IATA has reported a 28% decrease in the approximately US$1,8 billion (R33,8bn) of global blocked funds, as governments repatriated about $708 million (R13,3bn) since December 2023.
Nigeria’s significant clearance of blocked funds contributed substantially to the reduction.
In June 2023, Nigeria’s blocked funds amounted to $850 million (R15,9bn), negatively impacting the country’s airline operations and finances. The country struggled to repatriate the high volume of revenues in US dollars, resulting in reduced outbound services and ceased inbound operations.
However, as of April 2024, 98% of Nigeria’s blocked funds were cleared, with only $19 million (R356m) remaining due to the Central Bank of Nigeria’s verification of outstanding forward claims.
“We commend the new Nigerian government and the Central Bank of Nigeria for their efforts to resolve this issue. Individual Nigerians and the economy will all benefit from reliable air connectivity for which access to revenues is critical. We are on the right path and urge the government to clear the residual $19m (R356m) and continue prioritising aviation,” said Willie Walsh, IATA Director General.
Egypt also approved the clearance of its significant accumulation of blocked funds. However, in both cases, airlines were adversely affected by the devaluation of the Egyptian pound and the Nigerian naira.
IATA reiterated the call for governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities, as required by international agreements and treaty obligations.
“The efficient repatriation of airline revenues is guaranteed in bilateral agreements. Even more importantly, it is a prerequisite for airlines – who operate on thin margins – to be able to provide economically critical connectivity. No business can operate long-term without access to rightfully earned revenues,” said Walsh.
