Nigeria is withholding $450 million in revenue international carriers operating in the country have earned, an executive at the world’s largest airlines association said on Sunday.
Africa’s largest economy has restricted access to foreign currency for imports and for investors seeking to repatriate their profits as the nation tackles a severe dollar shortage.
The International Air Transport Association’s Vice President for Africa and the Middle East, Kamal Al Awadhi, described talks with Nigerian officials to release the funds as a “hectic ride.”
“We keep chipping away and hoping that it clicks that this is going to going to damage the country down the road,” he told reporters in Doha on the eve of IATA’s annual meeting of airline chiefs there this week.
Al Awadhi, a former chief executive of Kuwait Airways, said Nigerian officials had blamed the foreign currency shortage for not repatriating the airline revenue.
The Central Bank spokesperson in Nigeria did not immediately respond to a request for comment.
Nigeria has previously blocked revenue from foreign airlines before later repatriating the funds.
IATA has so far had held two rounds of talks with Nigerian officials, including from the Central Bank, who Al Awadhi said were “not responsive” to releasing cash.
Another round of talks between IATA and Nigerian officials is expected to start soon, the airline lobby group said, without specifying when.
“Hopefully, we can get some sort of solution where it starts going down (but) it won’t, I doubt, be paid in a single shot,” Al Awadhi said.
IATA said $1 billion of revenue belonging to foreign airlines is being withheld across Africa, although Nigeria is the only country where the value of blocked funds has risen.
The $450 million, the largest amount withheld by any African nation, in May was 12.5 per cent higher than the previous month.
Algeria, Ethiopia and Zimbabwe, who combined are withholding $271 million from foreign airlines, in May marginally paid down what they owed. Eritrea was unchanged at $75 million, IATA said.
Speaking to NATIONAL ECONOMY, the spokesman, Federal Ministry of Aviation, James Oduadu, said the repartraition of trapped fund isn’t in the purview of the ministry but, Federal Ministry of Finance.
He, however, stated that the minister is ready to help the foreign airlines repartrait their funds to their country and also to be profitable.
He said, “I know that the minister of Aviation, Sen. Hadi Sirika, is at the forefront of encouraging both local and foreign airlines to operate to be their full capacity and I know that he is one person that will do whatever is possible for airlines operating in Nigeria to have access to their funds.
“If it’s true that Nigeria is blocking fund which I doubt very much probably there may be issues that are not resolved and off course, repatriation of funds is not within the purview of the ministry of aviation, but that of finance. If there are problems the foreign airlines are facing and they need assistance of ministry of aviation, the onus is on them to come for intervention even though it’s not within the purview of the ministry and I can assure all stakeholders, local and foreign that the minister of aviation is committed to doing whatever is humanly possible to ensure that their operation are effective, efficient and profitable,” he said.