Saturday , 13 August 2022

Audit IGR of NCAA, other agencies to justify forex concession to foreign airlines

Many Nigerians would welcome the decision of government to commence the audit of its parastatals. Apart from providing government the means of assessing the true and aggregate sources of public agencies IGR, this act will also revive the institution of fiscal discipline; ensure transparency and accountability in the management of public finance; curb wastages of public fund and reduce corruption in the government agencies financial management system.

The Nigerian Civil Aviation Authority, Federal Airport Authority of Nigeria and Nigerian Airspace Management Agency are some of government public agencies that need the audits more because of the large-scale wastages and corruption that have characterized the management of their Internally Generaed Revenue,IGR and finances over the years.

There should not have been serious concern about auditing these public agencies IGR if the NCAA has shown compliance to the NCARs Economic Regulation in its oversight of the IGR of the public and private operators.
You will find at Annex A, some of the major sources of these agencies Expected IGR. At Annex B, are extracts from Annex A that contain information on the Expected Foreign Exchange earnings by the aviation public agencies in their IGR. These earnings could help the responsible authorities in the Ministry of Finance and CBN to take informed decisions, on whether or not foreign airlines could be given foreign exchange concession to transfer their sales earnings to their home office. This could cause some airline to rescind their decision to stop their operations into Nigeria.
You will discover at the end of your assessment of these agencies IGR that the problem of the Nigeria aviation public agencies is really not the lack of funds and necessarily the need for foreign exchange. The problem of the industry is acute wastages of IGR and corruption. Seriously, foreign airlines should be given considerable concessions to repatriate their earnings to their home office if we consider that they make payment for the services provided them by government agencies in foreign exchange. See details of foreign exchange payments in Annex B. However, should CBN decide to extend stringent foreign exchange policy on foreign airlines, they should therefore in return be allowed to pay in Naira for the services provided to them by government services providers [NCAA, FAAN and NAMA] and for Royalties on BASAs and Commercial Agreements.
Annex A
The Agencies IGR from over 22 Airports will include the followings from:
a. Federal Airport Authority of Nigeria [FAAN].
i. Airport Service charge on both Domestic and International Passengers [over 14m in 2010].
ii. Airport Service charge on all cargo import and export [over 300m kg in 2013].
iii. Aircraft Landings and Parking Charges [over 400,000 air traffic]. Between $400.00 for Boeing 737 to $630 for B-757, $2120 for B-767, $3,130 .for B-777, $3,380 for Air Bus 340
iv. Airport Tax on fuel Sales [over 1trn litres in 2013].
v. Car Parks and Toll Gate Fees at over 24 Airports.
vi. Land and Office space Rents and other Concession Charges at over 24 Airports.
vii. Charges for concession payment on car hires and shuttle buses
viii. Charges on services provided to state airports and Bicourtney
ix. Etc.

NCAA%2Blogo.jpgb. Nigerian Airspace Management Agency [NAMA].
i. Air Navigational and Air Traffic Control and other services Charges [over 400,000 air traffic].
ii. Overfly ee Charges [about 50,000 overflying Air Traffic] iii. Etc
c. Nigeria Civil Aviation Authority

i. 5% Charges on all sales Domestics and International Passengers Tickets [for over 14m in 2010].
ii. 5% on Freight Charges on Cargo Export and Import [200m kg in 2010].
iii. Royalties on Imbalance in Existing BASAs [Average $20 – $30 on every seat on over 3m passengers] iv. 4% Corporate Charges on Travel Agents Sales
v. Personnel Licensing Fees, Aircraft and Airlines Registration, Licensing and Annual Renewal Fees [over 2000 Pilots, 300 Registered Aircraft and over 50 Airlines and Aircraft Operators].
vi. Security Clearances Fees for Unscheduled Foreign Flights [landing & overfly] vii. Revenue Generated from the Unilateral Commercial Agreement with foreign Airline
viii. Revenue from Licensing , Registration and the Management of over 200 Airstrips, Private and State Airports, Helipads and Heliports
ix. Charges on installation of telecom masts
x. Etc
Annex B
Forex earnings from expected IGR
1. Annual Earnings from Landing and Parking Charges on about 12,000 Foreign Airlines if we assume $2,000/Flight = $24 million [Foreign Airlines Fly Average of 220 flight/week].

2. Passenger Service Charge of average of $50.00/Passenger on about 1.5 million International Onboard Passengers only $75 million.

3. Air Navigational Charge of average of $500/aircraft from about 100,000 inbound, outbound and overflying foreign airlines $50 million.

4. Commercial Agreement and Royalty on BASA between Nigeria and Foreign Airlines at Average of $50/Passenger on over 2 million passengers carried by Foreign Airlines in Excess of Nigeria Airlines on the BASA Route $100 million Note Royalty vary from $50 to $80/Passenger seat.
Find out what happened to the earnings between 2007 and 2015

John O Ojikutu

About NigerianFlightDeck

Nigerianflightdeck is an online news and magazine platform reporting business stories with a bias for aviation and travel. It is borne out of the intention to inform, educate as well as alter perceptions with balanced reportage.

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