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Labour knocks govt as FAAC payouts hit N10.4tn

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Nigeria’s three tiers of government received a total of N10.45tn from the Federation Account Allocation Committee (FAAC) between January and May 2026, representing a 25.85 per cent increase from the N8.30tn shared in the corresponding period of 2025, as the Nigeria Labour Congress and private sector stakeholders criticised governments at all levels over worsening living conditions, infrastructure decay and rising insecurity.

An analysis by The PUNCH showed that the allocations to the Federal Government, 36 states, the Federal Capital Territory, and 774 Local Government Areas were distributed from the gross government revenue of N13.76tn realised during the period, up by 4.32 per cent from N13.19tn recorded in the first five months of 2025.

The increase in distributable revenue occurred amid stronger Value Added Tax collections, higher oil-related tax receipts, and an aggressive drive by the Nigeria Revenue Service to achieve its revenue target of approximately N40tn for the federation.

Analysis of FAAC data in 2026 showed that the Federal Government received N3.72tn from the five-month allocation, while state governments got N3.56tn. Local governments received N2.51tn, while the 13 oil-producing states shared N673.17bn as derivation revenue.

A breakdown of monthly allocations showed that the amount shared rose from N1.96tn in January 2026 to N2.30tn in May 2026.

Month-on-month, allocations declined by 3.37 per cent in February to N1.89tn, then rebounded by 7.50 per cent to N2.04tn in March. The distributable pool increased further by 10.85 per cent in April to N2.26tn and rose by another 1.91 per cent in May to N2.30tn.

Compared with the corresponding months of 2025, January 2026 allocation increased by 15.09 per cent from N1.70tn to N1.96tn. February rose by 12.87 per cent from N1.68tn to N1.89tn, while March jumped by 28.86 per cent from N1.58tn to N2.04tn.

April recorded a 34.35 per cent increase from N1.68tn to N2.26tn, while May rose by 38.55 per cent from N1.66tn to N2.30tn, indicating stronger revenue mobilisation as the year progressed.

Gross government revenue also climbed steadily. It stood at N2.59tn in January, declined to N2.23tn in February, before rising to N2.36tn in March, N3.18tn in April, and N3.40tn in May.

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The Federal Government emerged as the largest beneficiary of the five-month allocation with N3.72tn, exceeding the total allocation to local governments by N1.21tn or 48.2 per cent. State governments received N3.56tn, which was N1.05tn or 41.8 per cent higher than the N2.51tn allocated to local councils.

The gap between the Federal Government and states remained relatively narrow, with the Federal Government receiving N160.71bn more than states during the period, representing about 4.5 per cent.

Labour reacts

In a phone interview with The PUNCH, reacting to the development, the Assistant General Secretary of the Nigeria Labour Congress, Chris Onyeka, said the increase in revenue had not translated into improved welfare for Nigerians.

“It is not the quantum of revenue available to the government that translates to impact on the welfare of citizens and workers,” Onyeka said. “It is the willingness of the people who occupy positions of leadership that determines how these resources impact the lives of the citizenry.”

He accused the three tiers of government of failing to channel public resources into projects that improve citizens’ lives.

He lamented the political problem, stating: “The answer is simply that 99 per cent of those in government will not let it impact positively on the lives of Nigerians. Because if they do, our lives will not be the way they are. Infrastructure all over the nation has deteriorated significantly.”

However, some states are performing above board. According to the NLC official, “It is only in one or two states where you see improvement because the people occupying positions of leadership have decided to allow some of the resources to touch the lives of the people.”

The labour leader argued that insecurity remained the biggest indicator of government failure despite rising revenues. “You cannot talk about infrastructure development or the welfare of the citizenry if you cannot address insecurity. If I cannot move from point A to point B without having my heart in my mouth, then you cannot talk about any other thing. The Constitution talks about the security and welfare of citizens. Security is paramount,” Onyeka said.

He added, “If I cannot go to my farm and come back safely, if I plant and cannot return to harvest, then it has multiplier effects on the welfare of the citizenry. Nigerians are scared. As you are saving money, you are also saving money for ransom payments.”

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Onyeka lamented that workers had not benefited from the increased allocations, citing soaring transportation, housing and food costs.

“We do not feel better off. We do not use better roads. We do not pay cheaper transport fares. We do not have better access to health care, education or nutrition. We cannot feed ourselves better. So how do you measure the impact?” he asked.

