The decision of the Federal Government to increase the contributions of aviation agencies to the Treasury Single Account, TSA, from 40 to 50 per cent has triggered fresh panic among operators.
Before now, there had been intense debates among experts over the government’s motive to force cost recovery agencies in the air transport sector into the TSA policy that demanded a 25 per cent deduction from their proceeds that later rose to 40 per cent.
Currently, the uproar over another 25 per cent increment in their remittances has taken an unprecedented twist, leading to panic among industry stakeholders.
Early this year, Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, in a circular dated December 28, 2023, had directed parastatals classified as “super agencies” to remit 50 per cent of their Internally Generated Revenues, IGR.
Edun stated that the development was to improve revenue generation, fiscal discipline, accountability, transparency in the management of government financial resources and the prevention of waste and inefficiencies.
Barely six months after the policy became effective, recent findings reveal that air transport may be under threat as the Federal Airports Authority of Nigeria, FAAN, Nigerian Airspace Management Agency, NAMA, and Nigerian Civil Aviation Authority, NCAA, were possibly cash-strapped and the long-term implications could be dire.
The development has even created a restive situation among unions in the industry, as they have resolved to embark on protest on the issue tomorrow.
Recently, Managing Director of FAAN, Mrs Olubunmi Kuku, lamented that though the agency is saddled with the responsibility of managing 22 airports across the country, the unviability of a whopping 19 airports and the current structure of contributing 50 per cent of its earnings into federal coffers is a major challenge to FAAN’s operation.
Capital-intensive projects, like upgrading of terminals, provision of airfield lighting, acquiring of security equipment and periodic runway maintenance among others are not only critical to the smooth running of airports in line with the stipulations of the International Civil Aviation Organisation, ICAO, but also require a huge amount of money. With the paucity of funds, it may be a hard task for the country’s airport manager to consistently execute.
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On countless occasions, Managing Director of NAMA, Engr Farouk Ahmed, had appealed for a reversal of the 50 per cent deduction, saying the agency’s ability to maintain advanced safety-critical equipment, recruit and train personnel to meet local and international safety standards as outlined by ICAO were hugely dependent on the resources at its disposal.
Not long ago, Farouk, who spoke at the agency’s headquarters in Abuja, said, “the safety of our airspace is paramount, and the current financial model is unsustainable. The 50 per cent revenue deduction hinders our ability to maintain and upgrade critical infrastructure, such as our obsolete surveillance systems, which are over a decade old and urgently need replacement.”
According to him, the current practice and net estimate of IGR are insufficient to cover recurrent and capital expenditures of NAMA.
Although not much has been heard from the Acting Director General of NCAA, Captain Chris Najomo, on the issue, Director of Public Affairs and Consumer Protection of the NCAA, Mr Michael Achimugu, had called for the agency’s exemption.
Achimugu, who termed the 50 per cent remittance worrisome, stated that it is affecting NCAA’s ability to effectively oversee the aviation industry.
According to him, the NCAA shares funds with other entities after remitting to government, leaving it with only 28 per cent of recovered costs, hindering its ability to oversee safety oversight and regulation.
Reacting, Mr Tunde Moshood, Special Assistant on Media and Communications to Minister of Aviation and Aerospace Development, Mr Festus Keyamo, noted that safety is one of Keyamo’s five-point agenda and will not be compromised, despite the 50 per cent TSA policy.
Moshood said: “NCAA, NAMA and FAAN have appealed to the government to remove them from the TSA policy.
“Aside from that, the agencies are exploring other means of increasing their fortunes. The minister is trying to speak to the government to exempt these agencies. Once there is an update on it, everyone will know. He is also intensifying efforts to ensure that the fortunes of the agencies are upgraded by all means. Safety is first in the minister’s five-point agenda, it remains sacrosanct.”
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