Nigeria owes airlines $812mn amid depleting forex reserves

The Director General, Willie Walsh, International Air Transport Association (IATA) said Nigeria is one of the top five most indebted countries to foreign airlines.

Walsh, who spoke at the 2023 IATA Annual General Meeting in Istanbul, Turkey, noted that trapped funds of foreign airlines across the globe, skyrocketed to $2.27 billion in April 2023 from the initial $1.55 billion in April 2022, a representation of 47 percent increase.

The Director General IATA, said of the $2.27 billion trapped funds, Nigeria topped the most indebted five countries with $812.2 million followed by Bangladesh with $214 million debts.

Other top indebted countries are: Algeria with $196.3 million, Pakistan with $188.2million and Lebanon with $141.2 million. The debts accounted for 68.0% of blocked funds.

The IATA DG warned that the rapid rise of blocked funds are a threat to airline connectivity in the affected markets.

“Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets.

“Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity and job creation,” Walsh said.

DAILY COMMERCE reports that Nigeria’s failure to meet the obligations may not be unconnected with the depleting foreign exchange, forex, reserves as the country has been a net importer with poor foreign exchange policy though trading surplus was recorded in the first quarter 2023.

In the first quarter of 2023, Nigeria’s total trade stood at N12,046.92 billion of which total exports stood at N6,487.04 billion and total imports amounted to N5,559.88 billion, according to data from the National Bureau of Statistics.

The Nigria’s exchange reserves dropped by $47.83 million in April to $35.36 billion, compared to $37.08 billion recorded at the close of 2022.

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