Nigeria and the Unrepatriated Funds Issue with IATA: A Troubling Situation
The aviation industry in Nigeria has recently gained significant global attention, but unfortunately, not for positive reasons. The state of the country’s aviation sector in recent years has been deeply concerning and problematic. Presently, there is a staggering $800 million held by foreign airlines operating in and out of Nigeria, which they are unable to repatriate. Shockingly, this amount is part of a larger sum of $2.2 billion, representing globally estimated blocked funds, with Nigeria topping the list of affected countries.
This grave situation has placed the airline industry in Nigeria in a highly tense and precarious position. As a result, we are witnessing ticket fare spikes and certain airlines reconsidering their operations in and out of the country. If these issues persist unchecked, we may face severe consequences, leading to the vulnerability of the industry and its potential collapse.
The root of this problem lies in capital flight and the absence of a viable domestic carrier that could have limited the outflow of capital from the country. Air Peace, a prominent Nigerian airline, has not yet reached a competitive level compared to foreign airlines operating in the country. Their international destinations have not consistently matched the competitiveness of other airlines serving Nigeria. To address this, Air Peace should focus on securing more profitable routes such as Heathrow, JFK International Air Terminal, Paris, and even Jeddah (for pilgrimage purposes). These routes have demonstrated high demand and profitability in Nigeria, although acquiring the necessary route licenses can be complex.
A significant number of local airlines that previously operated in Nigeria became unsustainable within a few years. Only a select few have managed to achieve sustainability and profitability. In my firm belief, Air Peace should have been given the first opportunity to operate the Nigeria Air flagship, rather than Ethiopian Airlines.
It is crucial that we address and resolve the issue of unrepatriated funds in Nigeria’s aviation industry promptly. By doing so, we can safeguard the stability and growth of the industry, ensuring better prospects for both domestic and international airlines operating within the country.