Dollar Shortages Causing Headache To Airline Operators In Africa
Fall in global commodity prices have caused massive dollar shortages across African economies.
But the biggest victims appear to be airlines operating out of the continent who are unable to repatriate their profits due to the dollar scarcity.
On Monday, the International Air Transport Association, IATA lamented that the global airline industry has $1.2 billion blocked in nine dollar-strapped African countries.
Low oil and mineral prices have reduced government revenue and caused chronic dollar shortages and immense pressure on local currencies in many African countries.
The fiscal slump has meant governments have not allowed foreign airlines to repatriate their dollar profits in full.
At an aviation meeting in the Rwandan capital, IATA’s Vice President for Africa, Raphale Kuuchi, said that airlines were in talks with “a few governments to unblock airline funds”.
He did not specify the companies that were affected.
“To do business effectively, airlines must be able to reliably repatriate their revenues. And that’s not the case in nine African countries: Angola, Algeria, Eritrea, Ethiopia, Libya, Mozambique, Nigeria, Sudan and Zimbabwe,” Kuuchi said.
Of the total of $1.2 billion, Angola has blocked the largest amount, $500 million, while Sudan has held up $200 million, another IATA official, Adefunke Adeyemi, told Reuters.
Last year Nigeria owed airliners $600 million, but as of October the amount had fallen to $221 million, she said.
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