President of the Aviation Round Table (ART), a body of different professionals in Nigeria’s aviation sector, Elder Gbenga Olowo has called on the Federal government to consider the barter arrangement option for settling the $812.2 million of the foreign airlines trapped in Nigeria.
Olowo’s position is coming days after the Director General of International Air Transport Association (IATA), Willie Walsh declared Nigeria as the highest indebted country to foreign airlines.
The IATA DG revealed this at the ongoing 2023 Annual General Meeting of IATA in Istanbul, Turkey.
According to IATA, Nigeria has on its neck a whopping accumulated debt of $812.2 million belonging to the over 30 foreign carriers operating in Nigeria which presently got trapped.
In his reaction, the ART President is therefore, calling on the government to seek a barter arrangement option to settle the debts.
Through this option, Olowo said the government will be removing the name of the country from the embarrassing situation.
The President of Sabre Network, West Africa, further suggested that the Central Bank of Nigeria (CBN) should open a discussion with the affected airlines on the probability of considering a barter arrangement option.
According to him, the Nigeria apex banking body could engage the governments of the home countries of the foreign airlines individually to work out the payment schedule through crude oil exchange if it is legitimate.
Olowo who said this would not be the first time Nigeria will be using this option,recalled how Nigeria under the regime of Major General Muhammadu Buhari, retired, in 1985, exploited the same option with Brazil and a few other countries when the country was faced with foreign exchange crises.
Olowo declared: “This ever growing airline home remittance and its attendant embarrassment on Nigeria by the International Air Transport Association (IATA), will it be out of place to think of barter?
“Engage the individual governments of these airlines if they will pay the airlines in exchange for our crude oil if it is legitimate. General Muhammadu Buhari at his first coming did barter trade with Brazil and other countries”.
In Istanbul, IATA said foreign Airlines trapped funds across the globe has increased to $2.27 billion in April 2023 from the initial $1.55billion in April 2022 representing an increase of 47 percent of what was obtained last year.
Other top five countries listed alongside Nigeria include: Bangladesh with $214 million debts.
Others are: Algeria with $196.3 million, Pakistan with $188.2million and Lebanon with $141.2 million.
The debts the IATA DG said accounted for 68.0% of blocked funds.
Walsh who described the rapidly rising levels of blocked funds as a threat to airline connectivity in the affected markets, remarked:“Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets. Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity.”