According to data from the International Air Transport Association, as of August 2023, Nigeria accounted for a substantial $783 million of airlines' blocked funds.
Despite recent efforts to alleviate the situation, the airlines highlighted that a significant portion of these funds remained inaccessible to them.
Mr. Chima Kingsley, Chairman of International Airline Operators, emphasized that while some funds from the Central Bank of Nigeria had reached international banks, this accounted for less than 10% of the trapped funds, with the bulk of these funds held by Nigerian commercial banks.
“The bulk of the blocked funds are with Nigerian commercial banks. The bulk of the money has not been paid,” he said.
Two weeks ago, President Bola Tinubu pledged to clear the estimated $7 billion outstanding foreign exchange obligations of the Federal Government on forex forwards contracts owed to commercial banks.
It was previously reported that the Central Bank of Nigeria (CBN) had started clearing the forex backlog to commercial banks to ease pressure on foreign exchange. However, challenges persisted in disbursing the funds effectively.
Domestic carriers, represented by the Chairman of United Nigeria Airlines, Obiora Okonkwo, expressed their struggles, explained the impact of trapped funds and limited access to forex on their operations which included challenges such as accumulating aircraft maintenance fees due to the inability to source forex for payments among others.
Dr. Samson Fatokun, the Area Manager of West and Central Africa for IATA, stressed the need to reduce operating costs in the Nigerian aviation sector and called for sector-specific support.
Minister Keyamo assured stakeholders that efforts were underway to address the forex challenge, although specific disbursement figures were not disclosed. He reiterated that the government is putting in measures to solve the issue in the coming weeks, offering hope to the airlines facing financial constraints.