•Presidential committee promises review, support for industry
Aviation Safety Round Table Initiative (ASRTI), a think-tank group of the local sector, yesterday, bemoaned the protracted era of multiple charges in the air transport sector.
The peculiar challenge was partly blamed for high cost of airfares and suffocating operating conditions for carriers, despite poor infrastructure across the board.
The Guardian had reported that perennial sundry charges that are levied at local and international airports placed Nigeria among the most expensive aviation countries in Africa.
The local sector accounts for sundry taxes and charges numbering 35. The multiple charges cost the airlines between 38 and 65 per cent of revenue.
Chairman of Sabre West and Central Africa, Dr Gbenga Olowo, at the ASRTI Breakfast Meeting held in Lagos, noted that the prevailing “highly expensive” environment is a contraction to the reality in the sector, especially the problem of foreign airlines’ stuck funds.
Olowo recalled the revelations during the just concluded 55th annual general assembly and summit of African Airlines Association (AFRAA) in Kampala, Uganda, which rose with a statement by IATA on the Nigerian environment.
“Lagos (LOS) and ABUJA (ABV) are the most expensive airports in the world. Passenger Service Charge is $100 per passenger, while Doha (DOH) the best Airport in the world is $44 and Dubai (DXB) $40,” Olowo said.
Yet, “Airports are not maintained, and Nigeria owes $850 million (as at May 2023) the highest aviation debt worldwide. One single airline is owed $281million. There are difficulties in entering into more bilateral agreements.
“IATA said they are tired of mediating between the Nigerian government and the airlines. This is indeed regrettable,” he said.
Indeed, Nigeria accounts for 32 per cent of the foreign airlines’ stuck funds owed by 10 countries globally, as of October 2023. Nigeria is next only to Bangladesh, Algeria and Pakistan.
Chairman, Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, acknowledged the pivotal role the ports play as the gateways to our economy.
He said beyond serving as entry points, the ports offer a glimpse into the core of the nation, “who we are and what we stand for —from regulatory intricacies to how much of an investor-friendly nation we are, the efficiency or otherwise of our processes, and our commitment to innovation and creativity.”
That notwithstanding, challenges abound from both seaports to airports.
Oyedele said: “Recent revelations from IATA rank our Lagos and Abuja airports as the two most expensive in the world, no thanks to the endless levies, taxes, fees and charges. Whether or not this assertion is accurate, the mere perception of it is detrimental and demands our urgent attention.
“Equally, a recent news report credited to FAAN indicated that at least 15 airports in Nigeria are not viable. Sadly, beyond the huge capital outlay, we also need to maintain these airports and airstrips at huge costs despite our lean resources. This places undue pressure on the few viable airports, particularly the Lagos and Abuja, perhaps contributing to the myriad of taxes and levies. Solving these challenges requires a departure from the mindset that created the problems in the first place.”
He, however, added that the country cannot aspire to be competitive while at the same time burdening businesses with complex processes.
“We must cease taxing seeds and, instead, foster an environment that encourages businesses to thrive, bearing fruits that we can tax. In this pursuit, the Presidential Fiscal Policy and Tax Reforms Committee was established with a clear mandate to harmonise taxes and revenue collection agencies, promote business growth, and cultivate a competitive landscape, among others.”
Oyedele assures of the committee’s readiness to support the aviation sector in overcoming these challenges.
President of ASRTI, Demola Onitiju, earlier said that the focus of the government should not be that of seeing aviation as a revenue generating sector.
Rather, it should be seen as a catalyst, an enabler of socio-economic growth and development.
The Nigerian aviation sector presently supports over 240,000 jobs directly and indirectly while contributing over $1.7 billion to the economy.
The ART has been at the forefront of the advocacy for the Nigeria aviation sector to realise its full potential.
