Business & Economy

Aviation Unions Want to Retain 70% of IGR, Clashes With Federal Government Over Revenue Allocation

Published by
Esther Agbor

 

The long-standing debate over revenue allocation within Nigeria’s aviation sector has reached a critical juncture as aviation unions push for a significant adjustment in the sharing formula for Internally Generated Revenue (IGR).

Reliable sources within the Federal Ministry of Finance have revealed that unions are demanding that aviation agencies retain 70 per cent of their IGR, a significant increase from the current arrangement. The unions argue that the current deduction of 50 per cent by the Federal Government is unsustainable for the operational needs of aviation agencies.

During a recent meeting between representatives of the unions and government officials, the unions presented their case for the 70:30 sharing formula, citing the cost-recovery nature of the agencies, which include the Nigerian Civil Aviation Authority, Federal Airports Authority of Nigeria, and others.

In response, the Ministry of Finance proposed a 60:40 formula, sparking intense negotiations. While the government assured the unions of a resolution, the final decision remains uncertain.

A source privy to the discussions commented: “The unions want 70 per cent to go to the agencies while 30 per cent goes to the Federal Government.”

The unions’ stance is rooted in their earlier protests against the 50 per cent deduction policy. In September 2024, workers across various aviation agencies threatened nationwide protests, arguing that the deductions cripple the agencies’ ability to function effectively.

“All workers of the Nigerian Civil Aviation Authority, Federal Airports Authority of Nigeria, Nigerian Airspace Management Agency, Nigerian Meteorological Agency, Nigerian College of Aviation Technology, and Nigerian Safety Investigation Bureau, joint solidarity of all aviation workers are hereby directed to embark on peaceful protests at all airports nationwide on September 18, 2024, to demand the discontinuation of deduction of 50 per cent from the IGR of the agencies mentioned above through an exemption.”

In a statement, the unions highlighted the cost-recovery model of the agencies and their inability to operate efficiently under the existing revenue-sharing structure. “All efforts on our part have failed to impress upon the Federal Government that all the agencies are cost recovery, and not profit making, organizations.

“As such, they cannot survive on half of their incomes under any model of administration or any other guise whatsoever. The ultimatum given to the Minister of Aviation on the same has expired since the end of August 2024,” the statement read.

Although the unions eventually suspended their planned protests in September after assurances of dialogue from the government, they maintained that their demands must be met to ensure the sustainability of the aviation sector.

Esther Agbor

Esther is a graduate of History and International Relations. She writes on healthcare and the impact of economic policy on society.

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