Market News

Nigeria has exited the list of countries blocking the repatriation of airline funds, a new report by the International Air Transport Association stated on Monday.

This was as the Geneva, Switzerland-based IATA noted that airlines’ trapped funds globally currently amount to $1.7bn. A small improvement compared to the $1.8bn reported at the end of April.

This latest significant development means Nigerian authorities have resolved the issue of frozen airline revenues, allowing international carriers to access and transfer their funds back to their home countries.

In June, IATA confirmed that the Central Bank of Nigeria cleared foreign airlines trapped funds worth $831m.

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

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

But providing new updates following an assessment conducted at the end of October 2024, the international body in a statement on Monday, said nine countries account for 83 per cent of the airline industry’s blocked funds, amounting to $1.43bn.

They include Pakistan, XAF Zone, Bangladesh, Algeria,  Lebanon Mozambique, Angola, Eritrea, and XOF Zone.

 “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 Willie Walsh, IATA’s Director General.

The report disclosed that Pakistan continues to top the list of blocked funds countries at $311m. This is an improvement from $411m in April 2024. It said 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 $196m (from $320m in April). The Central Bank needs to continue to prioritise airlines’ access to foreign exchange in line with international treated obligations.

About $1bn 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 ($193m from $286m in April) and Ethiopia ($43m from $149m in April). At the same time, XAF Zone (+$84m), Mozambique (+$84m) and XOF Zone (+$73m) contributed to the largest increases.

While 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 $42m in airline funds being blocked in the country.