About 90% of the $783 million in blocked funds that foreign airlines have revealed have not been unpaid.
The airlines announced this during a stakeholders’ forum hosted by the Minister of Aviation and Aerospace Development, Festus Keyamo, in Lagos recently.
Nigeria accounted for a substantial $783 million of the frozen payments for airlines as of August 2023, according to data from the International Air Transport Association.
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The airlines said that a sizeable amount of those monies were still unavailable to them in spite of recent attempts to improve the situation.
Although international banks had received some funding from the Central Bank of Nigeria, Mr. Chima Kingsley, Chairman of International Airline Operators, emphasized that this amounted to less than 10% of the funds that were stuck.
“The majority of the blocked funds are held by commercial banks in Nigeria.” He said, “The majority of the money has not been paid.”
Two weeks prior, President Bola Tinubu had pledged to settle the Federal Government’s estimated $7 billion in outstanding foreign exchange liabilities on FX forwards contracts due to commercial banks.
The Central Bank of Nigeria did provide some cash to overseas banks, but less than 10% of the funds that were frozen, according to Mr. Chima Kingsley, Chairman of overseas Airline Operators.
“The majority of the blocked funds are held by commercial banks in Nigeria.” He continued, “The majority of the money has not been paid.”
President Bola Tinubu had promised two weeks earlier to discharge the estimated $7 billion in outstanding foreign exchange liabilities on FX futures contracts owed to commercial banks by the Federal Government.
He gave instances, such as the accumulation of aircraft maintenance costs brought on by the inability to get foreign exchange for payments.
Dr. Samson Fatokun, the IATA’s Area Manager for West and Central Africa, emphasized the necessity of lowering operational costs in the Nigerian aviation industry and argued for support tailored to that industry.
Keyamo gave stakeholders assurances that the FX problem was being addressed.
The minister offered a ray of hope for the airlines struggling with financial constraints by reiterating the government’s commitment to resolving the issue in the upcoming weeks, even though he did not reveal the precise disbursement figures.