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Airlines: Nigeria exempted from $601m trapped funds

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 was missing from the list of countries that have kept foreign airlines’ funds.

The $601 million remain blocked in Africa across 17 countries including Algeria, Angola, Benin, Burundi, Central African Republic, Eritrea, Ethiopia, Equatorial Guinea, Malawi, Mozambique, Sudan, Gabon, Cameroon, Chad, Congo and Zimbabwe, putting further pressure on airlines as they struggle for survival.

Director-General of IATA, Willie Walsh, made the disclosure yesterday at a virtual “IATA Africa Briefing With Willie Walsh” in which New Telegraph participated in. According to him, “blocked airline funds are pretty high in Africa. I think it is about $601 million in Africa across 17 countries.

It is very much of 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. “In Africa, there are a number of countries that we 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 choice. People need to get access to markets.”

The stuck funds are proceeds of ticket sales made in local currency but blocked due to non-availability of foreign exchange to recoup it. And the release of the $601 million of airline revenue 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 liberalisation, 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,” he said. He equally carpeted the decision of ‘rich countries’ to stockpile vaccines while majority of the African continent are in dire need of it, stressing that recovery would 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 solution 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. Giving the success that we have, there is the need to have significant availability of vaccines not just to Africa but countries globally that can’t get vaccines.

It is very important, not just for the industry but for everybody.” Walsh further disclosed that globally, “we are the level of 20 per cent of people that have been vaccinated. Some countries are at 70 per cent range. Africa is at low single digit.

Vaccine is a key factor in the number of travel. In the absence of vaccine, 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 n it comes to risks management. There are a 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.”

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