Senate rejects special grants for Lagos

 Nigeria Senate.

The debate on a bill seeking special grants from the Federal Government to Lagos State degenerated to a shouting match during the plenary of the Senate on Wednesday.

The bill, if passed into law, will ensure that Lagos is legally entitled to one per cent of the total revenue generated by the Federal Government.

The bill, which was presented in the 7th Senate, was sponsored by the lawmaker representing Lagos Central Senatorial District, Senator Oluremi Tinubu, and it seeks to establish “an Act to make provisions for federal grants to Lagos State in recognition of its (the state) strategic socio-economic significance and other connected purposes.”

Leading the debate when the bill got to the second reading on Wednesday, Tinubu said Lagos, being the commercial nerve centre of Nigeria, served as the commercial capital of country.

She added that the strategic importance of the state was inherent in several sectors of the economy.

The senator added, “Available statistics indicate that six out of 10 international passengers arrive in Lagos while eight out of 10 depart from Lagos. This shows that Lagos is the window through which visitors travel in and out of Nigeria.

“Lagos is home to the major ports that serve Nigeria. It accounts for over 90 per cent of all maritime exports. The state delivers much of the funds and charges that go into the coffers of the Federal Government. It is incontrovertible that Lagos State generates much of Nigeria’s income outside its (the country’s) oil sector.

“According to an FIRS report in 2008, 86.2 per cent of companies income taxes were collected in Lagos alone, while 56.7 per cent of Value Added Tax was collected in Lagos.

“Key sectors of the economy, namely manufacturing, construction, telecommunications, financial institutions and insurance are domiciled in Lagos. Lagos also plays a major role as host to sporting, entertainment and cultural events. It is also the home of hospitality, given the numerous hotels and restaurants located within the state.”

Tinubu said Lagos, when compared with the rest of the country, had the smallest land mass of about 3,671 square kilometres and the highest population density at about 2,649 persons per square kilometres.

She noted that although the 2006 National Population Census placed Lagos as the second most populous state in Nigeria, evidence had shown that the state was also a transient state, which played host to millions of transient citizens of other states in Nigeria, who commuted to Lagos for commercial transactions on a daily basis.

She stated, “It is inadvertent that Lagos State has been left to deal with this pressure on its own at huge costs. The state bears the burden for the wear and tear that many of the federal revenue generating activities cause. Irrespective of its contributions to the economy, Lagos receives statutory allocations like other states, which often translate into meagre sums when compared with other states.”

According to Tinubu, the bill aims to remedy the problems faced by residents and visitors in Lagos by empowering the Federal Government to make provisions for economic assistance through grants, as provided for under Section 164 (1) of the 1999 Constitution (as amended).

Senator Aliyu Wamakko (Sokoto North), however, faulted the timing of the bill, saying Lagos should not ask for additional funding at a time the country was facing an economic  downturn.

He also said the bill, if passed, would inspire other states to ask for special funds.

 Nigeria Senate.

“Other states owe salaries and Lagos, being the richest state, is asking for additional fund.  It will only make other states poorer and Lagos State richer,” he said.

Hope Uzodimma (Imo West) also opposed the bill.

Senator Adeola Olamilekan (Lagos West), however, urged his colleagues not to politicise the bill.

He noted that Lagos had become home to all Nigerians from different parts of the country. According to him, whatever is given to Lagos would benefit people of other ethnic nationalities living in the state.

Fatimah Raji-Rasaki said she would back the bill provided that the special fund would be channelled towards capital projects and infrastructure from which the Federal Government generated revenue.

Senators Abdullahi Adamu (Nasarawa West) and James Manager (Delta South) said even though they supported the bill, its provisions were in conflict with the constitution.

Adamu pointed out that the National Assembly lacked the powers to make laws on how the executive shared the national revenue.

Manager, who described the bill as “very good and very appealing,” specifically cited Section 164(1) of the 1999 Constitution, which states the terms and conditions of how the President could allocate resources.

Senators Phillip Aduda (FCT) and Gershon Bassey (Cross River South), in their separate submissions, argued that whatever special benefits Lagos would enjoy should be extended to the FCT.

They said the federal infrastructure in the nation’s capital also needed attention from the government.

Bassey specifically stated that Calabar should be considered for special grants being the first capital of the country.

The proceedings, however, became rowdy when the Chief Whip, Senator Olusola Adeyeye (Osun Central), who supported the bill, argued that the Federal Government should give Lagos special recognition just as it was doing for the Federal Capital Territory, Abuja.

He queried why the FCT was being subsidised by the Federal Government whereas taxes were being paid for same government services in Lagos.

He also queried why some northern states, which banned alcohol consumption, were benefiting from the revenue from the VAT paid on alcohol consumed in Lagos.

“In Lagos, all of us pay taxes; and all of this VAT is taken to Abuja. What we need to do is to say whatever is sauce for the goose is sauce for the gander. If it’s 13 per cent for Delta, Bayelsa, Rivers for (producing) oil, let it also be 13 per cent for Lagos for the VAT paid there.”

The Chief Whip cited the example of the case of the fiscal federalism in the United States where some roads were categorised as federal even though the state usually paid 20 per cent counterpart fund for the construction.

He added, “Until we have fiscal federalism, Lagos will not work; Calabar will not work; the FCT will not work. By the way, the FCT is a rotten pampered child.”

For describing the FCT as “a rotten pampered child,” temper rose in the chamber, making the Deputy Senate President, Senator Ike Ekweremadu, who presided over the plenary, to ask Adeyeye to withdraw the statement, which he did.

Adeyeye, at the peak of the tension, said, “My point remains that for everyone who lives in a house in Lagos, you pay tax. (In) Abuja, we don’t pay tax and, therefore, the FCT is being subsidised by the Federal Government. That must end! I won’t apologise for that. The FCT is not paying sufficient tax.”

By then, the chamber had become rowdy. Most of the senators were already standing. Some lawmakers were seen pacifying Aduda.

For about five minutes, Ekweremadu was on his feet, hitting the gavel continuously while shouting, “Please, let’s settle down. Distinguished senators, please, let’s continue.”

In a move that put the situation under control, the Deputy Senate President quickly put the bill to vote.

Ekweremadu asked for voice votes three times and the nays had it.

Source: Punchng