Tectonic Shift: The 40-40 NAMA, NCAA revenue split dispute

What appears on the surface to be a petty bureaucratic turf war is, in reality, a symptom of a deeper, structural financing crisis, writes WOLE SHADARE

Nigeria’s aviation sector is currently locked in a high-stakes, fiscal staring contest. A fierce proxy war has erupted between two sister agencies—the apex regulator, the Nigeria Civil Aviation Authority (NCAA), and the nation’s Air Navigation Service Provider (ANSP), the Nigerian Airspace Management Agency (NAMA).

At the centre of this multi-billion-naira storm is a proposed amendment bill before the National Assembly seeking to radically rewrite the distribution of the 5% Ticket Sales Charge (TSC) and Cargo Sales Charge (CSC).

The draft law proposes slashing the NCAA’s dominant share from 56% to 40%, while bumping NAMA’s slice from 22% to an equal 40%.

Predictably, the battle lines have been drawn. In-house unions are trading media brickbats, with the NCAA warning of compromised safety oversight, and NAMA pointmen pointing to an underfunded, technology-intensive airspace buckling under infrastructure strain.

But as the rhetoric escalates, the industry risks losing sight of the bigger picture. To resolve this row objectively, we must strip away the institutional sentimentality, evaluate the cold financial realities of both agencies, and fix the leaking bucket from which both are trying to drink.

For years, the statutory division of the 5% TSC pool collected from air travellers at the point of ticket purchase followed a predictable, albeit unequal hierarchy.

The NCAA, as the apex regulator responsible for absolute safety oversight and economic compliance, retained the lion’s share of 56%.

NAMA receives a modest 22% (often cited practically as 23%), while the remaining crumbs are shared among the Nigerian Meteorological Agency (NiMet), the Nigerian College of Aviation Technology (NCAT), and the Nigerian Safety Investigation Bureau (NSIB).

The reaction was immediate and fierce. The NCAA, speaking through its Director of Public Affairs and Consumer Protection, Michael Achimugu, issued a public warning: hacking away at the regulator’s cost-recovery funds could cripple its capacity to conduct robust safety oversight, train inspectors, and prevent compromises in the skies.

Conversely, NAMA’s in-house unions fired back, with some factions pointing out that the agency is on the brink of operational insolvency under the weight of an obsolete domestic tariff structure and multi-billion-naira legacy debts.

“The staff of the regulatory agency must be better trained and better compensated than the personnel of the service providers they supervise,” an industry insider noted. “If an inspector cannot afford to look an airline billionaire in the eye because his agency is financially starved, safety oversight becomes an illusion,” he stated.

 Furthermore, the NCAA points out that the federal government already executes sweeping deductions from its revenue pool, making any further legislative cuts a dangerous gamble with safety standards.

Why NCAA Fears the Axe

From the NCAA’s vantage point, the proposed 16% revenue cut is not just a statistical adjustment; it is a direct threat to the regulatory wall protecting Nigerian skies.

Not a few believe that the NCAA is fundamentally a cost-recovery regulatory body, not a profit-driven commercial enterprise. It depends almost entirely on its share of the TSC to fund the continuous, highly specialised training of its inspectors, aircraft certifications, and robust airline oversight.

NAMA’s Capital-Intensive Reality

Conversely, look across the tarmac at NAMA, and a different, equally valid crisis emerges. Air navigation has evolved into one of the most technology-driven and capital-intensive domains on earth.

Long before a passenger boards a flight, NAMA’s infrastructure is silently at work, coordinating flight paths, maintaining pilot-to-controller communications, and calibrating instrument landing systems. This infrastructure does not follow an “install-and-forget” model.

Starving NAMA of adequate resources results in radar blind spots, communication dropouts, and flight delays due to procedural spacing. To view NAMA’s demand as a mere resource grab is to ignore the physical infrastructure required to keep aircraft safely separated.

The Elephant In The Room

The fundamental flaw in the National Assembly’s approach is the assumption that rearranging the deck chairs will save a sinking ship. The real crisis confronting Nigerian aviation is not simply how the 5% TSC is shared, but how much of it is actually being collected.

For years, domestic airline operators have treated the 5% TSC, which is paid directly by passengers at the point of ticket purchase, as part of their operational cash flow.

Airlines act merely as collection agents for this statutory levy, yet a massive backlog of unremitted funds, running into tens of billions of Naira, remains trapped in airline accounts.

Both the NCAA and NAMA are essentially fighting over smaller slices of a pie that operators are actively hoarding.

To move past this gridlock, the Ministry of Aviation and Aerospace Development, alongside the National Assembly, must discard political expedience in favour of an objective, structured compromise.

Automated direct remittance

The era of allowing airlines to hold onto collected TSC must end. The federal government should mandate an automated, split-billing system directly at the point of ticket booking.

 When a passenger pays for a flight, the 5% TSC should be routed instantly by the payment gateway to a designated central account managed by the Central Bank of Nigeria (CBN), bypassing airline treasuries.

Instead of arbitrary political bargaining in legislative chambers, an independent aviation consultancy should evaluate the precise baseline budgetary needs of both agencies over the next five years.

Let the data determine the percentage split. If NAMA requires a massive capital injection for an airspace overhaul, the allocation should reflect that reality without permanently crippling the NCAA’s recurrent supervisory capabilities.

Analysts who spoke to Aviation Metric advised that NAMA shouldn’t rely solely on user charges, such as the TSC, to fund generational technology shifts (such as a full transition to satellite-based navigation).

They further stated that the federal government must classify airspace architecture as a critical national security asset and support NAMA through separate capital grants or infrastructure bonds, freeing up the TSC to handle regulatory and standard operational costs.

Aggressive debt recovery

The unions shouldn’t be fighting sister agencies; they should be looking at the debtors. A strict, non-negotiable timeline must be imposed on delinquent airlines to liquidate their unremitted TSC backlogs.

Injecting these recovered billions back into the pool would provide immediate financial liquidity to both the NCAA and NAMA, neutralising the desperate scramble for the current collections.

 

 

The regulatory independence of the NCAA and the structural integrity of NAMA are two sides of the same coin. The Minister of Aviation must broker an arrangement in which funding matches the exact statutory obligations—ensuring that, while NAMA gets the resources to build a world-class skyway, the NCAA retains the financial muscle to police it.

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