The Senate has negatived the second reading of the Lagos State Economic Assistance Bill, which came up for second reading at its plenary on Wednesday, 5th October 2016. The Bill which was presented for the first reading in October 2015 seeks the allocation of special grants to Lagos State in recognition of its former status as the former Federal Capital of Nigeria, its mega city status and its strategic socio-economic significance as the commercial nerve centre in Nigeria
Leading the debate on the Bill, Senator Oluremi Tinubu (APC: Lagos) noted that unlike other Nigerian States, Lagos State generated its revenue from various sources and outside the oil sector. According to her, an FIRS report in 2008 claimed that 86.2% of Companies Income Taxes and 56.7% of Value Added Tax (VAT) were collected in Lagos alone. She also attempted to highlight its special status explaining that it had played host to many domestic and international manufacturing, construction, telecommunications and financial institutions and key entertainment, sporting and cultural events.
Sen. Tinubu also drew attention to the objectives of the Bill arguing that its contents were necessary since Lagos state catered to the welfare of a large number of residents and visitors. Consequently, it was only natural that it was financially constrained with attendant implications on its infrastructure by residents and transient visitors alike. For instance, most commuters experienced road traffic daily due to its large human traffic. She was also at a loss as to why it was left to bear the huge financial costs of Federal revenue generating activities in the State. In addition, Sen. Tinubu wondered why Lagos State was allocated a meager statutory allocation despite its numerous contributions to the economy and hoped the Bill would address such discrepancy.
In addition, Sen. Tinubu was of the view that the Bill would remedy the problems faced by the State’s residents and visitors by empowering the Federal Government to make grants as provided for under Section 164(1) of the Constitution of Nigeria 1999(as amended). Under the Bill, the President on the recommendation of the Governor of Lagos State is responsible for endorsing a modest amount not less than 1% of the share of the annual total revenue accruing to Federal Government. She argued that the amount collected would be utilized in meeting the demand for public infrastructure in Lagos State by improving road infrastructure and promoting a conducive socio-economic environment for Federal institutions.
The Bill generated several reactions from Senators, most of whom were opposed to the Bill’s passage to the Committee stage. Other Senators shared the sentiments of the sponsor but supported the Bill with conditions. Sen. Gershom Bassey (PDP:Cross River) and Sen. Philip Aduda (PDP:FCT) also used the opportunity to canvass for allocations for their states. For example, Sen. Philip Aduda called for a special allocation for FCT’s development since its infrastructural facilities had also been overstretched.
Sen. Hope Uzodinmma (PDP:Imo) however cautioned against its passage stating that it would encourage other States to also request for special assistance. Sen. James Manager (PDP:Delta) also called for legislation that would guide the President’s exercise of discretionary powers under section 164 (1) of the constitution (as amended).
Nevertheless, supporters of the Bill like Sen. Olusola Adeyeye (APC:Osun) even canvassed for a higher percentage of the annual revenue accruing to the Federal Government. In his view, the 1% requested would be insufficient. He also recommended that 13% of the revenue collected from VAT should accrue to Lagos State since it was a major contributor of tax.
The Bill however, was negatived following a voice vote against it.