He further declared, “Nigeria is not working. Nigeria is not working.”

Also commenting, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said some states had used increased revenues to support citizens, but many had failed to prioritise projects that directly improve livelihoods.

“Some states have invested in projects that really impact the lives of the people, such as providing mass transit, supporting farmers with fertiliser and inputs, investing in health care services and developing rural communities,” Yusuf said.

However, he noted that many governments focused on projects with limited impact on living standards. “Many states prefer to embark on physical projects people can see, like express roads, flyovers and airports. Those things are not bad, but their developmental impacts in terms of livelihoods and living standards are very limited,” Yusuf stated.

He warned against a situation where rising government revenues coexist with worsening poverty. “States should focus on things that directly impact livelihoods and welfare so that we do not have a situation where there is prosperity in terms of revenue and fiscal outcomes while so many people are left behind. Inclusion is very critical,” Yusuf said.

The economist also urged state governments to take greater responsibility for security, saying they should continue supporting security agencies rather than leaving the burden solely to the Federal Government.

See also  NLC demands N500k minimum wage, says current N70k minimum wage is no longer sustainable

New sharing formula

The growth in allocations comes months after the implementation of a new VAT sharing formula under the tax reforms signed into law by President Bola Tinubu. The reforms reduced the Federal Government’s VAT share from 15 per cent to 10 per cent while increasing the states’ share from 50 per cent to 55 per cent.

The PUNCH had earlier reported that states received N1.18tn from VAT revenue in the first quarter of 2026, an increase of N214.78bn or 22.35 per cent compared to the corresponding period of 2025.

The Federal Capital Territory also made history in January 2026 when it received N15.8bn from the VAT pool for the first time despite being a consistent contributor to VAT collections.

However, despite the improvement in allocations, revenue generation has remained below government expectations. The PUNCH previously reported that the Nigeria Revenue Service generated N7.44tn in the first quarter of 2026 against a target of N9.68tn, leaving a shortfall of N2.24tn and achieving a performance rate of 76.87 per cent.

The NRS has since intensified compliance enforcement. Speaking recently at a tax compliance workshop in Abuja, Executive Director of the Government and Large Taxpayer Directorate, Amina Ado, warned that unremitted taxes by ministries, departments, agencies, states and local governments could trigger direct deductions from their FAAC allocations.

Ado said, “Section 80 empowers the Accountant General of the Federation to deduct all unremitted revenues due from any MDA or government from its budgetary allocation and remit such deductions to the relevant tax authority, whether a federal or a state tax authority, after a specific due process has been followed.”

She added, “If a federal, state, or local government treats that withholding tax as someone else’s responsibility, the law provides a mechanism for that neglect to return immediately through deductions from allocations by the Accountant General of the Federation.”

According to her, the agency is targeting about N40tn in tax revenue and sees stronger compliance by public institutions as critical to achieving the goal.

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NCAA deploys RFID technology to curb baggage mishandling

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The Nigeria Civil Aviation Authority has commenced moves to deploy Radio Frequency Identification technology at Nigerian airports to tackle persistent cases of lost, delayed, damaged and misrouted passengers’ baggage.

The technology, which is expected to track passengers’ luggage from check-in to aircraft loading and arrival, was unveiled at a technology modernisation briefing organised by the NCAA for airlines, ground handlers and other aviation stakeholders on Tuesday.

Speaking at the event, NCAA’s Director of Public Affairs and Consumer Protection, Michael Achimugu, said baggage handling remained one of the industry’s biggest sources of passenger complaints, after flight delays.

Achimugu said, “For many years now, one of the biggest complaints in the industry has been that of baggage. Passengers frequently contend with bags that are short-landed, missing, lost or damaged.”

He said the proposed RFID system would allow passengers to monitor their bags through an application and know whether the luggage had left the check-in area, reached the sorting point, arrived at the boarding area or been loaded onto the correct aircraft.

According to him, the technology would also help prevent bags from being sent to the wrong destinations by flagging discrepancies during processing.

Achimugu gave the example of a passenger travelling from Lagos to Kano, saying the system would make it difficult for such a bag to be loaded onto another flight without being detected.

He said RFID would equally improve the way airlines respond to missing-baggage complaints by providing a record of the bag’s last known location.

