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Currency Restrictions Hurting Airlines Operating In Africa - See more at

Published 2016/06/09, 14:57
Updated 2023/07/09, 12:32
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Increased currency restrictions by African central bankers are hurting airlines operating on the continent by making it difficult to move their funds in and out of a number of countries, including Nigeria and Angola.

Already two international airlines, U.S.-based United Airlines and Spain-based Iberia, have halted operations in Nigeria or cut flights as they struggle to access revenue they’ve made in the West African nation, Bloomberg reported.

Other top carriers, including Air France, British Airways, Virgin and Emirates have been affected by currency controls introduced by the Central Bank of Nigeria (CBN) to support the local currency, naira, and stop is from plummeting as the oil-producing nation struggles with lower oil prices.

Nigeria is the largest Crude Oil producer in Africa and the revenue from the commodity account for more than 70 percent of the country’s annual budget financing.

Airlines operating in other oil producing countries on the continent including Angola and South Sudan have also been affected by currency restriction by regulators in those countries.

Kenya Airways, one of Africa’s leading carriers, revealed earlier this week that it has over $25 million in blocked funds in Nigeria, South Sudan and Angola among other countries due to foreign exchange constraints, CNBC Africa reported.

Air Namibia, which also has undisclosed amount of its revenue held up in Angola, said its operation in the neighboring country will not be affected by the blockage, but it was working to retrieve the monies in due course.

‘Currency Restriction’

Angola, Africa’s second largest oil producer, has been facing a severe shortage of foreign currencies.

The International Air Transport Association (IATA) estimates that Angola, which is listed among the top five nations that have blocked airline revenues, has for the last seven months held about $237 million belonging to various airlines operating there.

At its annual general meeting in Dublin, Ireland last week, IATA called on all governments to respect international agreements obliging them to ensure airlines are able to repatriate their revenues.

“The airline industry is a competitive business operating on thin margins. So, the efficient repatriation of revenues is critical for airlines to be able to play their role as a catalyst for economic activity,” New Era quoted IATA director general and CEO Tony Tyler saying during the AGM.

“It is not reasonable to expect airlines to invest and operate in nations where they cannot efficiently collect payment for their services.”

IATA monitors blocked funds globally, the sum of which exceeds $5 billion. The top two countries blocking the repatriation of airline funds are Venezuela and Nigeria.

Egypt is also the other African country that has blocked airlines from moving their revenue from its jurisdiction.

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