IATA: For First Time, Nigeria Excluded In Airlines’ $1.7bn Trapped Funds

For the first time, Nigeria was not named as one of the countries with trapped funds as the International Air Transport Association (IATA) reported that $1.7 billion in airline funds are blocked from repatriation by governments as of the end of October 2024.

This is a small improvement compared to the $1.8 billion reported at the end of April. “Over the last six months, we have seen significant reductions in blocked funds in Pakistan, Bangladesh, Algeria and Ethiopia. At the same time, amounts are rising in the XAF /XOF zones and Mozambique.

“Bolivia has also emerged as a problem, where repatriating sales revenues is becoming increasingly difficult and unsustainable for airlines. This unfortunate game of ‘whack-a-mole’ is unacceptable.
Governments must remove all barriers for airlines to repatriate their revenues from ticket sales and other activities by international agreements and treaty obligations,” said IATA’s director general, Willie Walsh.

“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,” said Walsh.

Nine countries account for 83 per cent the airline industry’s blocked funds, amounting to $1.43 billion.
They include Pakistan, XAF Zone, Bangladesh, Algeria, Lebanon, Mozambique, Angola, Eritrea and XOF Zone.

Recall that in June IATA confirmed that the Central Bank of Nigeria cleared foreign airlines trapped funds worth $831m from June last year to date. The Geneva, Switzerland-based IATA said the development had brought international airlines’ trapped funds globally to about $1.8bn.

The association representing international airlines said the remaining $19 million was awaiting the CBN verification through commercial banks.

According to IATA, from the peak of about $850 million foreign airlines’ funds in Nigeria last June, only $19 million is left outstanding.

Pakistan continues to top the list of blocked funds countries at $311 million. This is an improvement from $411 million in April 2024. The main issue is the system of audit and tax exemption certificates which is causing long processing delays.

Bangladesh has seen the amount of blocked funds decrease to $196 million (from $320 million in April). The Central Bank needs to continue to prioritise airlines’ access to foreign exchange in line with international treaty obligations.

About $1 billion of airline money blocked from repatriation is in African countries. That is about 59 per cent of the global tally. Over the last six months, there were significant reductions in blocked funds in Algeria ($193 million from $286 million in April) and Ethiopia ($43 million from $149 million in April). At the same time, XAF Zone (+$84 million), Mozambique (+$84 million) and XOF Zone (+$73 million) contributed to the largest increases.

Bolivia is new to the list of blocked fund countries. A further deterioration in the availability of foreign exchange, particularly the US dollar, has resulted in an estimated $42 million in airline funds being blocked in the country.