“If you have landed in Lagos, but your bag is in Enugu, for instance, you can tell the airline specifically where your bag is,” he said.

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Achimugu said such visibility would reduce the time airlines spend investigating baggage complaints and make operators more accountable for lapses along the baggage-handling chain.

However, the technology is not yet operational, as the NCAA continues consultations with airlines and other stakeholders on implementation.

He further said discussions were ongoing on how the RFID platform would integrate with airlines’ existing Passenger Service Systems and Departure Control Systems, while the authority was also considering regulatory changes that could make baggage automation mandatory.

Airlines support the initiative, but raised concerns about integration, infrastructure, human error and the cost of implementation.

Operators questioned whether existing baggage-tagging equipment and printers would have to be replaced and sought clarity on who would bear the cost of the new technology.

They also warned that the success of RFID would depend on adequate baggage-sorting infrastructure at airports.

The contractor, Aviation 360 Solutions, said the system would deploy multiple scanning points at baggage sorting and aircraft-loading areas to create a digital record of each bag’s movement.

The company said the system would make it possible to determine where a bag was last scanned if it failed to reach the aircraft.

Achimugu said successful implementation would require the cooperation of the NCAA, Federal Airports Authority of Nigeria, airlines, ground handlers and other service providers.

“The NCAA does not own airport infrastructure,” he said, stressing that all stakeholders must be involved because of their respective roles in baggage handling.

The NCAA said the project is expected to commence later this year, with the ultimate objective of reducing one of the aviation industry’s most persistent passenger complaints.

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African airlines reject API, PNR charges

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African airlines and their industry representatives have pushed back against attempts to make airlines and passengers pay for government-run Advance Passenger Information and Passenger Name Record systems, insisting that border security is the responsibility of states.

The African Airlines Association, Airlines Association of Southern Africa and International Air Transport Association said they support the deployment of API and PNR systems across the continent, but warned that the cost should not be passed on to travellers or carriers through additional charges.

In a joint statement signed by AFRAA Secretary-General, Abdérahmane Berthé; AASA Chief Executive Officer, Aaron Munetsi; and IATA Regional Vice President, Africa and Middle East, Kamil Alawadhi, the associations said governments should fund the systems as part of their border-security responsibilities.

API and PNR systems allow governments to receive passenger information before travellers arrive at or depart from a country. The data can help authorities strengthen border controls, support law-enforcement operations and identify security risks, while also making the movement of legitimate travellers more efficient.

But the three aviation bodies warned that the benefits could be undermined if African countries introduce poorly coordinated systems or impose new financial burdens on an industry already grappling with high operating costs.

They particularly rejected the use of airline and passenger charges to fund national API and PNR programmes.

The associations argued that the International Civil Aviation Organization Policies on Charges for Airports and Air Navigation Services, contained in Doc 9082, recognise border security as a government responsibility. Consequently, they said, the costs associated with border-security measures, including API and PNR programmes, should be borne by governments.

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Passing the bill to airlines and passengers, they warned, would ultimately make air travel more expensive, weaken connectivity and threaten some of the wider economic benefits aviation brings through tourism, trade and investment.

For an industry seeking to make air travel across Africa more accessible, the associations said additional charges could have consequences far beyond the price of a ticket.

They therefore called on governments implementing API and PNR systems to put clear legal and operational frameworks in place before deployment, while ensuring that national programmes conform to ICAO standards and other internationally recognised practices.

Four principles, they said, should underpin the systems: legality, proportionality, purpose limitation, and consistency and accuracy.

On legality, the groups said governments must establish clear laws governing the collection, processing and transfer of passenger data, consistent with international API and PNR standards as well as applicable bilateral and regional agreements.

They also harped on proportionality, saying authorities should collect only information genuinely required for the stated purpose.

Passenger data, they said, should not be kept indefinitely. It should be retained for a clearly defined period, while risk-assessment processes must contain safeguards to prevent discrimination.

The associations also maintained that information collected under API and PNR programmes must be used only for legitimate purposes such as border control, national security, law enforcement and the prevention of serious crimes.

They also urged governments to prioritise accuracy and consistency in the way passenger information is collected, processed, stored and transmitted, with countries adopting harmonised global data formats and strong safeguards for personal information.

