The passenger charge paid through Nigeria’s 5% Ticket Sales Charge (TSC) was initially not designed as a permanent funding pool for aviation agencies. According to Engr. Mahmoud Ben Tukur, Representative of Nigeria on the ICAO Council, NAMA’s allocation was introduced as temporary support expected to last for approximately five years.
The arrangement has since changed significantly. What began as a temporary transfer to help the newly established Nigerian Airspace Management Agency (NAMA) stabilise has evolved into a statutory distribution involving five aviation agencies. The development has now raised fresh questions about the original purpose of the passenger charge and whether its present allocation remains consistent with that purpose.
This was his submissions during a public hearing organised by the House of Representatives Committee on Aviation on proposed amendments to the statutory sharing formula for the TSC and CSC
Passenger Charge: From Temporary NAMA Support to Permanent Allocation
The history of the passenger charge goes back to 1990, when the Federal Civil Aviation Authority (FCAA) operated as Nigeria’s single aviation authority. The FCAA handled both safety regulation and air navigation services before introducing the 5% TSC. Ben Tukur’s submission states that the charge was “payable by passengers to fund the provision of aviation safety regulatory oversight.”
The structure changed after the FCAA was dissolved in 1995. Its regulatory component moved to the Federal Ministry of Aviation, while its air navigation component joined the Nigerian Airports Authority to form the Federal Airports Authority of Nigeria (FAAN). During the transition, Aerocontrol continued collecting the TSC for the Federal Government.
In 1999, the NCAA and NAMA were re-established as independent agencies. The NCAA was assigned responsibility for collecting the 5% TSC on passenger ticket and cargo sales to finance its statutory regulatory functions. NAMA, however, was a new agency with limited internally generated revenue and required transitional financial support.
That support came through a transfer of 30% of the passenger charge from NCAA to NAMA. Crucially, Ben Tukur says the arrangement was not intended to become permanent. “This support was intended to last for only a few years, approximately five years,” the submission states, adding that the objective was to allow NAMA to stabilise and develop sustainable revenue streams.
That five-year arrangement subsequently expanded. NiMet received 10% in 2003, while NCAT received 7% in 2004. In 2007, the Accident Investigation Bureau, now the Nigerian Safety Investigation Bureau (NSIB), was added with 3%.
The 2022 amendments to the aviation agencies’ enabling Acts then established the present statutory formula. NCAA receives 56% of the TSC, NAMA 22%, NiMet 9%, NCAT 7% and NSIB 6%. Therefore, the original temporary arrangement has become part of a permanent statutory framework.
Why the TSC Is Now Under Scrutiny
Ben Tukur’s argument centres on the nature of the passenger charge itself. The submission says the TSC is “a passenger charge intended to support the State’s aviation safety regulatory oversight function, which is performed by the NCAA.”
The distinction becomes important when NAMA’s role is considered. According to the submission, “NAMA provides air navigation services directly to aircraft operators, not to passengers.” NAMA consequently recovers the cost of those services through en-route and terminal navigation charges paid by airlines.
This creates a fundamental funding question. If passengers pay the TSC to support aviation safety regulatory oversight, while airlines pay NAMA directly for air navigation services, should part of that passenger charge continue funding NAMA and other service agencies?
Ben Tukur links the question to ICAO Doc 9082, which establishes international principles governing aviation charges. The document states that charges should be levied on users who directly benefit from services and should reflect the cost of those services.
His submission therefore argues that allocating part of the passenger charge to agencies that do not provide regulatory services to passengers is inconsistent with the cost-related charging principles contained in ICAO Doc 9082.
NCAA Funding Faces the Safety Test
The dispute is ultimately about more than revenue percentages. It also concerns the financial capacity of Nigeria’s aviation safety regulator. Ben Tukur warns that the NCAA’s responsibilities continue to expand as aviation becomes increasingly complex and technologically advanced.
The submission says reducing NCAA’s financial resources could undermine safety oversight, technical recruitment, certification, surveillance and inspections. It could also affect the implementation of ICAO Standards and Recommended Practices and Nigeria’s standing under the Universal Safety Oversight Audit Programme.
The argument is straightforward. The NCAA regulates the industry, while NAMA provides navigation services directly to aircraft operators. Therefore, the funding mechanism for each function becomes critical when lawmakers consider changes to the TSC structure.
Ben Tukur also places the debate within an international context. He points to the Seventh ICAO Worldwide Air Transport Conference and its agenda on sustainable funding for Civil Aviation Authorities and Regulatory Authorities.
According to the submission, Nigeria has long been regarded as an example of a regulator with an independent and sustainable funding model. Ben Tukur warns that significantly reducing NCAA’s financial autonomy could raise concerns about the long-term sustainability of Nigeria’s safety oversight system.
From Five Years to a Bigger Funding Fight
The history of the passenger charge shows how a temporary policy can develop into a permanent statutory arrangement. NAMA’s initial 30% allocation was intended to provide support for approximately five years. Today, NAMA receives 22% of the TSC under the statutory distribution introduced through the amended agency Acts.
The question before lawmakers is therefore no longer simply how to support aviation agencies. It is whether the present allocation still reflects the original purpose of the passenger charge and the principle that users should fund services from which they benefit.
Ben Tukur’s submission ultimately urges the Honourable House to consider the long-term consequences of further reducing NCAA’s financial capacity. “Preserving a strong, independent and adequately funded regulator is not merely an institutional matter it is a national aviation safety imperative,” he concludes.
