President Bola Tinubu of Nigeria has directed the Central Bank of Nigeria (CBN) to hold quarterly meetings with foreign airlines to address the issue of trapped funds exceeding $800 million. This directive was announced on Wednesday by Festus Keyamo, Minister of Aviation and Aerospace Development, at the ongoing African Aviation Summit in Abuja.
The issue of trapped funds has been a long-standing problem for foreign airlines operating in Nigeria due to the country's foreign exchange policy. Prior to the minister's directive, these airlines struggled to access their funds. The situation has led to discontent among international carriers, with Emirates Airlines reportedly boycotting Nigeria's airspace because of the issue.
In addition to addressing the trapped funds, President Tinubu has unveiled three roadmap projects aimed at transforming Nigeria into an aviation hub in Africa. These projects include an aerotropolis, an aircraft leasing company (ALC), and a Maintenance Repair and Overhaul (MRO) facility.
Keyamo emphasized that the government welcomes major players in aircraft leasing and head lessors to invest in Nigerian airlines, assuring them that contract agreements will be enforced and investor rights protected. He also mentioned that the CBN is open to providing tax holidays to encourage new entrants into the Nigerian aviation sector.
This move comes after Airbus predicted that Nigeria will need about 149 more aircraft by 2042 to meet international air travel demands. Joep Ellers, Airbus Representative in West Africa, revealed this during an interactive session with journalists in Abuja.
However, the International Air Transport Association (IATA) has criticized Nigeria over numerous charges imposed on foreign airlines operating within the country's airspace. IATA disclosed that as of May 2022, withheld funds by Nigeria increased by 12.5% month on month, making it one of the most indebted countries to foreign airlines globally. Other countries in Africa with similar issues include Algeria, Ethiopia, and Zimbabwe, who collectively owe foreign airlines a combined $271 million.
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