Al-Awadhi highlighted that while blocked funds remain a persistent challenge across the AME region, substantial improvements have been observed in several nations, including Nigeria, Egypt, and Ethiopia. "Significant improvements have been made in Nigeria, Egypt and Ethiopia over the last year, with Nigeria no longer on the list of blocked funds countries," the vice-president stated.
Despite this positive news for Nigeria, the AME region continues to bear the brunt of global blocked funds. Mozambique currently holds the unenviable position of withholding the largest amount globally, followed by the XAF Zone (comprising Cameroon, Central African Republic, Chad, Republic of the Congo (Congo-Brazzaville), Equatorial Guinea, and Gabon), Algeria, and Lebanon.
As of April this year, the total amount of withheld airline revenue globally stood at $1.28 billion, a decrease from $1.7 billion reported in October 2024. Of this global total, a staggering $1.1 billion—representing 85 percent—is trapped in Africa and the Middle East, with African countries alone accounting for $919 million. A detailed breakdown provided by the IATA official revealed that the countries with the highest amounts of blocked funds in the AME region as of April include Mozambique ($205 million), the XAF Zone ($191 million), Algeria ($178 million), Lebanon ($142 million), and Angola ($84 million).
Call for Prioritizing Aviation in FX Access
Al-Awadhi strongly emphasized the critical importance of consistent cash flow for the sustainable operation of airlines, lamenting the severe impact of unrepatriated revenues. He explained that when airlines are unable to repatriate their funds, it significantly impedes their operational capacity and restricts their ability to serve various markets.
"Reduced air connectivity hampers countries’ competitiveness, diminishes investor confidence and labels countries as a high-risk place to do business," Al-Awadhi warned. He further asserted that strong air connectivity acts as a powerful economic enabler, generating considerable economic and social benefits. Consequently, IATA has issued a call to governments worldwide, urging them to prioritize the aviation sector in their allocation of foreign exchange, recognizing air connectivity as a vital economic catalyst for any nation.
For many years, the issue of blocked funds had been a contentious point of dispute between Nigeria and international air carriers. In 2023, Nigeria faced the distinction of withholding the largest amount of airlines' revenue globally, a direct consequence of a chronic foreign exchange (FX) shortfall that affected numerous industries. This led to significant repercussions, with some aviation companies suspending operations in Nigeria and international travel agents being prevented from issuing local tickets.
In an effort to mitigate the crisis, the Central Bank of Nigeria (CBN), under its former governor Godwin Emefiele, released $265 million to airlines in 2022. Disbursements continued under the current administration, with an additional $61.64 million, demonstrating Nigeria's renewed commitment to clearing its outstanding FX backlog, which was estimated to be around $7 billion. A major breakthrough occurred in March 2024 when the CBN announced that it had successfully cleared the FX backlog. IATA subsequently confirmed this positive development, stating that Nigeria had cleared 98 percent of its blocked airlines' funds. The last reported figure for blocked funds in Nigeria was approximately $850 million.
What further steps do you think the Nigerian government should take to ensure this positive trend of zero blocked funds for airlines continues?