The Nigerian senate has rejected a Bill seeking for special federal grants to be allocated to Lagos State in recognition of its strategic socio-economic significance to the country.
Titled, “A bill for an act to make provisions for Federal Grants to Lagos state in recognition of its strategic socio-economic significance and other connected purposes”, the bill was read for the second time when lawmakers overwhelmingly voted against it.
Lawmakers, predominantly drawn from the north, South-east and South-south, led the offensive against the bill. The defeat of the bill was believed to have been spurred by Senator Olusola Adeyeye’s position on the issue.
Senator Adeyeye who is the Chief Whip of the Senate, in his intervention, had accused some former northern governors who are now lawmakers of passing laws to stop the sale and consumption of alcohol.
He had also argued that such states should therefore not benefit from Value Added Taxes (VAT) paid by alcohol consumers in states like Lagos. He equally made a case that like oil producing states, Lagos should get 13 per cent from taxes paid into the Federation Account.
“I do not even believe that one per cent is enough for Lagos state. But we have to be fair to Lagos state. We must not kill the chicken that lays the golden eggs. We have a governor here who made a law that alcohol should be banned in the state.
“But the state where such a law was made should not benefit from VAT gotten from sale of alcohol in states where it is banned. States who contribute should get 13 of VAT like oil producing states,” he had argued.
The Chief Whip also argued that the situation is not peculiar to Lagos state noting that.
For about ten minutes, Deputy Senate President Ike Ekweremadu who presided over the plenary tried in futility to calm angry lawmakers. Senator Ekweremadu had to break parliamentary protocol by standing up in order to restore sanity to the rowdy chamber.
Sponsor of the Bill, Senator Olurenmi Tinubu in her earlier lead debate, said “Lagos is a strategic social economic significance as the commercial nerve centre of Nigeria. Today Lagos serves as the commercial capital of Nigeria and its major nerve centre. The strategic importance of Lagos state is inherent in several sectors of the economy.
“Available statistics indicates that 6 out of 10 international passengers arrive in Lagos why 8 out of 10 depart from Lagos. This shows that Lagos is the window through which visitors traveling in and out of Nigeria leave the country.”
Making a strong case on why Lagos should be given a special status, she said “According to an FIRS report in 2008, 86.2 percent companies’ income taxes were collected in Lagos alone while 56.7 percent 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.”
Voice of Nigeria’s Correspondent explained that “the bill allows the grants payable to be determined by the President and Commander in Chief of Nigeria’s Armed Forces, on the recommendation of the Governor of Lagos state, with the proviso that recommends the modest amount not less than 1% of the share of the revenue accruing to the federal government. The amount is payable upon appropriation by the National Assembly.
“These grants will be utilised in meeting the public infrastructural need of Lagos state. For example improving on rail infrastructure to decongest the roads and for promotion of the conducive social economic environment for federal institutions as well as increased the State’s capacity to continue to play host.
“The bill also establishes a joint committee host members to be appointed by the President and the Governor of Lagos state. The committee will present an annual report to the president for information outlined in the bill”.
Meanwhile, the Senate on Wednesday passed for second reading, a bill for an act for the prohibition and protection of persons from lynching, mob action and extra-judicial executions and other related offences. The bill is sponsored by Dino Melaye from Kogi state.
After a brief debate, the bill was referred to the committee on Judiciary, Human Rights and Legal Matters for further consideration. The committee is expected to report back within four weeks.