Sequel to the last intervention by the Central Bank of Nigeria (CBN), foreign airlines and travel agencies have made a fresh appeal for a structured plan to fully defray $751 million outstanding stuck fund in Nigeria.

The stakeholders, though acknowledged the federal government’s commitment that led to the release of $61 million recently, they said the piecemeal approach fell short of expectations from the aviation sector in Nigeria.

It would be recalled that the CBN recently disbursed $61.64 million to foreign airlines through various Deposit Money Banks (DMBs). Acting Director, Corporate Communications, Hakama Sidi-Ali, said the disbursement was in fulfilment of CBN’s commitment to eliminate the backlog of pending matured foreign exchange in DMBs.

Foreign airlines, under the aegis of International Air Transport Association (IATA), have consistently bemoaned the complicated foreign exchange liquidity crisis that has kept foreign airlines’ funds, from ticket sales in Nigeria, to the tune of $812 million, trapped in Nigeria. Of the sum, $300 million is legacy debt of the CBN.

President of the Association of Foreign Airlines in Nigeria (AFARN), Kingsley Nwokoma, said the FX liquidity crisis had protracted without a clear-cut settlement plan from the federal government.

Nwokoma warned that if the crisis continued to drag, some of the airlines might as well exit the country, after the likes of Etihad and Emirates Airlines.

He regretted that the Federal Government violated the Bilateral Air Service Agreement (BASA) arrangements signed with the various countries, and a dent on Nigerian image.

He said the blocked funds is partly the reason airfares out of Nigeria are high, and the local sector in comparative disadvantage with West African neighbours.

Nwokoma said: “We are not saying the government should pay all, but the FG should have a plan to pay a chunk of the money every quarter. The fear is that if it continues like this, some of the airlines may go.

“The last conversation we had with Mr Festus Keyamo, the Minister of Aviation and Aerospace Development, seemed good. He sounded serious about the payment, and they have done $61 million thus far.

“But Nigeria is just a very strange country. Some are still saying that the airlines should not be asking for any money from Nigeria. What is BASA? BASA is signed by countries and not airlines. We signed our commitment to the BASA and we are not doing anything about it.

“If all countries are defaulting like Nigeria, there will not be any airline that comes into the country again. The aviation industry is predicated on the U.S. dollars. You pay your catering, handling, hotel, and a lot of things in dollars and if you don’t pay, your crew would be sent out,” he said.

The president urged FG to discuss with the foreign airlines on the modes of payment and timelines for the release of blocked funds to restore confidence.

IATA had lately disclosed that $1.68 billion in airline funds remain blocked across the continent, with Nigeria taking the lead. The backlog is despite repatriation from Angola, Ethiopia, Ghana, Nigeria, and Zimbabwe through IATA’s working with the respective governments.

Group Managing Director, Dees Travels and Tours Limited, Daisi Olotu, said the oddly familiar tag of a debtor country is neither in the interest of Nigeria nor a critical sector like aviation.

Olotu noted that the aviation sector is a revenue cash-cow for any country, but the delay in the release of funds for the repatriation of the earnings of foreign airlines is the undoing of the local aviation sector.

He said besides the high airfares, the downstream sector, notably the travel agencies, and service and hospitality establishments, bear the brunt and face imminent closures because of the loss of businesses every day.

Olotu said: “Nigeria has over 5,000 travel agencies. Imagine the number of Nigerians, who will be out of jobs as a result adding to the already overpopulated labour market. Additionally, the government stands to lose substantial revenue from taxes that are paid by these agencies, adding to the economic crises the country is facing.

“It is against this backdrop that we appeal to the Nigerian government to find ways to resolve this problem. The release of $61 million falls short of the $812 million trapped funds. Immediate action is crucial to prevent further deterioration of the aviation industry and its alarming effect on the country’s economy,” he said.