STAKEHOLDERS in Nigeria’s aviation sector are advocating for a revision of the revenue-sharing formula for the five percent Ticket Sales Charge/Cargo Sales Charge (TSC/CSC), emphasizing that the Nigerian Airspace Management Agency (NAMA) needs a greater portion of the revenue to enhance air navigation infrastructure.
This development arises from the Nigeria Civil Aviation Authority (NCAA)’s concerns that a decrease in its statutory allocation may undermine aviation safety oversight and regulatory effectiveness.
Addressing newsmen in Abuja recently, Director of Public Affairs and Consumer Protection at the NCAA, Michael Achimugu, said while NAMA is a self-sustaining agency, the NCAA primarily depends on the TSC for funding its statutory regulatory functions.
Under the Nigeria Civil Aviation Act, 2022, proceeds from the five percent TSC/CSC on passenger tickets and cargo are distributed as follows: NCAA receives 56%, NAMA 22%, NiMet 9%, NCAT 7%, and NSIB 6%.
However, proposed legislation in the National Assembly aims to amend the allocation formula by decreasing the NCAA’s share from 56% to 40% and increasing NAMA’s share from 22% to 40%.
Aviation experts support the proposed amendment, arguing that the existing formula does not accurately represent the critical infrastructure responsibilities of NAMA.
Leading the charge is is the Aviation Safety Round Table Initiative (ASRTI/ART), with its President, Air Commodore Ademola Onitiju (retd), advocating for an increase in NAMA’s allocation, citing the agency’s role in aeronautical and air navigation services.
He stated that the bill’s proposal to adjust the NCAA’s share from 56% to 40% and NAMA’s from 22% to 40% is acceptable. He emphasized the importance of NCAA in regulating aviation safety and standards in Nigeria.
Additionally, he highlighted the necessity of equipping NAMA with the right infrastructure for safe airspace management, benefiting both Nigeria and the international community.
He urged the government to increase funding for the NCAA to fulfill its obligations under the International Civil Aviation Organisation (ICAO).
Group Captain John Ojikutu, a retired aviation safety and security expert, criticized the current revenue-sharing formula, deeming it inequitable.
He said: “In each of the airports, there are a minimum of three navigational and aerodrome approach equipment. Equipment such as the Instrument Landing System, ILS, radar and the Very High Frequency Omnidirectional Range, VOR, must be calibrated at least twice a year.
‘’Some of these systems cannot be calibrated locally, so experts have to be brought in from abroad and paid in foreign currency.
“I raised this issue with the National Assembly as far back as 2022 because the formula is wrong. What is the rationale for allocating only 22 per cent to NAMA? It is the only agency providing aeronautical services, yet it receives far less than the NCAA, which is essentially a regulatory inspector. The NCAA’s share should be reduced to 40 per cent.”
Former NAMA Managing Director and current Trustee of the Airline Operators of Nigeria, Mr. Roland Iyayi, faulted the five percent TSC, calling it unsustainable for domestic carriers. He deemed it ineffective, arguing that it failed to fulfill its intended purpose of developing aviation infrastructure.
Iyayi suggested replacing it with an Aviation Development Fund, separate from government revenue, to focus specifically on infrastructure projects in the sector.
He said: “The five per cent TSC is useful, but not for the purpose for which it is currently being used. What it was intended for and what it is being used for today are two different things. It was intended for aviation development.
‘’Yet aviation has remained in deficit for the past four or five decades because those funds have consistently been diverted to purposes outside aviation.”