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In their joint statement, the aviation bodies said they were not opposed to passenger-data systems, but to approaches that create unnecessary costs, inconsistent requirements and avoidable burdens for travellers and airlines.

The organisations said, “We support the implementation of Advance Passenger Information and Passenger Name Record data transfer and recognise the important role passenger data plays in keeping borders secure.

“However, these systems must be aligned around internationally recognised standards and funded correctly.”

They said a coordinated approach between governments and the aviation industry would deliver better security without making travel unnecessarily complicated or expensive.

“A consistent approach, with governments and industry working together, improves security outcomes, makes travel more seamless, safeguards personal data, and avoids unnecessary costs and complexity,” they added.

Source: punchng.com

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Expert calls for FAAN’s 5% airport revenue contribution

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Former General Secretary of the Aviation Safety Round Table Initiative, John Ojikutu, has urged the House of Representatives to compel the Federal Airports Authority of Nigeria to contribute five per cent of its airport commercial earnings to the pool funding aviation safety agencies.

Ojikutu made the proposal in a presentation  to the House Committee on Aviation and obtained by The PUNCH, in which he called for a comprehensive review of the sharing formula for the five per cent Ticket Sales Charge, Cargo Sales Charge and Chartered Flights Charge.

He argued that the existing arrangement among the Nigeria Civil Aviation Authority, Nigerian Airspace Management Agency, Nigerian College of Aviation Technology, Nigerian Safety Investigation Bureau and Nigerian Meteorological Agency was neither rational nor reflective of the different responsibilities and operational demands of the agencies.

According to him, the formula should take into account the number of personnel deployed by each agency, the volume of operational equipment, geographical spread, hours of operation and, most importantly, the safety responsibilities assigned to each institution.

Ojikutu said the five per cent charges were created to sustain mandatory aviation safety services, but questioned whether the current distribution adequately reflected the realities on the ground.

He maintained that agencies carrying heavy operational and safety responsibilities should not be left struggling for funds while critical infrastructure, equipment and personnel require continuous investment.

At the centre of his proposal is FAAN, which he said should no longer be treated merely as an airport infrastructure manager when considering contributions to aviation safety funding.

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Ojikutu noted that FAAN operates several commercial and non-aeronautical services from which it generates substantial revenue, including passenger terminal services, aircraft landing and parking charges, cargo operations, car parks, toll gates, fuel sales, car-hire services, land and office rentals, shopping malls and restaurants.

He said the list also covers airline check-in counters, aerobridges, VIP lounges and other commercial operations conducted within airport facilities.

Ojikutu argued that since these services generate revenue in the aviation ecosystem, FAAN should contribute to the funding of the safety system that supports the airports and the wider industry.

He said, “The non-aeronautical services that are mostly commercial operators’ services, which mainly are the airlines operators, cargo operators, etc., must necessarily include FAAN.

“FAAN, being a commercial airport services operator, should contribute five per cent of its airport sales service charges into the general pool for aviation safety services.”

Ojikutu also proposed a major redistribution of the existing five per cent fund, with NAMA emerging as the biggest beneficiary.

He recommended that NAMA’s allocation should increase from the current 22 per cent to 40 per cent, citing the agency’s extensive safety responsibilities and the cost of maintaining the infrastructure required to keep Nigeria’s airspace safe.

NAMA provides air traffic control and navigational services to commercial, private, government, diplomatic and military aircraft operating within the country’s airspace.

Ojikutu estimated that the agency’s workforce includes more than 800 air traffic controllers, over 500 engineers and technologists, and more than 1,000 administrative and support personnel.

He warned that inadequate funding could put critical aviation safety infrastructure at risk, particularly where maintenance, replacement and calibration of equipment are delayed.

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For the NCAA, Ojikutu recommended that its share should not exceed 40 per cent, compared with its current 56 per cent allocation.

He argued that the regulator already has more than 15 other revenue sources apart from the five per cent aviation charges, making it necessary to reconsider the size of its allocation from the common safety fund.

The proposed review, he said, should ultimately ensure that scarce aviation safety funds follow responsibility, operational exposure and actual funding needs rather than simply preserving an outdated sharing formula.

For Ojikutu, the issue is not merely about how aviation revenue is divided, but about ensuring that the agencies responsible for keeping passengers, aircraft and Nigeria’s airspace safe have the resources to do their jobs effectively.

Source: punchng.com

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