Saturday, September 23, 2023
NewsEthiopia's dollar drought leaves airlines high and dry

Ethiopia’s dollar drought leaves airlines high and dry

The International Air Transport Association (IATA) has urged the Ethiopian government to promptly release USD 95 million in blocked airline funds to ensure the country’s air connectivity is not threatened. Airlines have a right to repatriate revenues under international agreements, but IATA says Ethiopia needs to follow the global rules it benefits from.

Ethiopia has long struggled with a hard currency shortage as the modest growth in its foreign exchange earnings has failed to match the surge in payments for imports and other external expenditures, widening the country’s current account deficit.

While the East African nation has seen some increase in hard currency inflows from exports, remittances and other sources, the inflows have failed to keep up with the rapid climb in necessary outflows for essential goods and services, exacerbating the shortage of dollars, euros and other international currencies.

The hard currency squeeze has strained Ethiopia’s economy for years, hampering its ability to grow and develop—a situation now reflected in the aviation sector.

The Ethiopian government and central bank have allocated too little dollars to the aviation industry, blocking USD 95 million in airline funds in the country, according to Willie Walsh, IATA’s Director General. “It is time for the government to work with the industry to resolve this situation quickly,” said Walsh.

- Advertisement -

Ethiopia's dollar drought leaves airlines high and dry | The Reporter | #1 Latest Ethiopian News Today

Ethiopia’s blockage of airline funds risks undermining the economic and social benefits of Ethiopia’s aviation sector, which supports the country’s development. IATA has called on Ethiopia’s government to work with the aviation industry to resolve the situation.

“While our operations and milestones continue to be persistent, we still have challenges repatriating our accumulated funds in various countries. As of today, we have more than $180 million stranded in several countries. Repatriating funds remains a critical challenge for airlines,” said Ethiopian Airlines Group CEO Mesfin Tasew.

Ethiopian Airlines registered six billion dollars in revenue in the 2022/23 fiscal year, including a 12-month budget estimate. It is a 20 percent annual increase, reflecting strong growth at Ethiopian.

- Advertisement -



More like this

Tigray officials demand redesigned transitional justice model

Officials at the Tigray Interim Administration (TIA) reject the...

Controversial property tax proposes selective exemptions

Controversial property tax draft exempts religious institutions and small residences, with eligibility determined by the Finance Ministry based on services rendered. Stakeholders will gather on September 25 to deliberate upon the implications of the draft proclamation.

Yayu Fertilizer transferring reaches 85% after years of delay

Transferring of the long-stalled Yayu fertilizer project, originally awarded to MetEC, has finally made progress, reaching 85% completion. Despite challenges, the transfer to the Chemical Industry Corporation (CIC) is underway. However, the retrieval of 25 containers and compensation for displaced farmers remain unresolved issues, demanding prompt attention.

Nigeria’s leadership transition stalls Ethiopian airlines’ ambitious partnership

With a proven track record of successful collaborations across the continent, Ethiopian Airlines Group eagerly awaits the nod from Nigeria's new government to advance its partnership with Nigerian Air, demonstrating its unwavering commitment to uplifting Africa's aviation sector.