Government Deductions Could Force Aviation Agencies into Cash Shortages and Potential Bankruptcy

Chinedu Eze

Aviation industry stakeholders are concerned that the federal government’s internal revenue deductions from aviation agencies’ earnings to the Consolidated Revenue Fund (CRF) are weakening the agencies’ financial positions.

Stakeholders say the heavy deductions have created severe financial distress for the agencies and could push them toward bankruptcy.

Industry sources told THISDAY that the Federal Airports Authority of Nigeria (FAAN), the Nigeria Civil Aviation Authority (NCAA), and the Nigeria Airspace Management Agency (NAMA) have become insolvent, affecting their ability to meet financial obligations, including the execution of critical projects and the payment of salaries and allowances to staff.

Workers of the agencies claim that the large amounts remitted to the federal government—running into billions of naira—have impaired their operations.

In 2024, FAAN remitted N281,881,317.34 to the CRF, part of the 50 per cent revenue remittance policy for revenue‑generating agencies.

In 2025, FAAN remitted N150.4 billion to the CRF during that fiscal year.

In 2024, NCAA was expected to generate and remit N372.23 billion to the CRF but only remitted N218 billion.

No published data exist on the amount NAMA has remitted to the CRF, but the agency said the remittances have left it cash‑strapped and unable to carry out its obligations.

THISDAY investigation revealed that NCAA is in a prolonged period of economic stagnation because, after deductions by the federal government, airlines owe the agency money from the five per cent Ticket Sales Charge and Cargo Sales Charge (TSC/CSC), which airlines collect in trust and remit to NCAA for sharing with other aviation agencies.

A NAMA insider told THISDAY that the agencies were practically in the red because the federal government “seemed insensitive about our operations and they are deducting our revenue at source.”

“We basically have installations at strategic areas and at the airports to maintain communication in the airspace, and we power these installations with diesel. You know how much diesel costs now. When you really look at it, government should not be collecting money from us because they have many other sources of revenue, and these monies they are collecting are jeopardising our operations.”

“Everyone knows that there is an epileptic power supply across the nation, so we cannot leave our equipment at the mercy of public power supply. If we do that, there will be no communication in the airspace and aircraft will start dropping from the sky. Besides, we are not a revenue‑generating agency. It is the same with NCAA. What we do is cost recovery, but the government believes we are making money. The International Civil Aviation Organisation (ICAO) recommended that revenues generated from the aviation industry should be ploughed back to the sector to further develop it. And there is so much to do with money, but the money is not there,” the source said.

The NAMA source also pointed out that the Total Radar Coverage of Nigeria (TRACON) needs spares and regular upgrades, and the spares are not produced locally, so they must be imported, but the agency is cash‑strapped.

“For NAMA to run efficiently, we need a lot of money. We have to continue to upgrade our system. We have ground‑based and satellite‑based navigation systems that always need to be upgraded and updated. Our Air Navigation Service Provider (ANSP) needs to be constantly upgraded. The manufacturers behave like mobile‑phone manufacturers; they are always upgrading the equipment, so you need to keep up with them or you will be behind. So, if NAMA has more money, they will be able to upgrade their system like what South Africa is doing with their Air Traffic and Navigation Services (ATNS),” he said.

The Secretary‑General of the Association of Nigerian Aviation Professionals (ANAP), Saidu Abdulrasaq, told THISDAY that the unions are campaigning for the federal government to stop the deductions from the agencies because whatever the agencies earn should be ploughed back to develop the industry. He insisted that FAAN has a lot in its hands managing the airports, including providing fire and security personnel to the state‑owned and other airports outside its own management.

Abdulrasaq said the agencies needed government funding instead of deductions, adding that NCAA should build a framework to directly collect its Ticket Sales Charges from passengers.

However, the former Director General of NCAA, Captain Musa Nuhu, told THISDAY in a telephone interview that the government should know that NCAA is not a revenue‑generating agency and therefore should not be remitting money to the government.

“NCAA does not charge for profit in the services it provides, and cost recovery is not enough to run the agency. Cost recovery earnings are not enough for the agency to pay its over 1,500 staff, and when you compare what NCAA charges to what Ghana Civil Aviation Authority (GCAA) charges, it is like day and night. GCAA charges very highly and they also charge in dollars,” he said.

Captain Nuhu said that NCAA would not be able to collect the ticket sales charge directly from passengers because NCAA does not know the cost of a ticket at any point in time and the number of tickets sold.

“So, the best thing is for NCAA and the airlines to sit down and review the modalities. You owe us this money, we cannot collect them all at once, but this is what you pay us every month, but subsequent ones will be paid as you go. We do not want to ground the airlines,” he said.

According to Nuhu, it is obligatory on the airlines and other organisations at the airports to pay for the services rendered to them by the agencies. NCAA conducts training, provides critical services, while FAAN spends a whopping sum of money managing the airport and providing electricity that powers the airports. Also, NAMA and NIMET provide essential services that airlines cannot do without.

“So, airlines, handling companies and others should pay for the services rendered to them by the agencies. We know that the airlines are facing their own challenges. Currently it is the high cost of aviation fuel and high exchange rate, but none of these is caused by the aviation agencies. On deductions of agencies’ revenue by government, ICAO recommended that money earned from aviation should be used to develop the industry, but the federal government has its own aviation policy. So, such deduction is government policy in Nigeria but it is against ICAO recommended practices,” he said.

Nuhu also recommended that the Nigeria Civil Aviation Act be reviewed to take cognisance of new developments in the aviation industry.

However, industry analyst and member of the Aviation Round Table (ART), Captain John Ojukutu, told THISDAY that there should be a critical investigation to know the actual revenue the aviation agencies collect.

He added that the agencies do not complain that foreign airlines owe them, “and they do not give a comprehensive account of their earnings from the foreign carriers, adding that the earning from these agencies can run into a trillion Naira.”

But documented revenue figures say otherwise, and the agencies are in dire need of money to effectively carry out their services, which are critical for safe flight operations.