The International Air Transport Association (IATA) revealed on Thursday that as of September, airlines in Africa have $1.68 billion of funds locked, out of a global total of $2.36 billion.

This disclosure was made by Kamil Alawadhi, the Regional Vice-President for Africa and the Middle East, during the African Airlines Association 55th Annual General Assembly in Uganda.

Alawadhi highlighted the severe impact of this financial entanglement on connectivity and expressed concerns about the sustainability of the aviation sector.

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He emphasized IATA’s ongoing efforts to provide value to its members in navigating the challenging financial landscape.

Nigeria accounts for $783 million of the blocked funds, with only about 10% cleared. Despite recent efforts, a significant portion of these funds remains inaccessible to the airlines.

The Central Bank of Nigeria (CBN) has initiated steps to clear the forex backlog to commercial banks, but challenges persist in disbursing the funds effectively.

Alawadhi noted that since 2018, a significant amount of blocked funds has been repatriated from Angola, Ethiopia, Ghana, Nigeria, and Zimbabwe through collaboration with respective governments.

However, $1.68 billion in airline funds still remains blocked across the continent.

He stressed the importance of liberating blocked airline funds and advised governments on best practices to clear backlogs.

The repercussions of blocked funds extend beyond the airlines, negatively impacting the economies of the countries involved.

This includes reduced connectivity, diminished investor confidence, and damage to the country’s reputation.

Recognizing aviation as a pivotal economic enabler, Alawadhi urged governments to prioritize sustainable solutions for clearing blocked funds.

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As Africa’s aviation industry strives to recover from pandemic-induced losses, IATA advocates against imposing additional financial burdens, such as higher fees, levies, carbon taxes, or new taxes on air transport, trade, or tourism.

Such measures could exacerbate existing challenges and make air travel more expensive and less accessible in Africa.