Ethiopian Airlines (ET, Addis Ababa International) will gain access to unrepatriated hard currency earnings withheld in Nigeria after the central banks of Ethiopia and Nigeria agreed to swap USD100 million in blocked funds, reports The Reporter newspaper.
The deal involves swapping Ethiopian's Nigeria-based funds with those of Nigerian multinational Dangote Cement in Ethiopia, as both companies have struggled to repatriate profits amid forex shortages in both countries.
The swap enables Ethiopia to access funds blocked in Nigerian banks, including large amounts owed to Ethiopian Airlines, while Nigeria gains access to money held up in Ethiopia through Dangote Cement.
Ethiopian Airlines reportedly exchanged USD100 million of USD180 million in blocked funds in Nigeria for Ethiopian birr from Dangote Cement. “The National Bank will pay us the equivalent swapped amount in birr,” Ethiopian Airlines Chief Executive Officer Mesfin Tassew told The Reporter, adding there were no plans to swap the remaining amount.
The airline was not immediately available for comment.
The International Air Transport Association (IATA) has warned that rapidly rising levels of blocked funds threaten airline connectivity in affected markets. The industry’s blocked funds have increased by 47% to USD2.27 billion in April 2023 from USD1.55 billion in April 2022.
Nigeria tops the list of culprits, currently withholding USD812.2 million of airline funds from the sale of tickets, cargo space and other activities. Next is Bangladesh with USD214.1 million in blocked funds, Algeria with USD196.3 million, Pakistan with USD188.2 million, and Lebanon with USD141.2 million, according to IATA statistics.
