Forex scarcity bites harder as $143.8m foreign airlines revenues trapped in Nigeria

Abiola Seun

Scarcity of foreign exchange in the country has affected the repatriation of $143.8 million foreign airline revenues from ticket sales, cargo space, and other activities trapped in Nigeria to their reapective countries, report has shown

Recall that the Director-General, International Air Transport Association (IATA), Willie Walsh, last week said $143.8 million in airline revenues are blocked by the Nigerian government adding that nearly $1 billion in airline revenues are blocked by governments across the globe.

According to him, airlines will not be able to provide reliable connectivity if they cannot rely on local revenues to support operations.

Walsh said it was critical for all governments to prioritize to ensure that funds can be repatriated efficiently, adding that could slow the recovery of travel and tourism in affected markets as the airline industry srill struggles to recover from the COVID-19 crisis.

However, speaking on the trapped fund, the Managing Director, Aglow Aviation Support Services Limited, Tayo Ojuri, said the scarcity of foreign exchange due to the drop in foreign exchange earnings by the Federal Government is responsible for the non-repatriation of the foreign airlines revenue fund.

According to him, no foreign exchange to back up the demand of the foreign airlines , saying that will lead to increase in price of tickets expecially now that the country and the sector is recovering from the COVID-19 pandemic.

He, however, advised the government to create a structured repayment plan policy to help the foreign airlines repatriate their funds back to their respective countries.

He said, “the reason why this is happening is because there is no foreign exchange to back up the demands of the foreign airlines but government should put a structured repayment plans in place on how to repatriate the fund”

On the implication of the trapped fund on the travelling publics, Ojuri said,” that will lead to increase in ticket prices for travellers going for tourism and it will also affect restarting of tourism and the aviation sector that were hitherto disrupted by Covid-19.

“According to the IATA report, Nigeria and Lebanon are the countries with the most trapped fund while there have been positive progress in reducing blocked funds in Bangladesh and Zimbabwe,” he said.

Also speaking, the Chief Executive Officer, Belujane Konzult, an aviation consulting firm, Chris Aligbe said it was due to scarcity of foreign exchange in the country which is also affecting local airlines that caused the blocking of the fund.

He said, “if foreign airlines can’t have access to their fund then it is not deliberate because local airlines too have no access to foreign exchange for their C-checks and this is because government is having challenges with foreign exchange.

“It is not something that is deliberately withheld by the government even local airlines cannot source for foreign exchange and it is not aviation sector alone but every other sub-sector of the economy.

“I believe government is not deliberately withholding their money rather it is because of the challenge they have with foreign exchange,” he said.