear the Forex backlogs blamed for the currency crisis in Nigeria, but the challenges have persisted in disbursing the funds.

Domestic airline operators lament trapped funds

Domestic airlines, represented by the Chairman of United Nigeria Airlines, Obiora Okonkwo, said local operators are also struggling with trapped funds, impacting their operations.

He said aircraft maintenance fees accumulated due to the inability to source FX for payments.

IATA’s area manager for West and Central Africa, Samson Fatokun, emphasised the need to reduce operating costs for the Aviation Industry.

Keyamo assured stakeholders that efforts were underway to clear the debts.

Emirates Airlines vows to never return to Nigeria due to indebtedness to foreign airlines

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Earlier, Legit.ng reported that Emirates Airlines said a large part of its revenue trapped in Nigeria has not been recovered.

According to the airline's statement released on Friday, March 17, 2023, the Nigerian government called for a committed strategy to enable foreign airlines operating in Nigeria to recover their funds.

In November last year, Emirates suspended operations in Nigeria over the country's indebtedness to foreign airlines, which was over $600 million.

Source: Legit.ng

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