85% of Airports Are Revenue Drainers – Hamisu Yadudu
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Projected Revenue And Actual Remittance. 2014-2019
A total of 18 airports out of the 22 managed by the Federal Airports Authority of Nigeria, FAAN, have been pronounced UNVIABLE and are drain pipes that sucked the enviable revenue from the four profitable ones.
Hence, the poor performances by the 18 airports on the revenue side have been consistent in adversely affecting the projections for the nation’s internally generated revenue for quite a considerable period of time.
FAAN Managing Director/Chief Executive Officer, Capt. Hamisu Rabiu Yadudu, made these revelations when the management appeared before the House of Representatives Committee on Finance, in Abuja.
The Chairman of the House of Representatives Committee on Finance, Hon. James Faleke, had demanded the rationale for a total of N65billion shortfall in the revenue expected from FAAN cumulatively for the past six years.
Hon. James Ademola Faleke, Chairman, House of Representatives Committee on Finance
Hon. Faleke, representing Ikeja Federal constituency, said such revenue shortfall, as against the finance ministry’s expectations had been responsible for the abysmally low budget performance by the federal government.
The legislator who chronicled government revenue expectations from FAAN since 2014, observed that the agency had not even been able to meet at least 25% of the projections, which meant that government intentions to provide amenities to other arm of the society would also be made impossible due to the default in the remittance.
Faleke said that while the federal government was expecting total remittances of N74.325 billion from FAAN between 2014 to 2019, only a paltry sum of N8.865 billion was remitted.
The House Committee on Finance gave the analyses of remittances by FAAN as against the expectations of government as follows:
Hon. Faleke reminded management of FAAN of the extant laws on financial regulations and revenue management which he said FAAN had breached severally.
He said the public finance revenue management law only allows government businesses to retain 25% of their revenue and the law frowned at flagrant none compliance as exhibited by the nation’s airport managers.
Explaining the rationale for the gross inadequacy in the remittance as against the target set, Capt. Yadudu, said the special protocols in making airports comply to recommended standards, imposed a duty on the management to often times make prompt reinvestment into the airports by way of upgrade, maintenance and repairs in making the airports serviceable at all times and at the different seasons
He said those challenges requiring urgent compliance to international standards and recommended best practices made it a little difficult to exclusively placed remittance of revenue ahead, as against making the facility constantly retain, and when necessary up the ante on its service level delivery
The MD, Capt. Hamisu Yadudu, however concluded in his defense that, “FAAN is subsidizing 18 airports that are not viable to keep them operational. Its either we compromise on standards or comply with remittances”
Having listen to the fervent defense by FAAN MD, the legislators still insisted in casting a glance at the financial records of FAAN, especially on its revenue and expenditures, to be able to appreciate whatever the compelling reason for not meeting up with remittance targets.
The MD, his finance and accounts crew are expected in the hallowed chamber of the lower house, in a fortnight to shed more light on the contentious issue.
Recalled that the federal government a fortnight ago, through the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, flagged off a three-day orientation program for 50 directors of revenue who were to be posted to various Federal Government Owned Enterprises, FGOEs, including FAAN.
She said, “government is increasingly concerned with the dwindling profile of revenue and this trend has to be quickly arrested particularly with Key revenue generating agencies of Government”.
Zainab Ahmed enthused, “It is my considered opinion that the presence of Directors of Revenue at the FGOEs will ensure strict adherence to extant rules and regulations in the areas of compliance to approved budget and due process mechanism in procurement and payments”.
Highlighting their terms of reference she said, “the Directors of Revenue, in the course of the discharge of their functions, shall be involved in the revenue operations of the FGOEs, have a better understanding of business processes and operations of the FGOEs and cause improved transparency and accountability in revenue reporting by the FGOEs”.
She further noted that, “In addition, they are expected to seek opportunities and avenues for revenue improvements which are the ultimate aim of the Government. I am pleased to inform you that the discharge of these duties will be aided with the deployment of Information Technology”.
Ten of the directors will initially be posted to different FGOEs before the year runs out while other government enterprises will by next year receive their budget directors who government believed will manage the revenue points in accordance with laid down guidelines and reduce revenue shortfalls.
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It’s the mandate of the FAAN MD to ensure that those 85% unviable airports become viable! No story. We’ve heard this junk for over four decades. Enough is enough. Please. Babson Akinola. Retired Avsec.
This sounds unbelievable!
That is very correct sir , how many aircraft goes to calabar, yola, owerri, Asaba, ilorin, kaduna , Katsina, owerre, we need to boast General aviation for most of this airport to be functional and viable. KAMATIK
We have proposed to them many times what they need to do. The answer is the promotion of General Aviation Activities.