The International Air Transport Association (IATA) has raised concerns over several countries preventing airlines from repatriating their earnings, a situation that significantly impacts the global aviation industry.
As of October 2024, $1.7 billion in airline funds remain blocked, although this reflects a slight improvement compared to $1.8 billion in April 2024.
Regional Trends in Blocked Funds
IATA highlighted reductions in blocked funds in countries like Pakistan, Bangladesh, Algeria, and Ethiopia over the past six months.
However, the organization noted a troubling rise in blocked funds in the XAF and XOF monetary zones and Mozambique.
- XAF Zone: Includes Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea, and Gabon.
- XOF Zone: Includes Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal, and Togo.
Nigeria Exits the List
Nigeria has successfully resolved its issues with blocked aviation funds. In January 2024, the Central Bank of Nigeria (CBN) announced the settlement of around $800 million in foreign exchange (forex) obligations owed to international airlines.
This development underscores Nigeria’s commitment to resolving forex challenges and rebuilding confidence in its aviation sector.
IATA’s Response
Willie Walsh, IATA’s Director General, described the issue as a “frustrating game of whack-a-mole” and called on governments to uphold international agreements to facilitate the smooth repatriation of airline revenues.
“No country wants to lose aviation connectivity, which drives economic prosperity. But if airlines cannot repatriate their revenues, they cannot be expected to provide a service. Economies will suffer if connectivity collapses,” Walsh emphasized.
The following table provides a breakdown of countries with blocked funds and the duration of withholding:
| S/N | Country/Region | Amount ($ Million) | Months Withheld |
|---|---|---|---|
| 1 | Pakistan | 311 | 48 |
| 2 | XAF Zone | 235 | 60 |
| 3 | Bangladesh | 196 | 47 |
| 4 | Algeria | 193 | 24 |
| 5 | Lebanon | 142 | 60 |
| 6 | Mozambique | 127 | 47 |
| 7 | Angola | 80 | 36 |
| 8 | Eritrea | 75 | 96 |
| 9 | XOF Zone | 73 | 12 |
These nine regions account for 83% of the total blocked funds, with African countries holding approximately $1 billion, representing 59% of the global tally.
IATA observed notable progress in reducing blocked funds in Algeria (from $286 million in April to $193 million) and Ethiopia (from $149 million in April to $43 million). However, increases were recorded in:
- XAF Zone: +$84 million
- Mozambique: +$84 million
- XOF Zone: +$73 million
The issue of blocked aviation funds remains a pressing challenge for the global aviation industry, particularly in Africa and South Asia.
While progress has been made in some regions, further efforts are needed to ensure airlines can repatriate their earnings seamlessly, safeguarding connectivity and supporting economic prosperity worldwide.
