Business Hilights

Tracking Nigeria's Headline Business News Online


Fiscal slump forced African govts to halt repatriation of airlines profits

Ad 2
Ad 3

More facts have emerged on why foreign airlines’ $221m is still trapped in Nigeria, Angola and others.

According to financial analysts, low oil and mineral prices forced government revenue down, caused chronic dollar shortages and immense pressure on local currencies.

Thus, the resultant fiscal slump compelled hard hit African governments to halt foreign airlines to repatriate their dollar profits in full.

An IATA official, Adefunke Adeyemi, had told Reuters in Kigali, Rwanda, during an aviation meeting that last year, that Nigeria owed airliners $600m but as of October, the amount had fallen to $221m (about N79.5bn).

She noted that on the total of $1.2bn, Angola had blocked the largest amount of $500m, while Sudan had held up $200m.

IATA’s Vice President for Africa, Raphale Kuuchi, said airlines were in talks with a few governments to unblock airline funds but did not specify the companies that were affected.

“To do business effectively, airlines must be able to reliably repatriate their revenues. And that’s not the case in nine African countries of Angola, Algeria, Eritrea, Ethiopia, Libya, Mozambique, Nigeria, Sudan and Zimbabwe,” he said.

In August, IATA had stated that about $175m in ticket sales by foreign airlines was still trapped in Nigeria.

The Area Manager, South/West Africa, IATA, Mr. Samson Fatokun, had said in Lagos that this was due to scarcity of foreign exchange, adding that the situation was impacting negatively on the operations of the affected carriers.

Fatokun stated that the Central Bank of Nigeria (CBN), needed to accelerate the process that would give the affected airlines access to the funds.

CBN averred that “Though the CBN has tried to bring the blocked funds from $600m last June to about $175m as of June 2017, a lot could still be done to clean out the entire sum.

“Nigeria could accelerate the release of the funds as done by some African countries, such as Egypt, where the entire blocked funds have been repatriated.”

Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.