The International Air Transport Association (IATA) has called on Nigeria and other countries to respect international agreements obliging them to ensure airlines are able to repatriate their revenues.
The call is hinged on the challenge some airlines are facing due to their blocked funds in the Central Bank of some countries which they are yet to repatriate to home countries of these foreign airlines.
“Air connectivity is vital to all economies. The airline industry is a competitive business operating on thin margins. So the efficient repatriation of revenues is critical for airlines to be able to play their role as a catalyst for economic activity. It is not reasonable to expect airlines to invest and operate in nations where they cannot efficiently collect payment for their services,” said IATA’s Director General and Chief Executive Officer, Tony Tyler.
According to him, IATA monitors blocked funds globally, the sum of which exceeds $5 billion. “The top two countries blocking the repatriation of airline funds are Venezuela and Nigeria,” he said.
Tyler put total airline funds blocked from repatriation in Nigeria at almost $600 million, and explained that repatriation issues arose in the second half of 2015 when demand for foreign currency in the country outpaced supply and the country’s banks were not able to service currency repatriations. However, Tyler noted that the Nigerian authorities are engaged with the airlines and are, together with the industry, seeking possible measures to make the funds available.
“Blocked funds are a problem in a diverse group of countries, some of them undergoing significant economic challenges particularly with a fall in oil revenues. But one thing all five nations have in common is the urgent need for robust air connectivity that is being hampered by airlines’ difficulty in repatriating funds. Strong connectivity is an economic enabler and generates considerable economic and social benefits – something that struggling economies need more than ever. It is in everybody’s interest to ensure that airlines are paid on-time, at fair exchange rates and in full,” Tyler said.
IATA revealed that top five countries blocking repatriation of airline funds are Venezuela to the tune of $3.780 billion for 16 months now. Nigeria – $591million for seven months now, Sudan – $360 million for four months, Egypt – $291million for four months, Angola – $237million held for five months now.