IATA Warns that Foreign Airlines May Exit Nigeria Soon Over Trapped Funds

Toba Owojaiye reporting 

Abuja , Nigeria 

Nigeria is facing a potential crisis in its aviation sector as Turkish Airlines, Emirates Airlines, British Airways, and several other foreign carriers contemplate leaving the country due to funds trapped within its borders. The International Air Transport Association (IATA) sounded the alarm during a media briefing, revealing that Nigeria accounts for almost half of the total blocked or trapped funds in Africa, amounting to a staggering $2.57 billion.

Truth Live News gathered that Kamil Alawadhi, IATA’s Regional Vice President for Africa and the Middle East, expressed deep concern over Nigeria’s debt to foreign airlines, standing at $792 million, which is only $66 million less than the combined trapped funds owed by Egypt, Algeria, the XAF zone, and Ethiopia.

Alawadhi suggested that this critical situation might necessitate the Federal Government declaring a state of emergency in the aviation sector to prevent Nigeria from being labeled a no-fly zone in the future.

Alawadhi emphasized that the trapped funds would not only reduce airline capacity and connectivity in Nigeria but may also lead to negative perceptions about the business environment. The implications include potential increases in ticket prices for domestic and international routes, adding to the already record-high prices. Such a scenario could deter investors and harm the country’s reputation, affecting foreign direct investment and potentially leading to the closure of travel agency businesses.

Alawadhi stressed the vital role of cash flow in the airline industry, stating that the inability to repatriate funds severely impedes operations and limits the markets airlines can serve. He pleaded with the Nigerian government to prioritize aviation in accessing foreign exchange, emphasizing that air connectivity is a crucial economic catalyst for the country.

As the Federal Government intensifies efforts to attract foreign investment, the aviation sector’s current challenges pose a significant threat amid an incessant demand for dollar.