The International Air Transport Association (IATA), the clearinghouse for global airlines, disclosed that over $601 million of airlines’ funds are trapped in African countries; a situation that has negatively impacted carriers operating to the continent. Nigeria is missing from the list of countries that have kept foreign airlines’ cash. The countries blocking funds are Algeria, Angola, Benin, Burundi, Central African Republic, Eritrea, Ethiopia, Equatorial Guinea, Malawi, Mozambique, Sudan, Gabon, Cameroon, Chad, Congo, and Zimbabwe.
Director-General of IATA, Willie Walsh made the disclosure today at a virtual “IATA Africa Briefing With Willie Walsh” in which AirInsight participated.
According to him, “Blocked airlines funds are pretty high in Africa. I think it is about $601 million in Africa across 17 countries. It is very much a case of Africa as a continent probably has the most blocked funds around the world. We can see that it is a temporary blockage to get the funds repatriated. In Africa, there are a number of countries that have seen funds persistently blocked and it affects the decisions of the airlines to serve these markets and it is important for governments to understand the impact it can have on airlines especially on passengers that have fewer choices. People need to get access to markets”.
The stuck fund is proceeds of ticket sales made in local currency but blocked due to the non-availability of foreign exchange to recoup it. He noted that the release of the $601 million of airline revenues that are currently blocked from repatriation in certain governments would be an immediate boost in some markets.
The IATA chief further stated that Africa would benefit from liberalization which he opined would accelerate and give people the benefit of what aviation brings. We have seen that in other parts of the world and we will see it in Africa.
The Single African Air Transport Market (SAATM) which is a vehicle for achieving air liberalization is a flagship project of the African Union Agenda 2063, designed to create a single unified market for air transport in Africa. Once completely in force, the single market is supposed to allow significant freedom of air transport in Africa
He equally carpeted the decision of ‘rich countries’ to stockpile vaccines while the majority of the African continent are in dire need of it, stressing that recovery will be dependent on the vaccines which he described as very slow in Africa. According to him, “It is important that governments listen to the World Health Organisation (WHO). We have been very clear in terms of solutions to the pandemic and to make vaccines available so that globally, everybody can get access to the vaccines. We hope the vaccines in Africa are accelerated to go through 2022. It is not right that rich countries are stockpiling vaccines when there are countries that can’t get access. Given the success that we have, there is the need to have significant availability of vaccines not just to Africa but to countries globally that can’t get vaccines. It is very important, not just for the industry but for everybody”.
Walsh further disclosed that globally, “We are the level of 20 percent of people that have been vaccinated. Some countries are in the 70 percent range. Africa is at a low single-digit. Vaccines are a key factor in the number of travelers. In the absence of vaccines, sensible Antigen testing is allowed. We can’t tolerate situations where prices are high and we want to believe that governments understand the need for Antigen testing rather than the expensive and it comes to risk management. There are numbers that can be taken. The situation is improving and we have got to be optimistic and we will see that improve all year round”.