The International Air Transport Association revealed that, as of September, $1.68 billion of airlines’ funds are held up in Africa, out of a global total of $2.36 billion.
Kamil Alawadhi, the Regional Vice-President for Africa and the Middle East, shared this at the African Airlines Association 55th Annual General Assembly in Uganda.
He stressed the significant impact of this financial deadlock on connectivity, expressing concerns about the aviation sector’s sustainability. Alawadhi highlighted the association’s dedication to supporting its members in navigating these challenging circumstances.
Among the affected funds, Nigeria holds $783 million, with only around 10% of this amount cleared, further exacerbating the situation.
Despite recent efforts, the airlines said a significant portion of those funds remained inaccessible to them.
However, the CBN had started clearing the forex backlog to commercial banks to ease pressure on the foreign exchange.
The CBN had initiated steps to clear the forex backlog to ease pressure on foreign exchange, but challenges persisted in disbursing the funds effectively.
Alawadhi noted, “Since 2018, a significant amount of blocked funds have been repatriated from Angola, Ethiopia, Ghana, Nigeria, and Zimbabwe through working with the respective governments. Currently, $1.68bn in airline funds remain blocked across the continent.
“As of September, $1.68bn of airline funds are blocked across Africa out of $2.36bn globally. The numbers are alarming and the impact of this on connectivity is devastating.”
He stressed the importance of liberating blocked airline funds by advising governments on best practices to clear backlogs.
He said the repercussions of blocked funds extend beyond the airlines, adversely affecting the economies of the countries involved.