Chinelo Obogo,[email protected]
The development of critical infrastructure in the aviation industry has been a major challenge and industry stakeholders have repeatedly berated the Federal Government for failing to provide an enabling environment for aviation businesses to thrive. However, lack of funds to carry out such critical projects has continued to stick out like a sore thumb.
Aviation Roundtable Initiative President, Dr. Gabriel Olowo, expressed concern that the country’s capital expenditure stands at 20 per cent, saying: “I am worried by intervention by government in the budget for 2020. Eighty per cent is for the recurrent, while 20 per cent is for capital expenditure, meaning that we have little or nothing for capital development. We have a deficit budget, meaning that we have element of debt; so, we are not able to provide what we need for road and security.”
The question to this festering problem has always been what the way forward should be. The Chairman, Committee on Aviation in the House of Representatives, Nnolim Nnaji, told journalists recently that the funds available in the budget and the Internally Generated Revenue (IGR) of the Federal Airport Authority of Nigeria (FAAN) and other agencies cannot solve the industry’s problems.
Section 12 of the 2004 Act shows that FAAN has the authority generate revenue from landing fees, parking fees, passengers service charge (local and international), rents, concession fees, VIP lounge charges, utilities, fuel charge, port charge, frontier service charge, sales of information, contract registration fees, rental of warehouse, rental of plants and equipment and fines.
For the Nigerian Civil Aviation Authority (NCAA), the industry’s regulator, a former commandant of the Murtala Muhammed Airport and chairman of Centurion Aviation Security and Safety Consult, Group Captain John Ojikutu, alleges that about N20 billion is lost or not accounted for annually by the agency from the five per cent charges on passengers tickets, cargo freight, and chartered flight fares.
“I have said it several times that about N20 billion is lost or not accounted for by the Nigerian Civil Aviation Authority (NCAA) annually from the charges of five percent on passengers tickets sales, cargo freight charges, and chartered flight fares changes.
“NCAA has not recorded less than two million outbound international passengers in any year between 2015 to 2017. Now imagine each of the international passengers including first and business classes passengers paying about N300,000, the earnings cannot be less than N600billion for international passengers alone still not considering the earnings on domestic passengers, cargo freight charges and chartered flights. The five percent charges on the intercontinental passengers tickets of N600billion cannot be less than N30billion,” he said. FAAN and other agencies remit 25 per cent of IGR to the Federal Government. But Nnolim says unless something drastic is done to address this funding problem through aggressive saving, there may never be sufficient funds to carry out the needed developmental projects.
He said: “The aviation industry is a very critical industry and the funds available in the budget cannot solve the problem that we have. The IGR of the Federal Airport Authority of Nigeria (FAAN) and other agencies cannot solve the problem. FAAN and other agencies remit 25 percent of IGR to the Federal Government and we are saying that instead of remitting the 25 percent to the FG, they can create a consolidated account where this 25 percent will be remitted into and form a committee that will do a 10-year developmental plan where they can site projects that can be done within a 10-year time frame.
“One of the problems we are having is that when a particular MD of an agency comes in, they would want to do a project and by the time he leaves and another MD comes in; he would also want to do another project. But if you have a 10-year developmental plan, it will outlive an MD and the plan would continue. That is why we are saying that critical aviation infrastructure should get a 10-year plan. Aviation is very critical now considering the fact that there is insecurity on the highways and the roads are bad, so the airport is the next port of call.
“Also, any investor that comes into Nigeria will first see the airport and once they see the environment, it will determine how much they think that they can invest and how serious they think that the country is. If the airport is good, they can double their investment but if it is not looking good, they will feel that the country is not serious and they may go back with their money or cut the amount they want to invest.
Most countries now are developing the non aeronautic aspects of the airports and that is where you have the hotels, offices, shops, malls, car parks etc. With that, we can be sure that they can double their investment.
“Most importantly, we need the Federal Government to put a lot of money in aviation because everything in the industry is expensive because they are all offshore components. You hardly see onshore components in the industry and they are dollar based and that is why the Federal Government needs to develop the infrastructure. Even the investors in the industry, they don’t invest in non aeronautics, they can invest in airplanes but the government has to invest in the critical infrastructure by developing it.
“We have had committees before but they have never talked about creating a consolidated account where 25 percent of IGR will be remitted, that is our campaign and we will continue to lobby at the National Assembly and put pressure on the ministry to come in fully into it so that all of us can push it. Outside that, the budgetary allocation is not enough, so we need to save and ensure that the Federal Government re-invests the funds in critical infrastructure.”
On the issue of the proposed concession of four major airports, he said:
“The issue of concession has been regarded as hearsay so far because, officially, we have not seen any documents on concession. We just hear about it in the media like others. Until we get the documents and study it at the committee level, then we can’t talk about it. It is the same situation with the issue of a national carrier. We don’t act on hearsay, we act based on the documents available to us.
“Officially, it is always better for such issues to be handled based on the available documents. On the issue of the second runway, we have it in the budget and funds have been provided for it but that particular amount will not be able to fully execute it. Enugu state government is doing a lot to ensure the completion of the runway and the land will not be a problem because he is the custodian of land in the state. He has said it many times that whatever land is needed to get the Enugu airport running will be provided. I believe that the runway will be ready by March.”