By Chinelo Obogo
The Federal Government has settled the $850 million outstanding debt owed European airlines, the European Union (EU) has revealed.
The EU Ambassador to Nigeria and the ECOWAS, Samuela Isopi, revealed this during the ongoing 9th edition of the Nigeria-EU business forum in Abuja.
The forum which had ‘Investing in Jobs and a Sustainable Future’, as theme, had in attendance the Director-General at the EU, Myriam Ferran, the Minister of Budget and National Planning, Atiku Bagudu, and the Permanent Secretary at the Ministry of Industry, Trade, and Investment, Ambassador Nura Rimi.
Isopi commended the government for its intervention in clearing the backlog, stating that a key condition for any foreign investor is the ability to repatriate profits.
“A year ago, these funds amounted to $850m, with a big chunk being owned to European airlines. Today more than 98 percent of arrears have been cleared. This is a major achievement,” Isopi said.
She also commended the removal of foreign exchange restrictions on the import of 43 items. She said Nigeria is EU’s largest trading partner, with about 35 billion euros in trade relations in the previous year.
Isopi also pointed out that Nigeria is the EU’s biggest foreign investor, with a stock estimated at 26 billion euros, representing one-third of Nigeria’s foreign direct investment. She also revealed that over 230 EU companies operate in Nigeria, providing jobs for youths and women.
The International Air Transport Association (IATA) had earlier in June revealed that the Central Bank of Nigeria (CBN) has cleared 98 percent of funds trapped in Nigeria which accumulated from ticket sales by foreign airlines.
The aviation body reported a 28% decrease in the amount of airline funds blocked from repatriation by governments showing that total blocked funds at the end of April stood at approximately $1.8 billion, a reduction of $708 million (28%) since December 2023.
The body said the main driver of the reduction was a significant clearance of funds blocked in Nigeria, while reiterating the call for governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities in accordance with international agreements and treaty obligations.
IATA stated that at its peak in June 2023, Nigeria’s blocked funds amounted to $850 million, significantly affecting airline operations and finances in the country. The body said carriers faced difficulties in repatriating revenues in US dollars, and the high volume of blocked funds led some airlines to reduce their operations and one carrier to temporarily cease operations to Nigeria, which severely impacted the country’s aviation industry. However, as of April 2024, it said 98% of these funds have been cleared, while the remaining $19 million is due to the Central Bank’s ongoing verification of outstanding forward claims filed by the commercial banks.
