The Federal Airports Authority of Nigeria (FAAN) is cash strapped and cannot fund rehabilitation of airport facilities due to the deduction of 40 per cent of its Internally Generated Revenue by the federal government.
This was disclosed by former Deputy Director of Finance, FAAN, Philip Emeto who retired recently from the agency.
He said that FAAN found it extremely difficult to continue to maintain airport infrastructure and major projects, adding that the paucity of funds is also affecting the pensioners’ gratuities.
“FAAN 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 stipulations of the International Civil Aviation Organisation (ICAO).
“Although FAAN has many sources of aeronautical and non-aeronautical revenue, however, whatever it generates, the federal government takes 40 per cent from source through the Treasury Single Account (TSA) introduced by the federal government some years ago,” Emeto explained.
The immediate past Managing Director of FAAN, Capt. Rabiu Yadudu recently 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 ploughed back into the sector for the purpose of infrastructure development, as it is done in other parts of the world.
He stressed that FAAN is a self-funding agency of the federal government and has a workforce of over eight thousand staff, adding that aviation is an industry of skilled technical personnel whose job requires constant training and retraining.
THISDAY learnt that 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.
“With this 40 per cent deduction of the Internally Generated Revenue from some government agencies, it is now obligatory for the federal government to execute projects. This explains why some roads at the airports are in deplorable conditions and some major projects like erecting security and perimeter fencing at some airports under the management of FAAN are not being executed. There is an obvious paucity of funds,” Emeto said.
THISDAY also learnt that FAAN is poised to reduce the number of daylight airports in the country by installing airfield lighting, but this plan remains at the realm of planning because there is no money to fund such projects.
“The Federal Airports Authority of Nigeria is facing a huge financial dilemma because of the 40 per cent deduction of its revenue and this is because the same money needed to upgrade facilities, embark on training is what is remitted to government account.
“So, FAAN workers are calling on the federal government to please review this policy because it is from the internally generated revenue that FAAN pays its workers, maintain the airports and addresses infrastructure deficit, most of which are highly capital intensive.
“FAAN ought to constantly embark on training and retraining of its workforce, upgrade its security infrastructure and regularly maintain the runways among others, but doing all this is becoming increasingly difficult due to the fact that almost half of the agency’s revenue is remitted to the federal government treasury,” Emeto added.
