This was disclosed by the Director-General of the International Air Transport Association, (IATA) Willie Walsh, during the African Airlines Association’s annual general assembly recently held in Cairo.
Walsh expressed disappointment that airlines’ funds continue to be blocked, stressing that this withholding is a major blow to the industry, as airlines have a fundamental right to repatriate their earnings from global ticket sales.
Foreign airlines operating in certain African countries struggle with ‘Blocked Funds,’ a phenomenon where they cannot repatriate their revenue from ticket sales due to a lack of foreign exchange. This is caused by depleted national reserves, making it impossible for governments to provide airlines with the necessary foreign currency.
The growing volume of inaccessible funds in some African nations has raised alarming concerns among member airlines.
As a result, many airlines are forced to adjust their operations, often by reducing flight frequencies or, in extreme cases, halting services to affected countries altogether.
“Airlines deliver huge social and economic benefits, but we are not charities. If airlines cannot repatriate their revenues, they cannot be expected to provide service, economies will suffer if connectivity collapses. So it is in everybody’s interest—including the government—to ensure that airlines can repatriate their funds smoothly. ” Walsh added.
The IATA boss revealed that the total blocked funds belonging to airlines stood at $1.662 billion. Out of this amount, African countries held back $950 million which is about 57% of the total blocked funds.
Walsh further noted that within Africa, the largest blocked amounts were in the Central African CFA Franc (XAF) and West African CFA Franc (XOF) zones where over $300 million is being withheld.
Airlines in Africa, and Nigeria in particular, have lamented the continuous blockage of their funds.
Nigeria for instance, was responsible for around $850m of blocked airline funds as of June 2023. Airlines were stranded in the country as a result of the country’s restrictive currency policies, making it impossible for international airlines to repatriate profits.
Some airlines were forced to reduce their operations, which severely impacted the country’s aviation industry while notable airlines like Emirates flatly suspended operations from Nigeria in August 2022.
In Africa as a whole, IATA reported a reduction of $708 million in blocked funds (28%) since December 2023, but continent-wide total blocked funds still stood at approximately $1.6 billion at of November 2024.
