In six years,
FAAN remitted N8.7 billion
Unviable airports scattered nationwide have been blamed by the Federal Airports Authority of Nigeria (FAAN)
for its low earnings and revenue shortfall over the years, now in excess of N65 billion.
FAAN ‘s management, when appearing before the Finance Committee of the House of Representatives in
Abuja, reaffirmed that a total of 18 out of the 22 airports it operates are inviable.
The Guardian previously reported that at least 17 of the 20 Federal Government-owned and
controlled airports were inviable and run on the bounce at losses for three years.
With the exception of the trio of Rivers State’s Murtala Muhammed International Airport (MMIA), Lagos, Nnamdi Azikiwe International Airport (NAIA),
Abuja, and Port Harcourt International Airport (PHIA), none of the other 17 airports have adequate revenue to cover operating costs alone.
Investigations found that the operating expense deficits incurred by the unviable airports in 2017 , 2018 and 2019 were
cushioned by additional funding from excess revenue from high-traffic Lagos and Abuja airports to the tune of N26.1 billion.
At the inquiry session, the Chairman of the House of Representatives’ Committee on Finance, James Faleke, called for
a justification for a total of N65 billion in revenue shortfalls expected from FAAN over the past six years.
In contrast to the aspirations of the Finance Ministry, Faleke said such revenue
shortfalls were responsible for the abysmally poor budget output by the Federal Government.
The legislator, who chronicled the revenue aspirations of the government from FAAN since 2014, noted that the agency had not even been able to reach
at least 25 percent of the estimates, which meant that government intentions to provide public facilities would also be unlikely because of the default in remittance
While the government projected total FAAN remittances of N74.325 billion between
2014 and 2019, only a sum of N8.865 billion was remitted.
Faleke remembered the management of the current Financial Regulations and Revenue Management Acts, which he believed had repeatedly violated FAAN
with impunity, adding that the Public Finance Revenue Management Act only allows government undertakings to retain 25% of their revenue.
In his defense, Capt. Rabiu Yadudu, FAAN’s Managing Director, claimed that the special protocols for making airports compliant with the recommended requirements placed an obligation on management
to regularly make timely reinvestments in airports by means of improvements, maintenance and repairs in order to make airports operational at all times and at various seasons.
Yadudu said the problems requiring immediate compliance with international standards and the best
practices recommended made it a little difficult to remit revenue exclusively ahead of time.
“FAAN is subsidising 18 airports that are not viable to keep them operational. It’s either we compromise on standards or comply with remittances,” he said
On behalf of the Federal Government, FAAN
operates and maintains all of the public airports.
Among them are 20 directly owned by the
Federal Government, and four airports owned by the state.
A fact sheet collected by The Guardian on the revenue and expenditure of the 20 federal airports
and FAAN Headquarters over the last three years revealed enormous income shortfalls and deficits across the board.
The Kaduna International Airport, for example, which was upgraded during the closure of Abuja airport in
2017, has pooled a total of N1,027 billion in produced revenue in the last three years.
N716.7 million was
obtained from the total.
The expenditure, however, was higher than N4.41
billion, leaving a deficit of N3.69 billion.
The International Airport of Mallam Aminu
Kano, Kano, did not do well.
A total of N8.28 billion in produced income was
pooled at the airport in 2017 , 2018 and 2019.
Its expenditure amounted to N9.6 billion
in total, leaving a N2.44 billion shortfall.
In three years, Kastina Airport managed to rake out a total of
N250.8 million in revenue generated, of which only N42.1 million was received.
However, the operating expense was put at N1.58
billion, leaving a deficit balance of N1.54 billion.
Similarly, the total revenue generated by Sokoto Airport
was N725.7 million, of which N400.1 million was received.
Operating costs were in excess of N2,71
billion, resulting in a shortfall of N2,31 billion.
In the South, Ibadan Airport produced a total
of N349.2 million in revenue over three years.
There was an investment of N1.39
billion and a deficit of N1.14 billion.
Over three years, Ilorin International Airport
produced total revenue of N437.1 million.
It raised a
total of N264.2 million.
The expenditure amounted to more than N2,453
billion, with a deficit of N2,19 billion.
Having listened to FAAN MD ‘s defense, the legislators still insisted on looking at FAAN’s financial records, especially its
revenue and expenses, in order to be able to understand whatever the compelling reason for not achieving remittance objectives.
In the hallowed chamber of the lower house, Yadudu and his Finance and Accounts
crew are scheduled to shed more light on the contentious problem in a fortnight.
Source: THE GUARDIAN NEWS