The recent rejection by the Senate of a bill to set aside special funding for Lagos was hasty and immature. Instead of a sober, rigorous examination of its merits or otherwise, the upper legislative chamber succumbed to base regionalism and ethnic considerations. Lagos, however, has been short-changed and lawmakers need to see the bigger picture and do the right thing in the national interest.
Advancement of national interest apparently did not feature in the consciousness of senators when they shot down the bill sponsored by Oluremi Tinubu, representing Lagos Central Senatorial zone. The bill “for an Act to Establish a Lagos State Special Economic Assistance Programme” sought one per cent of accruals from the Consolidated Federation Account as aid to cater for the peculiar funding challenges of the former federal capital. Rather than ponder, debate and consider the proposal with dispassionate intellectual rigour as expected of the country’s highest legislative conclave, senators resorted to trivia, petulance and ego-driven drivel. Ironically, a few days later, the same chamber approved the North-East Development Commission Bill, that will reserve three per cent of all accruals from the Value Added Tax for the next 10 years to fund rehabilitation of the conflict-ravaged region. What is sauce for the goose is sauce for the gander.
The need for the rehabilitation of the North-East region is beyond question. For seven years, it has been convulsed by a terrorist insurgency that has crippled its fledgling industry, its substantial agriculture and animal husbandry and created two million internally displaced persons. The six states of the zone, for long among the most economically backward, have suffered further damage as reflected in human development indices of 80 per cent poverty and adult illiteracy of over 60 per cent. The disruption of schooling, health care programmes, especially vaccinations, and economic activities, has led to a resurgence of polio, just a few months to the country being declared polio-free by the World Health Organisation. Already, the Federal Government has been allocating extra funding to the zone in addition to external aid such as the $800 million pledged by the World Bank.
But while the North-East intervention has been rightly attended to with dispassionate analyses, senators displayed no such rationality in discussing the Lagos bill. As Tinubu rightly said, Lagos is Nigeria’s economic hub: it accounts for 80 per cent of maritime trade; receives six out of every 10 visitors to the country; hosts about 60 per cent of its industries and generates most of its non-oil tax receipts. With a population estimated at 21 million in 2016 by the National Population Commission, Lagos has been left to fend for itself since the federal capital was moved to Abuja in 1991, with an unbearable population pressure and additional burden on infrastructure and social services placed by the federal revenue-yielding activities. A Federal Inland Revenue Service report said that in 2008, Lagos accounted for 86.2 per cent of Companies Income Tax and 56.7 per cent of VAT. Over 70 per cent of financial transactions are undertaken in Lagos.
Significantly, the bill seeks “not less than one per cent of the share of the revenue accruing to the Federal Government.” This means that it would not even affect the funding of the other 35 states of the federation as the proposed funding will come from the 52.6 per cent federal share of the Federation Account. The argument by some senators that their own areas also need assistance is ignorant and self-serving. All the states collect VAT and federal allocations from oil and gas without which 34 of them, save Lagos and Rivers, cannot run their various governors’ mansions.
As usual, the northern senators were most vociferous in shooting down the proposal, despite being strong promoters of the North-East bill and the obnoxious Grazing Reserves Bill, and obstructers of the stalled Petroleum Industry Bill. Lawmakers should resist this retrogressive push-back against equity, justice and fairness. Going forward, all progressive lawmakers should back the proposal by Sola Adeyeye that the derivation principle be applied on VAT, a proposal that will help Lagos, by far the largest contributor. The northern senators advertise their selfishness by rejecting proposals that the North-East states should contribute part of their statutory allocations and share of the Ecological Fund to the North-East Development Commission, instead placing the full funding burden on all other states, but cavalierly rejecting any concession to Lagos.
Yet, Lagos is home to all Nigerians as revealed in the pattern of residency, property and business ownership. From the ports alone, estimates of accruing federal revenues range from N2 trillion to N3 trillion, according to the Association of Licensed Customs Agents of Nigeria. When Brazil moved its capital from Rio de Janeiro in 1960, it continued to fund and maintain its infrastructure in Rio, just as Myanmar has not abandoned Rangoon after building a new capital in Naypyidaw in 2005.
Ultimately, however, the solution lies in fiscal federalism. Lagos would not require special funding if Nigeria was operating a true federation where the component units are autonomous economic entities responsible for their own upkeep. The retrograde action by the Senate should reinvigorate the struggle to upturn our current “unitary federalism” that empowers beggarly states and impoverishes everyone else. We cannot run away from this reality forever.
