By Chinelo Obogo
The National Assembly has resolved to seek a ‘workable’ solution to the request by the Federal Airport Authority of Nigeria (FAAN) to be exempted from remitting 25 percent of its Internally Generated Revenue (IGR) into the nation’s treasury.
Chairmen of the House and Senate Committees on Aviation, Nnolim Nnaji and Smart Adeyemi made this known during the 25th Annual Conference of the League of Airport and Aviation Correspondents (LAAC).
Senator Adeyemi who spoke on the compulsory 25% contribution of FAAN to the treasury said they are looking at how the agency’s request to be exempted from remitting the funds can be managed in a way that would not go against the 1999 constitution as amended.
“We are looking at how we will navigate the pleas from agencies like FAAN to be allowed not to pay the required 25 percent IGR into the treasury because that would be in conflict with the constitution of the Federal Republic of Nigeria. We are looking at what can be done and that explains one of the issues why we have not passed the Bills. But when we resume from our recess, we would take a final position on that and look at how we can strike a balance between the 1999 constitution and what the Bill is seeking. But you know that in any situation where you have any law that is in conflict with the constitution, the constitution will take prominence.
“I am a member of the Senate Committee on Constitutional reforms and we would be meeting soon and some of these issues are what we would be looking at. We would be considering how we can make the agencies more effective by either reducing or outrightly asking them to use some of the funds that they generate,” Adeyemi said.
Nnolim who also spoke at the event expressed sadness at the inability of airlines to access sufficient forex for to purchase aircraft spare parts. He also said that it is unfortunate that the FG did not do much for the sector as regards bailout during the height of the COVID-19 pandemic.
The government didn’t do much in terms of bailout for the airlines. The cost of the engine of a Boeing is close to $10 million and what the government provided for all the airlines is about N4 billion, so, when you compare what our airlines got to other countries, you will find out that they didn’t do much for the industry. The aviation industry is a very expensive business and most people do not break even. What they just succeed in doing is to just keep the business going because everything about the industry is offshore and that is a challenge.
“We have succeeded in getting zero duties for the airlines for the purchase of spare parts. Another issue that they are battling with is the issue of forex. Since they buy most of their stuff abroad, it is important that they have access to forex. The planes need to be in the sky all the time because the more you move, the more money you make so that you can pay your bills. We would want the Central Bank of Nigeria to create a window for Forex because it will help reduce the airfare.
“For now, I don’t know how the ban on Forex to BDCs will affect airlines but I heard that the black market rate has gone up. I still wonder if banks can manage but from next week, we will get to know how airlines will are affected,”Nnolim said.