By Funso OLOJO
The Federal Airports Authority of Nigeria(FAAN), has come out to defend its controversial tariff increase at the Airport.
It could be recalled that this tariff hike has sparked off an outrage among the freight forwarders plying their trade at the FAAN facilities, who have accused FAAN of mischief and “institutional blackmail”
The leadership of the angry customs licensed agents associations such as the Association of Nigeria Licensed Customs Agents (ANLCA), National Association of Government Approved Freight Forwarders(NAGAFF), APFFLON and NAFFAC, have all jointly condemned the new tariff regime, describing it as illegal, double taxation and unilaterally imposed by the Airport Authority without consultation with the relevant stakeholders.
However, the management of FAAN, in its reaction to these plethora of allegations, has issued a statement, clarifying the rationale behind the increase and refuting the allegations of extortion and unilateral action made by the angry stakeholders.
FAAN stated it’s own side of the story thus
“Why we increase the tariff?
“FAAN has increased tariffs after careful consideration of current economic realities.
“Our tariffs have remained static since 2008. Over the past 18 years, Nigeria has experienced significant inflation (approximately 287%) and a drastic depreciation of the Naira.
“This adjustment is essential to sustain and upgrade critical airport infrastructure, which has become financially unsustainable under the old rates.
“The tariff is increasing from ₦7 to ₦20. Isn’t this a huge jump?
“While the percentage increase appears large, it is important to view it in the context of time and inflation.
“Based on data from the National Bureau of Statistics (NBS), a service that cost ₦7 in 2008 should cost about ₦27.09 today just to have the same value.
“The new tariff of ₦20 is actually below this inflation-adjusted benchmark. This demonstrates FAAN’s commitment to sharing the burden and not passing the full cost onto operators.
“How does the foreign exchange (FX) rate affect airport charges?
“A significant portion of the equipment and materials needed for airport infrastructure—such as runway asphalt, aerodrome lighting, and fire truck parts—are imported.
“In 2008, the exchange rate was about ₦118/$1. Today, it is about ₦1,500/$1.
” This means the cost of these essential items has increased by over 1,000%. The tariff review is crucial to generate the necessary revenue in Naira to meet these dollar-denominated costs.
” How does Nigeria’s new cargo tariff compare to other countries in West Africa?
“Our analysis shows that even with this adjustment, Nigeria’s cargo charges will remain competitive. Prior to this review, our charges were lower than those at major regional hubs like Kotoka International Airport (Ghana) and Cotonou Airport (Benin).
“This move aligns us closer to regional standards while ensuring we remain an attractive destination for air cargo operators and investors.
” Is this not a form of double taxation on top of what the concessionaires charge?
“No, this is not double taxation. There is a clear distinction between the two charges:” FAAN Port Charge: This covers the use of shared airport infrastructure that everyone benefits from, such as runways, taxiways, perimeter fencing, security, access roads, and airfield lighting.
“It is like a toll for using the airport’s common facilities.
“Concessionaire’s Handling Fee: This fee is charged by the private warehouse operators for specific services they provide within their terminals, such as cargo handling, storage, and documentation.
“Will this tariff increase lead to higher prices for goods and services for the average consumer?
“FAAN expects the impact on consumer prices to be minimal. The Port Charge is a very small component of the total cost of air freight.
“The significant benefits of improved infrastructure—such as faster turnaround times and reduced delays—will ultimately lead to greater efficiency and could help stabilize or even lower logistics costs in the long run.
“What specific projects will the revenue from this tariff increase be used for?
“The additional revenue will be reinvested directly into critical cargo infrastructure projects, including:”Rehabilitation of aprons and access roads to cargo terminals.
“Enhanced perimeter security and access control systems.
“Implementation of a Cargo Community System (CCS) for digital documentation.
“Installation of a Truck Call-Up System to reduce congestion at the Premier Cargo Terminal (PCT).
“Upgrades to airfield lighting and other essential facilities.
“Development of domestic cargo infrastructure.
“Was there any consultation with stakeholders before this decision was made?
“Yes. FAAN is committed to transparent stakeholder engagement. Formal communication has been sent to all cargo operators and industry players.
” Furthermore, stakeholder consultations are ongoing and will continue as a permanent exercise.
“This ensures that all relevant parties are informed about cargo initiatives and can provide feedback.
” What is the long-term goal of this tariff adjustment?
“This is not merely a revenue-generation measure. It is a strategic investment in the future of Nigeria’s air cargo sector.
” The goal is to build a resilient, efficient, and future-ready cargo ecosystem that is globally competitive, enhances security, and supports economic growth”
