Blocked funds: Bangladesh, Lebanon, Nigeria top countries as trapped money hits $601 million in Africa

 

  • IATA faults stockpiling of vaccines by rich nations while continent lacks
  • Wants Govts’ to listen to WHO

 

 

The International Air Transport Association (IATA) , the clearing house for global airlines, has disclosed that over $601 million of airlines funds are trapped in some African countries; a situation that has negatively impacted carriers operating into the continent.

Nigeria is listed among the countries that are keeping foreign airlines’ funds. On top of this $601 million  funds remain blocked in Africa across 17 countries.

The countries are Nigeria ($155 million), Algeria ($51 million), Angola ($7 million), Benin, Burundi ($2 million), Central African Republic, Eritrea ($78 million), Ethiopia ($61 million), Equatorial Guinea, Malawi ($4 million), Mozambique ($13 million), Sudan ($57 million), Gabon, Cameroon, Chad, Congo and Zimbabwe, putting further pressure on airlines as they struggle for survival.

Nigeria is third country with the highest amount of airlines’ trapped funds in the country, only better than Bangladesh with $186 million followed by Lebanon with a total of 4176 million.

Director-General of IATA, Willie Walsh made the disclosure today at a virtual “IATA Africa Briefing With Willie Walsh” in which Aviation Metric participated.

According to him, “Blocked airlines funds are pretty high in Africa. I think it is about $601 million in Africa across 17 countries. It is very much a case of Africa as a continent probably has the most blocked funds around the world. We can see that it is a temporary blockage to get the funds repatriated.

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“In Africa, there are a number of countries that have seen funds persistently blocked and it affects the decisions of the airlines to serve these markets and it is important for governments to understand the impact it can have on airlines especially on passengers that have fewer choices. People need to get access to markets”.

The stuck fund is proceeds of ticket sales made in local currency but blocked due to the non-availability of foreign exchange to recoup it.

 

IATA Director-General, Willie Walsh

And the release of the $601 million of airline revenues that are currently blocked from repatriation in certain governments would be an immediate boost in some markets. Governments will need a financially viable air transport sector to energise economic recovery from COVID-19.

The IATA chief further stated that Africa would benefit from liberalization which he opined would accelerate and give people the benefit of what aviation brings. We have seen that in other parts of the world and we will see it in Africa.

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One of the banes of Africa’s underdeveloped air transport industry has been attributed to lack of liberalization in the air transport sector.

Although the aviation industry is increasingly becoming important for Africa’s economic development and integration, the ability of airlines to access foreign markets remains hindered by restrictive regulatory policies. Attempts have been made to fully liberalize the intra-African air transport market.

The Single African Air Transport Market (SAATM) which is a vehicle for achieving air liberalization is a flagship project of the African Union Agenda 2063, designed to create a single unified market for air transport in Africa. Once completely in force, the single market is supposed to allow significant freedom of air transport in Africa

He equally carpeted the decision of ‘rich countries’ to stockpile vaccines while the majority of the African continent are in dire need of it, stressing that recovery will be dependent on the vaccines which he described as very slow in Africa.

According to him, “It is important that governments listen to the World Health Organisation (WHO). We have been very clear in terms of solutions to the pandemic and to make vaccines available so that globally, everybody can get access to the vaccines”.

“We hope the vaccines in Africa are accelerated to go through 2022. It is not right that rich countries are stockpiling vaccines when there are countries that can’t get access. Given the success that we have, there is the need to have significant availability of vaccines not just to Africa but to countries globally that can’t get vaccines. It is very important, not just for the industry but for everybody”.

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Walsh further disclosed that globally, “We are the level of 20 percent of people that have been vaccinated. Some countries are in the 70 per cent range. Africa is at low single digit. Vaccines are a key factor in the number of travelers. In the absence of vaccines, sensible Antigen testing is allowed”.

“We can’t tolerate situations where prices are high and we want to believe that governments understand the need for Antigen testing rather than the expensive and it comes to risk management. There are numbers that can be taken. The situation is improving and we have got to be optimistic and we will see that improve all year round”.

Wole Shadare