Business
Aviation agencies bleed over 40% remittance to FG
Aviation agencies are said to be suffocating under the heavy burden of 40% remittance to the federation account.
This is just as some of the agencies are advocating for removal from the Treasury Single Account (TSA) to meet urgent training requirements and infrastructural upgrades.
Findings by our correspondent revealed that the Federal Airports Authority of Nigeria (FAAN), which is currently managing 26 airports, is cash-strapped.
The agency is finding it increasingly difficult to carry out capital-intensive projects like airport infrastructure rehabilitation, upgrading the terminals, providing airfield lighting, acquiring security equipment, and many others that are critical to the smooth running of airports in line with the requirements of the International Civil Aviation Organisation (ICAO) with their remaining 60 per cent income as well as pay salaries.
This is just as the Nigerian Airspace Management Agency (NAMA) said the current 40 per cent deduction is suffocating, not only the agency but also the entire industry, noting it would also help the industry if aviation is removed from TSA.
Though FAAN has many sources of aeronautical and non-aeronautical revenue, whatever it generates, the federal government takes 40 per cent from the source through the Treasury Single Account (TSA) introduced by the federal government years back.
The immediate past Managing Director of FAAN, Capt. Rabiu Yadudu, disclosed that in the year 2022, FAAN remitted about N44 billion of its revenue to the federation account.
Capt. Yadudu noted that such deductions contravened the new FAAN Act 2022, which stipulates that all revenue generated by the agency must be reinvested for infrastructure upgrades as it is done in other parts of the world.
The federal government had in October 2012 increased the compulsory contribution to the federation account by its revenue-generating agencies to 40 per cent from 25 per cent.
A retired deputy director with FAAN, Philip Emeto, called on the federal government to review the policy because “it is from the internally generated revenue that FAAN pays its workers, maintains the airports and addresses infrastructure deficit, most of which are highly capital intensive.
Speaking with newsmen at the weekend, the Managing Director of NAMA, Mohammed Odunnowo, said the agency is facing extreme financial difficulty over the 40 per cent deduction as well as the TSA.
“Eliminating this deduction is crucial for our thriving,” he said, adding that the agency had not increased its charges in the last 10 years despite the inflation.
He said instead of the 40 per cent deduction, Nigeria should take a cue from the United States Federal Aviation Administration (FAA) which created the Airport and Airway Trust Fund (AATF) to provide a dedicated source of funding for the aviation industry.
“We are bleeding. We are being owed a lot of money. For an hour extension in Ilorin Airport, we charge N50,000. They don’t have light, we run generators and the least generator we run there is like 250 to 500 KVA. If you run that for an hour, how much do you think this would consume?