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$700m Lockdown: AFARN Issues Dire Warning As Foreign Airlines Consider Exiting Nigeria
$700m Lockdown: AFARN Issues Dire Warning As Foreign Airlines Consider Exiting Nigeria....KINDLY READ THE FULL STORY HERE▶
Despite the recent injection of $61.64 million into the coffers of foreign airlines in Nigeria by the Central Bank of Nigeria (CBN), concerns persist that several foreign carriers might consider pulling out of the country if they are unable to fully repatriate their accumulated funds, estimated at around $700 million…...CONTINUE READING
The Association of Foreign Airlines and Representatives in Nigeria (AFARN) sounded the alarm, dismissing the released $61 million as “a drop in the ocean” that fails to address the underlying issues. There is apprehension that, if the ongoing issue of trapped funds is not promptly resolved, additional airlines could follow in the footsteps of Emirates Airlines and Etihad, choosing to exit the Nigerian market.
In the backdrop of this financial quagmire, the International Air Transport Association (IATA) revealed last year that a substantial $1.68 billion belonging to foreign airlines is currently stranded across Africa. At the 55th Annual General Meeting (AGM) of the African Airlines Association (AFRAA) in Entebbe, Uganda, IATA’s regional vice president of Africa and the Middle East, Kamil Al Alwadi, disclosed that this figure had reached $1.68 billion by the end of September 2023. Notably, Nigeria holds a significant portion of this sum, surpassing $750 million. IATA underscored the severity of the issue, labeling trapped funds as a major impediment to aviation in Africa, emphasizing its detrimental impact on connectivity.
Compounding Nigeria’s economic challenges is a dire foreign exchange scarcity, attributed to an extravagant civil service structure, declining exports, and a devalued local currency (naira).
AFARN President, Dr. Kingsley Nwokoma, expressed dissatisfaction with the funds released by the apex bank, deeming it insignificant compared to the outstanding debts owed to foreign airlines. He criticized the Federal Government for breaching the Bilateral Air Service Agreement (BASA) with the countries of origin for these airlines, asserting that this transgression tarnishes Nigeria’s reputation. Nwokoma highlighted that many foreign airlines are diverting funds from their global operations to sustain their activities within Nigeria.
Nwokoma emphasized the urgency for a comprehensive plan, suggesting that the government should commit to periodic payments, alleviating the financial burden on foreign airlines. He called for adherence to the BASA agreements and stressed the need for open dialogue with foreign airlines to establish a structured plan for quarterly payments, fostering progress in resolving this protracted issue.
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