New Telegraph

Expert seeks crude oil exchange solution for airlines’ trapped $818.2m

The Aviation Round Table (ART) President, Gabriel Olowo, has urged the Federal Government to consider a barter arrangement in its effort to settle the issue of the trapped $812.2 million foreign airlines’ funds.

According to him, the Central Bank of Nigeria (CBN) should discuss a barter arrangement with the affected airlines. Olowo’s position came days after the International Air Transport Association (IATA) Director General, Willie Walsh declared Nigeria as the highest indebted country to foreign airlines. He made the declaration at the ongoing 2023 Annual General Meeting of IATA in Istanbul, Turkey.

According to him, Nigeria has accumulated debts totalling $812.2 million belonging to over 30 foreign carriers. Olowo said the government can save the country from the embarrassing situation by opting for a barter arrangement with the airlines. The Sabre Network, West Africa, President suggested that the CBN should open discussions with the airlines on the probability of considering a barter arrangement option.

According to him, the apex bank could engage the home governments of the foreign airlines to work out the payment schedule through crude oil exchange if it is legitimate. He said Maj-Gen. Muhammadu Buhari’s government in 1985 exploited the same option with Brazil and a few other countries when the country was facing foreign exchange challenges. Olowo said: “This ever-growing airline home remittance and its attendant embarrassment on Nigeria by the 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. Gen. Muhammadu Buhari at his first coming did barter trade with Brazil and other countries.”

In a statement, IATA put the total trapped funds in the world at $2.27 billion as of April this year from the initial $1.55 billion in April 2022 representing an increase of 47 percent of what was obtained last year. Four countries also listed in the trapped funds’ issue are Bangladesh ($214.1 million), Algeria ($196.3 million), Pakistan ($188.2 million) and Lebanon ($141.2 million).
According to Walsh, the top five countries account for 68 per cent of blocked funds worldwide. He said rapidly rising levels of blocked funds as a threat to airline connectivity in the affected markets.

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