Foreign airlines insist on exiting Nigeria over trapped $700m

 

Maureen Aguta

 

Despite the recent release of $61.64 million to foreign airlines in Nigeria by the Central Bank of Nigeria (CBN), there are still fears that some foreign airlines would exit the country if they are unable to completely repatriate their funds estimated around $700 million.

The Association of Foreign Airlines and Representatives in Nigeria (AFARN), raised the alarm yesterday, even as it described the $61 million released as “a drop in the ocean,” which will not resolve the pending issues.

It added that if the trapped funds saga was not resolved, some airlines may join Emirates Airlines and Ethiad in exiting the country, reports Daily Sun.

Last year, the International Air Transport Association (IATA), said $1.68 billion belonging to foreign airlines are currently trapped in Africa. Speaking at the African Airlines Association (AFRAA) 55th Annual General Meeting (AGM) in Entebbe, Uganda, IATA’s regional vice president of Africa and Middle East, Kamil Al Alwadi, said the trapped fund hit $1.68 billion at the end of September, 2023.

The countries holding on to the foreign airlines funds are Ghana, Nigeria, Ethiopia, Angola and Zimbabwe and Nigeria accounts for over $750 million of that amount. IATA attributed trapped funds as one of the major issues plaguing aviation in Africa, describing the numbers as alarming with it having a huge and devastating impact on connectivity.

Unfortunately, Nigeria is battling one of its worst foreign exchange scarcity nightmares following a profligate civil service structure, slump in export and a tumbling local currency (naira).

AFARN President, Dr. Kingsley Nwokoma, who had an interaction with journalists at the Murtala Muhammed Airport (MMA), Lagos, said the funds released by the apex bank is insignificant when juxtaposed with the money Nigeria owes foreign airlines operating in the country. He said that the Federal Government violated the Bilateral Air Service Agreement (BASA) signed with the countries these airlines emanated from and that this negatively affects the image of Nigeria.

He said that with the current situation, most of the foreign airlines operating into the country are taking money from their operations elsewhere to sustain operations in the country.

“We are not saying the government should pay all, but the government should have a plan to pay a chunk of the money every quarter. The fear is that if it continues like this, some of the airlines may go. The last conversation we had with the Minister of Aviation and Aerospace Development, Festus Keyamo, seemed good. He sounded serious about the payment and they have done $61 million thus far.

“Nigeria is just a very strange country. Some are still saying that the airlines should not be asking for any money from Nigeria. What is BASA? BASA is signed by countries and not airlines. We signed our commitment to the BASA and we are not doing anything about it.

“If all countries are defaulting like Nigeria, there will not be any airline that comes into the country again. The aviation industry is predicated on the U.S dollars. You pay your catering, handling, hotel and a lot of things in dollars and if you don’t pay, your crew would be sent out.

“The foreign airlines are not talking about it because they felt it is a little drop. It is not something to be too excited about. If we have had about $300m now or half of what the airlines are being owed, then, you can say there is hope. The government should sit with the foreign airlines just like how you sign your BASA agreements and agree on quarterly payment of these funds. The government should please keep to that agreement. By then, we will be making progress,” he said.