FAAN: Transfer of 40% IGR to Govt affecting infrastructure upgrade

The Federal Airports Authority of Nigeria (FAAN), is having difficulty in maintaining its infrastructure spread across 26 airports in the country,
The agency’s woes, The Nation learnt are the result of dwindling financial resources and the application of the 40 per cent statutory transfer of Internally Generated Revenues (IGR) to the Federal Government in fulfillment of the Treasury Single Account (TSA) requirement for revenue generating agencies.

This has made it increasingly difficult for agency to carry out capital intensive projects the airport and undertake rehabilitation and upgrading works at the terminals, including providing airfield lighting, acquiring security equipment, among 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 several sources of aeronautical and non-aeronautical sources of generating revenue, it is handicapped because whatever it generates, the federal government takes 40 per cent from source through the TSA.

The former Managing Director of FAAN, Capt. Rabiu Yadudu said in the year 2022, FAAN remitted about N44 billion of its revenue to the federation account.

Yadudu said if FAAN was allowed to retain its IGR, the agency would have been able to plough-back the revenues into the sector for the purpose of infrastructure development as it is done in other parts of the world. He said FAAN is a self funding agency and has a workforce of over 8,000 whose jobs require constant training and retraining.

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. 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.

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.

FAAN is calling on the federal government to please review this policy because it is from the internally generated revenue that the organisation 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’s treasury.