Egypt clears airlines’ funds backlog, Nigeria to follow suit

Problems associated with blocked funds in Africa is yet to abate as the International Air Transport Association (IATA) said airlines’ trapped funds in Africa are an increasing problem with carriers as they are unable to repatriate their foreign currency earnings from nine African countries.

Before now, Nigeria, Egypt, Angola and Sudan topped countries in the region with $2 billion revenues belonging to the carriers.

In June, the Central Bank of Nigeria (CBN) released $425 million to international airlines, which was part of the $600 million funds blocked in Nigeria, leaving $175 million still in the coffers of CBN.

The clearing house for 280 international airlines, International Air Transport Association (AITA), while commending the Federal Government for resolving the crisis of blocked funds that almost forced carriers to withdraw their operations last year, pleaded with the Federal Government to speed up the release of the remaining funds still trapped in the country.

IATA’s Regional Vice President for the Middle East & Africa, Muhammad Ali Albakri, said: “It is in everybody’s interest to ensure that airlines are paid on-time, at fair exchange rates and in full. We have had success in Egypt where government has completely cleared the backlog of funds. We appeal to other governments – Angola and Sudan – to follow suit,” said Al Bakri.

In a paper made available to Woleshadare.net at the weekend, Bakri urged governments where currency is blocked to find practical solutions to release airlines’ funds in line with global standards and bilateral treaty obligations.

His words: “Many of the countries with blocked funds are undergoing significant economic challenges. But blocking airlines’ funds is not the answer.”

Meanwhile, IATA has forecast Africa will be a market of 350 million airline passengers by 2035 and identified four priorities which must be addressed if aviation is to deliver maximum economic and social benefits for countries on the continent.

The IATA boss disclosed that African aviation currently supports 6.8 million jobs and contributes $72.5 billion in Gross Domestic Product (GDP).

Over the next 20 years, passenger demand, he said, is set to expand by an average of 5.7 per cent annually. This opens up incredible economic opportunities for the continent’s 54 nations.

He described aviation as the lifeblood of Africa and one that connects business, enables trade and tourism, reunites families and friends, links cultures and delivers aid to those in need.

But despite aviation’s social and economic benefits, airlines are seeing their profits eroded and margins squeezed. Globally, the average profit per passenger in 2017 will be about $7.69, according to IATA.

IATA’s Regional Vice President for the Middle East & Africa, Muhammad Ali Albakri, at the just-ended IATA Middle East and Africa Aviation Day in Jordan said in contrast, African carriers are forecast to lose $1.50 per passenger.

“Global and African geo-political and economic issues are beyond our direct control, but there are four pressing concerns in Africa posing obstacles to a healthy and strong aviation system that can and must be addressed by governments and industry stakeholders,” said Al Bakri.

The IATA chief noted that the value of intra-Africa connectivity cannot be overemphasised, adding that it is invaluable in promoting and supporting the continent’s growth.

“Implementation of Africa’s visionary framework for enhancing connectivity across the continent, as envisaged in the Yamoussoukro Declaration, has been slow. This needs to change,” said Al Bakri.

IATA welcomes the imminent launch of the Single Africa Air Transport Market (SAATM) by the African Union and urges governments and industry to fully embrace the project to unlock the full benefits of aviation in Africa.

“We have seen too many lost opportunities from an unconnected continent. The SAATM framework has the potential to transform Africa’s fortunes but it is up to governments and industry to get off the runway,” said Al Bakri.