By Chinelo Obogo
Experts who spoke at the FNAC also condemned the 40 percent revenue generation which aviation agencies remits to the federation account, describing it as unsustainable.
The Managing Director of FAAN, Capt. Rabiu Yadudu, revealed at the conference that the agency contributed N44 billion of its revenue to the federation account in 2022 and that this is having a negative effect on the performance of the agency.
He also revealed that this contribution contravenes the new FAAN Act 2022, which stipulates that all revenue generated by the agency must be ploughed back into the sector for the purpose of infrastructure development.
The FG increased the compulsory contribution to federation account by its revenue generating agencies to 40 percent in October 2022 and the agencies affected by this policy are; FAAN, Nigerian Air-space Management Agency (NAMA), Nigerian Civil Avi-ation Authority (NCAA) and the Nigerian College of Avi-ation Technology (NCAT), Zaria.
Yadudu appealed to the FG to remove FAAN from the contribution to the federation account in order to address infrastructure gaps. He said such exemption is in line with international standards and recommended practices. He said that cost of its commodities and products like diesel have skyrocketed, making it difficult to carry out day to day operations.
“Talking about government policy, right now, we have 40 percent of our revenue being deducted at source. Finance is about 99 percent of the challenges we are facing in the indus-try. Last year, about N44 bil-lion of our revenue went to the federation account. The price of diesel has increased to N1, 150 per litre from N400 we were buying it about a year ago. Now, we have our own Act. With this, FAAN should not be sending any percent-age of its revenues to the federation account,” he said.
Also, the Managing Director of Af-ri-Air International Limited, Capt. Sheu Iyal, a fixed based operating company, said that the compulsory contribution of 40 percent revenues of aviation agencies to the federation coffers would have a negative effect on their performance.
He said that the survival rate of the agencies is slim and appealed to the Federal Government to reverse the policy for the growth of the agencies. Iyal explained that avia-tion is not for profit making, rather for national security, stating that such deduction may distract them on the long run.
“If FAAN uses 40 percent of its revenue and the government takes it, how do they want them to be able to run it? So, there is a need to talk to the government. There is a need for the gov-ernment to realise that avi-ation is more than business, aviation is a component of national security.
“So, there is no reason our airports and airlines should have the kind of problems we are having today because aviation is a component of national security. So for whatever reason, we must find a way of helping them to survive. Then, we talk about sustainability. This is in two stages, but if we want to car-ry the two of them together, fine. We must realise that there is a need for survival,” he said.